Your credit score: when multiple applications count as 1

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While it may seem like your credit is working with multiple lenders, credit expert Doc Compton says it’s normal practice and nothing to panic about.

INDIANAPOLIS – Your credit score is your report card for borrowing money. That’s why it’s important to keep an eye on it.

So when a viewer saw results on her credit report that she hadn’t expected, she reached out to find out what was going on.

Vehicle purchases

Nancy Branham wants a bigger vehicle.

“I have two dogs now, and I need to be able to take myself and our life in the car if I have to move somewhere,” Branham said.

With his thirty-five-pound Shar-Pei mixes in mind, Branham contacted a car dealership to explore financing options — knowing full well that his credit is on the right track.

A good credit rating is important because it’s basically your word on paper,” Branham said.

But what she didn’t know was that the dealership would be managing its credit with multiple lenders, which means multiple tough inquiries — or the inquiries that matter.

“I thought my credit was gone now. It’s going to drop so much,” Branham said.

How multiple requests work

Credit expert Doc Compton said it was normal practice and nothing to panic about.

The hard requests that Branham saw on his credit reports will only count as one result, as it is the same loan.

“Most dealerships will submit your credit application to multiple banks in an effort to find the best rate and terms possible,” Compton said.

Compton said one-time applications also apply to mortgages, refinance and student loans, and the application window is typically 14 to 65 days.

“You go to a car dealership on Saturday, you submit a credit application, and they submit it to five banks. Well, if you go to another dealership on Monday, they also submit it to five banks. Those 10 applications count .like an investigation,” Compton said.

Keep in mind that one-time inquiries do not apply to credit cards or personal loans. Each credit card or loan application will count as an individual success.

While Branham has suspended her research, she has peace of mind that her credit is still intact.

“It’s a lot of hard work that I don’t have to worry about disappearing,” Branham said.

To anticipate

Compton said consumers can also tell dealers which bureau’s score is higher.

This benefits the dealer because he wants the sale.

“You might want to only shoot from Experian, or only Equifax, because that’s usually the one I score the highest,” Compton said by way of example.

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