Tracy Press

Applying for credit can be tough, but knowing your credit score and what affects it can give you a leg up.

When you apply for new credit or those quick retail applications solicited by store salespeople, you could be lowering your credit score. Your credit score, also called a fico score, makes up a substantial portion of your credit report.

Credit bureaus provide this information to lenders so that they can determine credit risk and assess whether or not they’ll lend money to a potential borrower. New credit, including inquiries, amounts to only 10 percent of your total credit score, but it can still make an impact.

Some inquiries can affect your credit score from a few points up to 50 points. If someone has derogatory or minimal credit, the effect will be stronger. Sometimes five to 10 points make all the difference in purchasing a home or refinancing an existing home (for a lower interest rate, cash-out, or to consolidate or pay-off bills). The interest rate obtained can be affected by the credit score as well as the ability to get the financing completed.

Inquiries or new credit can include a number of recent credit inquiries (eg. multiple stores or businesses checking your credit) a number of recently opened accounts, the type of account with the inquiry (eg. auto, clothing store) and time since the credit inquiries (eg. recent months versus a year ago).

Exceptions to the inquiry rule are made for home mortgage loan and auto loan shoppers. Multiple mortgage inquiries in any 14-day period are counted as just one inquiry. It is expected that when shopping for a home mortgage loan, a borrower may check multiple sources to get the best financing.

Additionally, mortgage and auto inquiries made in the 30 days prior to credit bureau scoring are typically ignored. If you find a loan within 30 days, the inquiries shouldn’t negatively affect your credit score.

Your credit score is also weighted by 35 percent payment history (timeliness), 30 percent amounts owed, 15 percent length of credit history, 10 percent types of credit and 10 percent new credit, such as the inquiries described in this article. To improve credit, balances should be 30 percent or less of the credit limit for a specific account.

• At Home is an occasional column by Carla Carroll, who is a local mortgage consultant. To talk more about real estate financing, contact her at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

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