Inquiries on Your Credit Score
When applying for credit, the lenders or the creditors are looking onto your credit report to see if you are responsible enough to pay for your debts. They are given authorizations to receive a copy of your report from a credit bureau. These “looks” that they are making to your report are called inquiries. Each inquiry can make an impact to your score, depending on how long your credit history is, and on how many creditors are looking on your score.
How are Credit Scores Affected by Inquiries?
As mentioned previously, inquiries still vary. Most of the time, each inquiry deducts five (5) points from your score. Generally, it does not affect much, however it would matter if the borrower only has few accounts or does not have much yet of a credit history. Several inquiries done at once also indicate a high risk as it may describe the borrower as someone with a grave financial difficulty or even as someone that may possibly declare bankruptcy.
How can a low credit score be raised?
A negative rating on your credit report can stay on file for seven (7) years. It means that when you have bad debt, it will be seen by lenders in a significant amount of time. However, there are huge chances that creditors will look on your most recent activity, rather than dwelling on your previous records. Since most part of your score is based on payment history and existing debts, it’s best to keep current ones paid promptly, and in their specified amounts. There are some tips given to borrowers with low credit scores that can possibly give them better ratings.
Here are some potential actions to possibly increase your score:
- Start fresh. Re-establish your history if you’ve had problems in the past regarding keeping a good track record in paying your bills. Try to open new accounts and pay for them on time.
- It was said that having a bad score is like gaining weight; it takes time to go back to its previous form (or score, in this case). Quick fixes are not advisable because there are chances it might backfire.
- Pay existing bills on time.
- Check your credit score and see the areas you need to improve on.
Getting Your Own Credit Report
Getting credit reports make an impact to credit scores, but in this case, requesting your own reports do not affect your credit score, provided that it comes from organizations authorized to give credit reports to consumers such as myFICO. In those instances, own personal inquiries will not affect the FICO score.
Why Is Checking Your Own Score Important?
Checking your credit or FICO score is important because by doing so, you are able to see any errors or disputable items that you can raise for checking. You can verify if any payments are listed incorrectly, or if any fully paid debts still show any balances. You can also confirm if amounts owed for existing loans are correctly entered. By doing so, you are able to straighten out any discrepancies on your credit history, and aside from that, you can also avoid any chances of being a victim of identity theft.