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I know that going out and applying for a new credit card can effect my credit score in a negative way. I have a LOC with a bank. I think I can get a better interest rate from another bank and if so I would transfer the balance to that bank. To do that they will probably need to do a credit check. Does anyone know if this type of credit inquiry would be harmful to my credit score? I would like to check with several banks to make sure I am getting the best possible rate, however I dont want several credit inquiries on my credit score.
 

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If you apply to several banks, they will each do a hard hit on your report.
It will impact your score slightly, but not a big deal.
This is a common occurance and indicates that the person is shopping around.
If everything else is ok in general, you have nothing to worry about.

An alternative is to work through a broker.
Usually, the broker's firm will do one credit check and then use that to shop around and get you the best rate.
I had done this when shopping for a mortgage.
Only one hit showed up on the credit report.

Should be the same for LOC
 

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I've always been a little skeptical of brokers, financial advisors etc. because im sure they dont work for free.

What type of fees would be associated with taking my LOC to a broker? Would they charge based on the amount? would it be a one time payment or would they take a commision of some sort from each payment?
 

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I've always been a little skeptical of brokers, financial advisors etc. because im sure they dont work for free.

What type of fees would be associated with taking my LOC to a broker? Would they charge based on the amount? would it be a one time payment or would they take a commision of some sort from each payment?
No, I meant using a broker to search for a LOC (or mortgage).
The account will be with a financial institution, such as a bank or credit union or any other lending institution - not the broker.
The broker's role ends once the deal is done and you've signed the paperwork.
It's like a real estate agent.
In this case, the broker gets his/her commission from the bank.

Yes, nothing is free, the broker's commission is based on what rate they sell you on.
But there is benefit for you because usually without the broker you cannot "see" those rates.
If you walked into a bank branch, it would be almost impossible to get those rates, esp. if you have no long-term relationship with that institution.
 

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. Does anyone know if this type of credit inquiry would be harmful to my credit score? I would like to check with several banks to make sure I am getting the best possible rate, however I dont want several credit inquiries on my credit score.
Yes, every hit may be 10-20 points gone. They do come back within a few months. This is assuming you make your payments on time and don't have a lot of maxed-out debt.

There is an easier way to get the best possible rate: phone and shop around, asking for the best rate. I assume you are also talking about a regular line of credit. Otherwise, if it's a home equity line of credit, you will have to pay legal and set up fees.
 
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