An inquiry is placed on the credit bureau report when a consumer applies for a new loan or a new credit card. The lender will pull a copy of the credit bureau report which then places an "inquiry" on the consumer’s bureau. Currently, today’s consumer has had one or fewer inquires on their accounts within the last year. When searching for new credit; less than 6% had 4 or greater inquiries deriving from new credit applications.
Archive for March, 2008
Credit Inquiries
Friday, March 7th, 2008Save the World!
Friday, March 7th, 2008
Save the world. Get good credit.
Credit Statistics
Friday, March 7th, 2008This information comes directly from a Survey conducted by the Consumer Finance division of the Federal Reserve. The following is a "snapshot" of the average debt for an average American Family:
- 46.2% of families have a credit card balance; this represents a 44.4% as compared to 2001.
- The mean balance has increased to $5,100 vs. $4,400 in 2001.
- The median balance has increased to $2,200 vs. $2,100 in 2001.
- The median income is $43,200 and credit card debt represents 5% of this annual income.
- The average APR is 13%; equating to $700 per year in credit card interest.
- 74.9% of families have a credit card; 42% of these families pay off the balance each month.
- If you are a consumer who pays your credit card off each month, make sure you are using a card with a rebate or a reward. You can earn cash rebates on these types of credit cards.
Save money.
Thursday, March 6th, 2008The higher your credit scores, you the less you pay to buy on credit - no matter whether you’re getting a home loan, cell phone, a car loan, or signing up for credit cards. For example, on a $216,000 30-year, fixed-rate mortgage:
|
If your FICO® score is |
Your interest rate is |
…and your monthly payment is |
|
760 - 850 |
6.3% |
$1,337 |
|
700 - 759 |
6.52% |
$1,368 |
|
680 - 699 |
6.7% |
$1,394 |
|
660 - 679 |
6.91% |
$1,424 |
|
640 - 659 |
7.34% |
$1,487 |
|
620 - 639 |
7.89% |
$1,568 |
As you can see in the example above using today’s national rates, a person with FICO scores of 760 or better will pay $256 less per month for a $216,000 30-year, fixed-rate mortgage than a person with FICO scores below 620 - THAT’S A SAVINGS OF NEARLY $3,072 A YEAR. You can see that it pays - literally - to improve your FICO scores.
Improve my Credit Score!
Thursday, March 6th, 2008Improving Your Score:
Improving your score isn’t a race; it’s a marathon. It takes time and endurance. The best advice is to manage credit responsibly over time. See how much money you can save by just following these tips and raising your score.
Payment History Tips
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Pay your bills on time. Delinquent payments and collections can have a major negative impact on your score.
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If you have missed payments, get current and stay current. The longer you pay your bills on time, the better your score.
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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.
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If you are having trouble making ends meet, contact your creditors. This won’t improve your score immediately, but if you can begin to manage your credit and pay on time, your score will get better over time.
Amounts Owed Tips
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Keep balances low on credit cards and other "revolving credit". High outstanding debt can affect a score. Score explanation
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Pay off debt rather than moving it around.
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The most effective way to improve your score in this area is by paying down your revolving credit. In fact, owing the same amount but having fewer open accounts may lower your score.
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Don’t close unused credit cards as a short-term strategy to raise your score.
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Don’t open a number of new credit cards that you don’t need just to increase your available credit. This approach could backfire and actually lower score.
Length of Credit History Tips
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If you have been managing credit for a short time, don’t open a lot of new accounts too rapidly. New accounts will lower your average account age, which will have a larger effect on your score if you don’t have a lot of other credit information. Also, rapid account buildup can look risky if you are a new credit user.
New Credit Tips
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Do your rate shopping for a given loan within a focused period of time. Scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur.
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Re-establish your credit history if you have had problems. Opening new accounts responsibly and paying them off on time will raise your score in the long term.
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It’s OK to request and check your own credit report. This won’t affect your score, as long as you order your credit report directly from the credit reporting agency or through an organization authorized to provide credit reports to consumers.
Types of Credit Use Tips
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Apply for and open new credit accounts only as needed. Don’t open accounts just to have a better credit mix - it probably won’t raise your score.
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Have credit cards - but manage them responsibly. In general, having credit cards and installment loans (and paying timely payments) will raise your score. Someone with no credit cards, for example, tends to be higher risk than someone who has managed credit cards responsibly.
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Closing an account doesn’t make it go away. A closed account will still show up on your credit report and even affect your score.
