How do inquiries impact my credit score?

Q: After a long illness that lasted four years I got in debt with medical bills and one other credit card; my credit score went down to about 550. Now after about a year, I am working on getting rid of much of the dept and have been pretty successful. My score is now back up to about 650, however, the three credit reporting companies list that "inquiries impacted the credit score." Can you please tell me what that means and what, if anything, I can do about it?

I have been trying to search around and get a better interest rate on the one card that is charging 21 percent interest and doing some other shopping around with the smaller cards -- getting one and then paying it off right away. How do inquiries impact my credit score? Also, what is the best way to find someone I can talk to about my credit reports and get some help me with working through them? I am having trouble finding someone I feel I can trust.

A: The fact that you keep applying, or trying to find, a new credit card means those issuers are inquiring about your credit, and all those inquiries are a negative on your credit score. Trying to make things better, you're making it worse! Just concentrate on paying down that 21 percent card -- and all others. Don't apply, or "look" for more credit until those are paid off, and you've requested that the accounts be CLOSED, except for one card that you'll lose and pay in full every month. That's the way back to good credit.

Terry Savage is a registered investment advisor and the author of the newly published The Savage Number: How Much Money Do You Need To Retire? (256 pages, Wiley, $24.95).