Unreasonable enquiry listings on credit files, especially for unsecured debt like credit cards, personal loans and buy now, pay later providers are scored poorly by banks and can make you unattractive to mainstream mortgage lenders.

What is an enquiry listing? An enquiry listing is put on your credit file each time you apply for finance. The enquiry listing could be placed by a big bank, credit union, car finance company, credit card company, telecommunications company – the list is endless.

Why do these companies put enquiry listings on your credit file? They do it because when you apply for a loan online or in person, you are asked to tick a box or sign that your credit file can be accessed.

The reason they want to access your file is to see if you are going to be a good loan prospect. And every time you sign or check that box an enquiry listing will appear on your credit file.

It's no wonder consumers are dazed and confused about this being a problem because we are encouraged to ‘shop around’ for virtually everything. Want a fridge?

Well, you better check out your competitors and beat the lowest one down in price – this is the kind of mentality in a competitive marketplace. And we do the same with finance.

The online world we inhabit gives us, at our fingertips, access to real live competitive interest rate information as well as numerous benefits for jumping ship from your current lender to a new one.

One or two credit enquiries per year on your file is deemed reasonable and won’t affect your score too much but when it looks like you are shopping around for loans with multiple lenders over a short time period, this is when your score will take a big hit.

So, if you are seeking finance and are tempted to submit applications with multiple lenders at the same time to see who will give you the best deal, you should resist the urge as red flags will be raised.

It’s better to make one application through a mortgage manager like loansHub, your application will be directed to the best lender for you from the get go without a hard credit check and you will avoid multiple lenders placing inquiries on your credit file.

If it’s an issue with your credit file there are companies that can assist with the removal defaults, court actions and other adverse information.

Credit repair companies can also remove fraudulent or duplicate enquiry listings. But can't help with multiple enquiry listings because in almost every case the consumer has signed or ticked the box that gave the lender permission to access the credit file and place the enquiry listing on there.

Remember, prevention is better than cure.

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This article via Mortgage Business does not constitute advice; readers should seek independent and personalised counsel from a trusted adviser that specialises in property, a tax accountant and property design specialist.