Too many enquiries on your credit score can have a significant impact on your ability to get a loan and secure competitive pricing. When customers are shopping around for loans, they may not realise that applying for multiple loans can have a negative impact on their credit score. Each time you apply for a loan, credit card, personal loan, car loan or Buy Now Pay Later this is considered an “enquiry”.  Even if you don’t proceed with the loan. Often we see applicants who have shopped around for the best car loan or frequently changed credit card to chase reward points, with heavily impacted credit scores as a result.  It’s important to make sure when shopping around that no formal application is submitted with your lender until you decide.  That only a “soft touch” on your credit file occurs - which means they can look at your credit score without doing a “hit”. While collecting bank promotions for reward points sounds good in theory you need to consider the impact this is having on your credit score.  This can restrict the number of lenders who may lend to you and can increase the interest rate on lending, especially in the car and personal loan space.

Banks rely heavily on your credit score when assessing finance. They look at the number of enquiries in a five year period, repayment history over a 2 year period and overall score. Each and every time you do a loan application and make a repayment on an existing facility, it impacts your credit score either positively or negatively.