Credit FAQ
When I checked my credit scores online I had higher scores, what happened?
There are different scoring models, for instance: consumer, auto, mortgage.
I heard pulling your own credit lowers your score. Will it hurt if I look at my own?
No. The inquires that impact your score are for credit pursuit inquiries. Others, such as pre-employment, tenant, insurance, are not for the purpose of obtaining credit and so do not effect your score. Pulls on your credit may effect your score anywhere from 2 – 50 points.
I paid off my credit cards, should I close them to improve my score?
Remember that part of a good credit score is credit history. If you’ve had your credit cards for a long time, it’s probably a good idea to keep them open. Ideally create activity, but low balances. Even if you have several credit cards, if you’ve had them for a long time, this enhances your score.
Why do Finance Company Accounts negatively effect my score?
When you apply with a finance company, your score will be slightly lower than a pull through another vendor. The model assumes that you do not qualify for better credit lines, so are seeking a money source that does most of it’s business with people who have credit challenges. So, your score will be lower and your rate will be higher. If you do business with a finance company, even if you have an excellent record of paying your bills, there is not as much positive impact as through a traditional lender.
I need to have errors on my credit report taken care of quickly, so that my financing can go through.
Loan officers have the ability to get accounts cleared off of your credit report very quickly if they have the correct documentation. This is called a rapid rescore or rapid recheck. There is a cost for this service. Please note that you are paying a fee to have these items removed quickly, so that you are paying for speed, not for the corrected information. These are reported the credit repositories and are corrected at the source.
Make sure that you review your credit report often and request your free reports once a year. Why do I have 3 different credit scores and why is there such a big difference between the 3 scores?
You have 3 different credit scores because there are 3 main credit bureaus, or 3 main credit repositories. There is TransUnion, Equifax, and Experian. Your credit scores are different between the 3, because each one of them has their own different credit scoring model that they use. That means that different items will affect your score differently between each of them. There may be a big difference in your scores between the three of the bureaus because of many reasons. One reason could be that some creditors only report to 1 or 2 of the bureaus and others report to all 3. If one of the creditors that does not report to TransUnion and Equifax, but reports to Experian has a bad payment history on your liability with them, your Experian score could be much lower than your TransUnion and Equifax. I paid off my credit cards and checked my credit and nothing changed on my credit report
The credit reporting companies can sometimes be a month or two behind the actual account activity so you may need to give it a little time to catch up. They also update on the 15th of every month so you need to check your credit after this date for any new activity to be recorded. How much do credit inquiries really affect my credit score?
Credit inquires account for 10% of your total credit score. That 10% can make a big difference when you are looking to purchase a new home or refinance your existing one. It is in your best interest to shop for the items that you need (house, car, new credit cards), when you are ready to buy them. This should help cut down on your total number of credit inquiries. Why credit inquiries from several mortgage companies hurt my credit score?
Credit inquiries within the same industry within a 30 day period count as 1 inquiry. You are not punished for shopping for the best mortgage loan. |
