What Is Shotgunning and Its Effect On Credit Score

Shotgunning is the name that has been given to the practice of quickly applying for credit with multiple lenders in a short amount of time for the same credit incident. This usually happens when a person is looking for a loan for an automobile or mortgage. The mortgage broker of the automobile dealer may send the application of the consumer for a loan to various lenders in order to get the best deal. This results in the various different lenders making enquiries into the credit report of the consumer resulting in multiple enquiries.

Most of the credit scoring models are now quoted recognize the practice of shotgunning and consider multiple enquiries made for the same credit incident as one single enquiry of the purpose of calculating the credit score. The timeframe in which the credit scoring models will consider multiple enquiries as one single enquiry differs from one model to another although the average is about 14 days.

Before going to make a large purchase such as a home or an automobile the consumer has advised to get his own copy of the credit report from the credit bureau in order to know where he stands in the lender’s perspective and to work on any areas that might need improvement. The consumer is also advised to get a copy of the credit score at least once in order to get a better understanding of the various factors that affect the credit report both positively and negatively.