Most Recent Credit Application

It is ironic, but applying for credit can and in many cases does have a negative impact on your credit score.

The credit score formula takes into consideration the following factors:
The number of accounts you applied for
The number of accounts you actually opened
The amount of time that passed since you applied for an account
The amount of time that passed since you opened an account

Even with a relatively small 10% influence on the overall credit score, this category troubles more people than any other. This is probably due to the fact that you can see the score drop just a little every time you apply for credit, even when everything else remains the same.

The good news is that for important loans like Auto Loans and Mortgages, the credit score formula takes into account that you should have the right to find the best interest rate and loan package. For this reason, if you apply for an Auto Loan or a Mortgage at multiple places in a relatively short period of time (3 weeks), it should not have a big negative impact on your overall credit score. For more information about this please read Shopping For Best Rate