How Does A Credit Inquiry Affect My Score?

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Having several inquiries can reduce your overall credit score and affect your RV or boat loan approval. Lenders use your credit report to conduct a risk assessment. Inquiries can affect their decision to offer a loan to you. Too many hard inquiries in a short period of time can be concerning to lenders. That's because multiple hard inquiries may add up to numerous new accounts. This may make the lenders feel you are taking on too much debt or having financial difficulties. A credit inquiry would typically remain on your report for 24 months and can cause fluctuations in your credit score.

The Differences Between a Hard Inquiry and Soft Inquiry

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A hard inquiry is when a lender reviews your overall credit report and makes the decision whether to proceed with the loan. This type of credit inquiry will influence your overall credit score as it will be recorded on your credit report.

A soft inquiry is when a lender checks your credit to pre-approve you before you apply. This kind of inquiry does not affect your credit score.

Most dealers and credit companies will “shotgun” your application to many sources, dramatically increasing the number of hard inquiries on your credit. However, My Financing USA always pre-qualifies customers with a soft pull and will only send your application to a lender for a hard inquiry if we have pre-qualified you.

Examples of a soft inquiry:

  • RV loan pre-qualify check
  • Boat loan pre-qualify check
  • Employment background check
  • Pre-approved credit card offers
  • Pre-approved investment loans

Examples of a hard inquiry:

  • Application for RV financing to lenders
  • Application for boat financing to lenders
  • Application for personal loans
  • Application for credit card loans

What Do Credit Loan Companies Look For?

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Loan companies and/or lenders complete credit inquiries before approving or denying loans. If you are looking for financing plans to purchase an RV or a boat, you might want to take a look at the list of guidelines that credit companies look for before they decide to approve a loan for a client.

Opening several credit accounts – Opening multiple credit accounts in a short period of time can be concerning to lenders. Lenders may feel you are taking on too much debt or having financial difficulties. This can decrease your chances of approval for new loans.

Large balances on credit cards – Carrying large outstanding balances on credit cards often makes lenders believe that the individual is not living within their means. Try to keep credit card balances as low as possible, preferably below 30% of maximum limit.

Paying your bills on time – How efficient you pay your bills and installments are important factors that credit companies look for on your credit report. If there is any kind of delays or outstanding debts, it is highly unlikely that lenders would approve new credit loans for you until all unpaid bills are fulfilled.

Income and expenses – Lenders consider clients with a Debt to Income ratio below 40% to be lower risk than those with a higher debt to income ratio. Debt to Income Ratio is the percentage of your debt payments in comparison to your income.

Down payment – Although most lenders require a down payment ranging from 10%-20% of the purchase price. My Financing USA will work to get the lowest down payment possible based on your specific information.

When you are applying for an RV or boat loan, it is always a good idea to review your financials and ensure you are able to take on the new debt and the costs associated with owning a boat or owning an RV. My Financing USA is willing to help you secure the best financing for your RV and/or boat loans.

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