Does applying for credit affect my FICO score?

Fair Isaac's research shows that opening several credit accounts in a short period of time represents greater credit risk. When the information on your credit report indicates that you have been applying for multiple new credit lines in a short period of time (as opposed to rate shopping for a single loan, which is handled differently as discussed below), your FICO score can be lower as a result.

What is an "inquiry"

When you apply for credit, you authorize those lenders to ask or "inquire" for a copy of your credit report from a credit bureau. When you later check your credit report, you may notice that their credit inquiries are listed. You may also see listed there inquiries by businesses that you don't know. But the only inquiries that count toward your FICO score are the ones that result from your applications for new credit.

 

What's in your credit report? Cont.

Public Record and Collection Items.Credit reporting agencies also collect public record information from state and county courts, and information on overdue debt from collection agencies. Public record information includes bankruptcies, foreclosures, suits, wage attachments, liens and judgments.

What's in your credit report? Cont.

Credit Inquiries.
When you apply for a loan, you authorize your lender to ask for a copy of your credit report. This is how inquiries appear on your credit report. The inquiries section contains a list of everyone who accessed your credit report within the last two years. The report you see lists both "voluntary" inquiries, spurred by your own requests for credit, and "involuntary" inquires, such as when lenders order your report so as to make you a pre-approved credit offer in the mail.

What's in your credit report? Cont.

Trade Lines.
These are your credit accounts. Lenders report on each account you have established with them. They report the type of account (bankcard, auto loan, mortgage, etc), the date you opened the account, your credit limit or loan amount, the account balance and your payment history.

What's in your credit report?

Identifying Information.
Your name, address, Social Security number, date of birth and employment information are used to identify you. These factors are not used in credit scoring. Updates to this information come from information you supply to lenders.

Inquiries

If you apply for several credit cards within a short period of time, multiple requests for your credit report information (called “inquiries”) will appear on your report. Looking for new credit can equate with higher risk, but most credit scores are not affected by multiple inquiries from auto or mortgage lenders within a short period of time. Typically, these are treated as a single inquiry and will have little impact on the credit score.

CREDIT CARDS!!!!

Have credit cards – but manage them responsibly. In general, having credit cards and installment loans (and paying timely payments) will rebuild your credit score. Someone with no credit cards, for example, tends to be higher risk than someone who has managed credit cards responsibly. Call us for more information at 1-866-997-6591.

DID YOU KNOW?

Lenders use a number of facts to make credit decisions, including your FICO® score. Lenders look at information such as the amount of debt you can reasonably handle given your income, your employment history, and your credit history. Based on their perception of this information, as well as their specific underwriting policies, lenders may extend credit to you although your score is low, or decline your request for credit although your score is high. Contact for a free consultation at 1-866-997-6591.

 

Snapshot

A score is a “snapshot” of your risk at a particular point in time. It changes as new information is added to your bank and credit bureau files. Scores change gradually as you change the way you handle credit. For example, past credit problems impact your score less as time passes. Lenders request a current score when you submit a credit application, so they have the most recent information available. Therefore by taking the time to improve your score, you can qualify for more favorable interest rates. Don't waste time, look into credit repair today! Call us toll free 1/866-997-6591.

Holiday Spending Reminder!

Problem #1- charging more than you can pay off.
It's common to go a little overboard during the holidays – those iPhones that everybody wants this year aren't cheap! It's easy to rationalize that this is the "giving time" of year and it's okay to charge a little more than usual. This is only true if you're not "giving" so much that you're unable to pay off your credit cards. Receiving credit card bills that you can't pay off can leave you stuck with paying interest on the balances. This is not only money wasted on interest, it's also probably hurting your FICO score – particularly if you don't typically carry balances on your credit cards. This year, try to budget so that you only charge what you feel comfortable that you can pay off the following month.

 

Know AND understand what is on your credit report!

Credit Fact of the Day

Credit Fact of the Day: Be aware that paying off a collection account will not remove it from your credit report. It will stay on your report for seven years. On the other hand, contact us about having the account actually removed at 1-866-997-6591.

Check this out!

How to protect your credit during the holidays! Click on the link <---- for more information!

Check your credit report now!

Check Your Credit Report – Credit score repair begins with your credit report. Your credit report contains the data used to calculate your score and it may contain errors. In particular, check to make sure that there are no late payments incorrectly listed for any of your accounts and that the amounts owed for each of your open accounts is correct. We can fix those errors by disputing to both the bureau and creditor in your behalf. Call us for more information to 866-997-6591.