“Credit Inquires” Not All Created Equal
A “credit inquiry” is a formal request to review a person’s credit report and stays on ones credit report for 120 days after it was pulled. A person’s credit score is comprised of five different components, with “new credit” being one of the smallest variables. New credit accounts for only 10% of a person’s overall credit score. Searching for new credit is relevant to your credit score because when you make a credit inquiry, it’s a specific request to increase your level of indebtedness. The reasoning behind why inquiries are viewed negatively is that the possibility of taking on additional levels of debt increases the probability of a default. For each new credit inquiry, it increases the probability that you’re taking on larger amounts of debt, which makes it less likely that you’ll make good on your payments to your creditors. Read the rest of this entry
How to Protect Your High Credit Score
So, you’re ready to start shopping for a mortgage, and your lender wants to “pull your credit”. You’re worried it will harm your coveted credit score. Today, the credit bureaus clearly address this concern and state that your score will not continually drop when mortgage lenders pulls your credit; that is, if it’s done correctly. Read the rest of this entry
What Is Your Credit All About?
Understanding how your credit works is vital in today’s world. Nowadays, it seems that your credit matters more than how much cash you have in the bank. So here is a summary of what it’s all about. The three big credit agencies are Experian, Equifax, and TransUnion, also known as repositories. Each agency uses a scoring system from the information reported to them about consumers. TransUnion’s uses what is called a Vantage Score, while Experian and Equifax is FICO or Beacon. Within these agencies there are three types of credit reports that can be pulled. Read the rest of this entry