After your Phoenix bankruptcy, one of the things that is always on the back of your mind is repairing and rebuilding your credit. Whether you are obsessively using and paying off a credit card or proudly paying off your bills each month, seemingly every move you make after bankruptcy could affect that little number you are working so diligently to resuscitate.
One thing to be aware of, however, is to allow your credit time to repair itself organically over time before you rely too heavily on its powers. When you make credit inquiries on your credit report a few times per year for your own purposes, such as checking your credit score, it will not negatively affect you. When business run inquiries based on a request you make to apply for more credit—such as a loan—your score could take about a 10 point hit for each inquiry that is made.
While a 10 point hit here and there may not seem like much, if you are shopping around for the best offers on credit cards and home or auto loans, you may be chipping away at your score over time. These inquiries based on a request for more credit are called “hard inquiries,” and will stay with you for up to two years.
There are also certain credit inquiries that will not be held against you, called “soft inquiries.” Inquiries like these come from employers or banks offering you credit. A soft inquiry will also appear on your credit report when you request your credit scores from one of the three approved credit bureaus: Experian, Equifax or TransUnion. The good news about a soft inquiry is that while it does appear on your report, it will not affect your credit score.
Fortunately, there are ways to minimize the effects of hard inquiries on your credit score. If you are emerging from or considering filing for bankruptcy and have questions about how to protect your credit score from multiple hard inquiries, call Curry, Pearson & Wooten’s Phoenix bankruptcy attorneys at 602-258-1000 to discuss your questions with an experienced bankruptcy professional today.