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Your credit score: When multiple inquiries count as 1

While it may seem like your credit is running with multiple lenders, Credit expert Doc Compton said this is normal practice and not to panic.

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 hits on her credit report that she wasn't expecting, she reached out to find out what was happening.

Vehicle shopping

Nancy Branham wants a bigger vehicle.

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

With her thirty-five-pound shar-pei mixes in mind, Branham hit a car dealer to explore financing options — knowing good and well her credit is on track.

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

But what she didn't realize is that the dealer would be running her credit with multiple lenders, which means multiple hard inquiries — or the inquiries that count.

"I thought my credit is shot now. It’s going to go down so much," Branham said.

How multiple inquires work

Credit expert Doc Compton said this is normal practice and not to panic. 

The hard inquiries Branham saw listed on her credit reports will only count as one hit because it's for the same loan.

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

Compton said one-hit inquiries also apply to mortgages, refinancing and student loans, and that the application window is usually 14-65 days long.

"You go to a car dealership Saturday, you submit a credit application, and they submit it to five banks. Well then, if you go to a different dealership on Monday, they also submit it to five banks. All 10 of those inquiries count as one inquiry," Compton said.

Keep in mind that one-hit inquires do not apply to credit cards or retail loans. Each credit card application or loan will count as an individual hit.

While Branham put her search on hold, she has the peace of mind her credit is still intact. 

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

Thinking ahead

Compton said consumers can also tell dealers which bureau score is the highest. 

This benefits the dealership because they want the sale.

"You might want to only pull from Experian, or only pull from Equifax, because that one typically is the one that I have the higher score with," Compton said as an example.

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