The Credit Scoring Site A bleak account 

How credit checks (inquiries) affect a credit score - A FICO score factor

Users of credit reports' credit checks (inquiries) to your credit file are a factor in your FICO score.

"People with six inquiries or more on their credit reports can be up to eight times more likely to declare bankruptcy than people with no inquiries on their reports." - Fair Isaac

Mortgage and Auto Inquiries

"In addition, the score ignores all mortgage and auto inquiries made in the 30 days prior to scoring." - Fair Isaac

"FICO scores have been carefully designed to count only those inquiries that truly impact credit risk--see page 15 for details." - Fair Isaac

"However, the information that evaluators need to make this distinction—that is, a code that identifies the type of credit sought from the inquiring lender—is generally not available in inquiry records (it is missing from 99 percent of the inquiries in the Federal Reserve sample)." - The Federal Reserve Board

"In the newest formula used to calculate FICO scores, that 14-day period has been expanded to any 45-day period, [Fair Isaac's] Watts said. This means consumers can shop around for an auto loan for up to 45 days without affecting their scores." - The Washington Post (5/5/05)

"The FICO® score ignores all auto- or mortgage-related inquiries that occur within the 30-day period previous to an inquiry from an auto or mortgage lender (called the buffer period)." - Equifax

"How predictive are consumer credit hot-buttons such as finance company trade references and inquiries?" - Hollis Fishelson-Holstine, Fair Isaac

14 days, 30 days, 1 year

And that's a red flag that can cut your credit score by as much as 10%, said Craig Watts, a spokesman for Fair, Isaac & Co., the San Rafael, Calif., firm that created the most commonly used credit-scoring program.


"We further refined the way we handle inquiries in 1998 and in the later redevelopment of the NextGen FICO score." - Fair Isaac

Equifax inquiry Type of Business non-disclosure

Just another day at the office of secrets in Atlanta

Here's part of the Equifax Credit File disclosure that comes in the mail. That credit report costs $10. Equifax likes to say that it is the report where they completely comply with the law regarding disclosure to the consumer; they like to call it the "regulated" disclosure.

It ain't regulated enough. You won't get the type of business making an inquiry into your file with this report.

Equifax mailed disclosure inquiries
(click image for larger view)

But, pay Equifax $29.95 and they play ball. Here's the Equifax online $29.95 3-in-1 Credit Report:

Equifax 3-in-1 inquiries

The significance is that different types of inquiries affect your score in different ways. The formula goes easy on auto- and mortgage-related inquiries so people can, supposedly, shop with less angst about lowering their score. The E-LOAN inquiry was auto-related, but not coded so.

More importantly, this illustrates that Equifax does not provide all information in the consumer's file. In the first example above (the most fundamental of all disclosures) there is no notation of the type of business making the inquiry.

Key factor in credit score information. Any consumer reporting agency that furnishes a consumer report that contains any credit score or any other risk score or predictor on any consumer shall include in the report a clear and conspicuous statement that a key factor (as defined in section 609(f)(2)(B)) that adversely affected such score or predictor was the number of enquiries, if such a predictor was in fact a key factor that adversely affected such score. - The Fair Credit Reporting Act

But, if the inquiry is coded wrong, and you don't know it, you lose.

So, what if you buy their report that has a score with it? The Type of Business notation is still missing:

Score Power inquiry

What else are they doing with that information? Selling it. "Mortgage triggers" are all the rage. Here's the Equifax TargetPoint sales pitch:

"With precision, [sic] and timeliness, Equifax can deliver targeted prospects from your portfolio or target marketing list, based on the following event-based triggers:...

  • Bankcard inquiries less than or equal to 30 days...
  • Auto inquiries less than or equal to 30 days...
  • Mortgage inquiries less than or equal to 30 days...

Yes, that's right. Equifax can't even get something as fundamental as full disclosure right, but they're out grinning ear-to-ear selling your information to cheap salesmen. And what about that E-Loan inquiry not coded as Auto? E-Loan appears to have escaped the trigger effect-- its auto loan competitors contacting the consumer-- at the expense of the consumer's FICO score.

Equifax, your reply will be published here.

Our congress calls them "enquiries" and "inquiries."

See the Equifax legacy.

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