There are two major credit bureau companies that all financial institutions and merchants use today.  They are Equifax and TransUnion – agencies that rank and provide an overall score to each person who uses credit.  The system for measuring hits to your credit score is indeed intuitive, meaning it measures and evaluates the type of merchant and credit inquiry.  So, it knows if you are shopping around.  If you have several inquiries from different lenders because you are rate shopping for a mortgage you will usually not see any decline in your score, (however, these inquiries must be contained within a 30-day period).  Same thing when you are shopping for a vehicle, multiple hits to your credit bureau from car dealers will not alter the score if contained within 30 days.  But, on the other hand, if you are truly shopping and going to different stores, applying for multiple credit cards, personal and retail loans, or buying items on deferred payment plans, then YES, this will drop your score regardless of the 30-day limit.

Christine’s Tip:

There is a third consumer reporting company in the USA – Experian.  All credit reporting companies use a FICO score (FICO stands for Fair Isaac Corporation – the American company that created credit scores).  Credit scores can range from 300 to 900 and of course the higher the score, the better.  Most lenders will want a score of 680 or higher to approve a credit application for a major purchase or mortgage.  Always protect your credit score by not having too many inquiries, credit applications or delinquent credit.  You also want to make sure you repay your credit on time and avoid carrying balances month-over-month.