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Chapter 11. CREDIT REPORTS > Credit Inquiries

Credit Inquiries

If you decide that you need another credit card (Americans today have an average of 3.2 cards per person), you should think twice before filling out a bunch of applications for new credit cards. When you apply for a credit card, the credit card company looks at your credit report. This is called a “hard inquiry,” and it can adversely affect your credit score if you have a lot of hard inquiries. It affects your credit score because it indicates you are considering taking on a large amount of additional credit that could affect your ability to meet your financial obligations if you ran up your credit limits.

Just as Johnny Lee warned us in the song “Lookin' for Love in All the Wrong Places” in the movie Urban Cowboy, so can you hurt your credit score by looking for credit in too many places. Applying for a lot of credit and incurring “hard inquiries” can reduce your credit score.


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