It’s a common knowledge that when one applies for a credit, whether it be a credit card, car note, student loan, mortgage, etc., the first thing a lender will do is to perform a risk review on the credit applicant to see how risky or credit worthy this person is. The lender will pull a hard inquiry on one or a few of the credit bureaus (TransUnion, Experian, Equifax) to look at the credit behavior of the applicant. Based on the credit score and history from the credit bureaus, the lender will then decide whether or not to approve or decline the credit request and at what interest rate. Obviously the higher the credit score you have, the more favorable you’ll be in front of the lender.
In the points and miles world, obtaining new credit cards is the KEY to unlock many possibilities. However, each time a new application is submitted, the bank/lender will perform a hard inquiry which will impact the credit score of the respective credit bureau. A credit score is comprised of many variables and they are weighted differently (i.e. credit utilization – high impact, payment history – high impact, age of credit history – medium impact, etc). For the number of credit inquiries, the impact to the overall credit score is minimal. Here is a breakdown on how the # of credit inquiries impact the calculation in this bucket: 0: excellent; 1-2: good; 3-4: fair; 5-8: poor; 9+: very poor.
As mentioned earlier, the bank will perform a hard pull on one of the three credit bureaus (or 2) when you apply for a credit card. For people who do app-o-rama and apply for multiple cards in a short amount of time, it may be wise to know which bank uses what credit bureau in order to spread out the credit inquiries so you won’t be top heavy. The nerd in me decided to analyze the data based on my own info. Since I didn’t keep track of how the credit inquiries showed up on the different credit bureaus, my data is not 100% complete. But it’s still worth to note some highlights:
Bank Product Apply Date Experian TransUnion Equifax Citi Executive Master 8/2014 Y Citi AAdvantage Platinum Select 4/2014 Y Barclay Arrival Plus 1/2014 Y Barclay US Airways Premier 2/2015 Y Y Chase Sapphire Preferred 5/2014 Y Y Chase United Mileage Plus 8/2014 Y Charles Schwab Savings 12/2014 Y
I wasn’t able to see which credit bureau Amex Platinum (1/2015) and Chase Hyatt (11/2014) used as they both were dropped from my credit history as of now. This is also the interesting part – the credit inquiries from Citi, Chase and Amex are gone from my credit report fairly quickly (only stayed on for a few months). However, Barclay stays on forever (it will eventually be dropped after 2 years). What baffled me was the inquiry from Charles Schwab!!!! This was for opening a savings account and no credits were involved. What is the dealio!
One thing that I read is banks may pull inquiries from different bureaus depending on the state you are applying from. Hence, it’s not 100% guarantee that Citi will only look at Experian.
Just some food for thought for nerds like me. 🙂