Credit Scores and Inquiries
Now if you want to know about what’s important before you contact these lenders… please keep reading. Getting approved for credit is a great feeling as well as making you feel important. But there is a draw-down that should be mentioned before applying with many lenders over a certain period of time. It’s called “Credit Inquires“, too many of these and your credit score could go down.
What’s a credit inquiry and credit score? Well a credit inquiry shows other lenders and creditors how many times you have applied for credit. If you apply for credit a bunch of times…it’s recorded in your credit file (for 2 years, by the way) with the credit bureaus. Sometimes applying for to much credit in a short period of time makes you look desperate to get credit, or could suggest that you are being turned down for credit and going to the next place to try again.
This action will also result in your credit score going down. A credit score, commonly known as a FICO score, is a quick reference number that suggest your credit worthiness. I, for example recently checked my fico credit score with Trans Union, and it says my fico credit is a 762. On their scale it suggests to lenders that I have good credit.
850 are the highest score anybody with absolutely perfect credit in the eyes of FICO can have.
Your credit score is like a report card for your credit history. It’s a sophisticated rating system, once only seen by lenders, that’s used to determine if you’re a good or bad credit risk. It compiles all your available financial data into a model that computes a score between 350 and 850, the higher score being ideal. Your score is based on your payment history, credit usage, and length of credit history, bankruptcies, and more. Credit Analysis helps you understand what makes a person’s credit good or bad - and how it can be improved. Knowing your score allows you to improve your rating and obtain less costly loans.
With credit scoring there are many factors going into this formula calculation. This is not published to the public, but discussed in many forums on the internet. Just go to www.google.com and use the search term “fico score” to learn about it.
Tags: credit inquiry, credit history, credit scores
