Out of the 88 negative rating factors that can lower your credit score one in particular that I would like to cover are inquiries.

In the credit scoring system inquiries are given two types of classifications one being 'soft inquiries' and the other 'hard inquiries'. Let's cover these two in detail:

*Soft Inquiries

These inquiries do not affect your credit score so don't be alarmed if you see a lot of these on your credit file.

There are three main types of credit checks that fall into this classification.

1)Personal - When you order your own credit reports or scores directly from the major consumer credit agencies or myFICO.

2)Promotional - Businesses that check your credit for promotional purposes use the data in order to solicit its products or services such as those pre approved credit card offers you find in your mailbox.

3)Procedural - As part of its procedure a company or lender that you currently have an established account with may periodically check your credit in order to either extend additional credit or look for signs of financial distress.

*Hard Inquiries

A hard inquiry is what negatively impacts your score and according to myFICO.com one additional hard inquiry for some people may take up to but not more than 5 points off a credit score!

This credit check happens when a creditor pulls your report as a result of you applying for credit.

One key thing to remember is when you apply for credit with multiple lenders in order to search for the best rate on a mortgage, auto or student loan FICO will consider all these inquiries within a 30 day period to count as a single inquiry.

Unfortunately there's no way to determine what affect a hard inquiry will have on your score because it varies from consumer to consumer and is based on different credit histories.

Even though hard inquiries can stay on your credit reports for two years FICO's scoring model only factors in those inquiries from the last 12 months.

So you will want to be selective where you apply for credit because too many recent hard inquires can signal a red flag with creditors.

If you identify any unauthorized hard inquiries on your credit file then you will need to prepare an inquiry dispute letter and submit it to both the consumer credit agency and creditor.

This is different than disputing information like a late payment or collection account.

Currently none of the consumer credit agencies offer an online dispute option for credit report inquiries so you will have to submit your dispute via the mail.

I suggest you send the letter via Certified Mail Return Receipt Requested so you can properly track the dispute submission and response time.

Remember the Fair Credit Reporting Act was put in place to protect you from unfair credit reporting and this includes the use of unauthorized hard inquiries.