Account Inquiry

What Is an Account Inquiry?

An account inquiry is a review of any type of financial account, whether it be a depository account or credit account. The inquiry can refer to past records, payments, and other specific transactions, or to any other entries relating to the account.

Understanding an Account Inquiry

Most financial institutions have a formal department that deals with account inquiries.

An account inquiry could be done per the request of a bank, lender, or other financial institution that requires a copy of an account history when an individual, business, or other entity applies for credit or a loan. The term is often used to mean a credit inquiry: that is, when there is a request to or from a credit agency about a particular consumer. Credit agencies may issue account inquiries to credit card companies or other lenders as part of assessing whether individuals are current on the bills they are responsible for.

The Purpose of an Account Inquiry

An account inquiry is typically initiated when an individual seeks to take on new debt, particularly in conjunction with making a substantial purchase such as the acquisition of real estate. Before the applicant is approved for the new debt, the lender wants to see their track record when it comes to paying their debts in an orderly fashion. This step is key in assessing the overall creditworthiness of a potential borrower, as well as structuring the rates they may be offered for the loan.

An account holder may initiate an account inquiry on his or her own behalf, particularly if questionable activity is suspected — such as debits that the account holder does not recall authorizing or charges that look unfamiliar. By requesting that the bank or creditor launch an investigation into such transactions, the inquiry could be a start in identifying security breaches or instances of fraud.

Account inquiries might also be made to ensure that payments have cleared or at least delivered on time.

Special Considerations for an Account Inquiry

Excessive account inquiries by third parties, particularly for credit cards, may have an adverse effect on a consumer's credit rating. If an individual applies for multiple credit cards in a short period of time, each application will usually trigger a separate account inquiry into the payment history. When those inquiries are reported to credit agencies, it may be regarded as cause to lower the consumer’s credit score, at least temporarily — because the behavior could be interpreted as an individual in need of money, or on the verge of a spending spree that will rack up a lot of debt.

Credit agencies cut mortgage-seekers some slack: They don’t let multiple lenders' inquiries ding credit scores, provided that the queries occur within a 45-day period.

There's an exception for mortgage-related inquiries, however. Credit agencies understand that people usually shop around for the best deal, visiting several lenders, and that all the various inquiries are for the same single loan (unless by some odd chance a family is planning to buy three different $500,000 homes). So they don't count a rash of inquiries against you, especially if they're all within a couple of months.