Credit Inquiries

13 Replies

Hello BP!

I am about to close on my second MFR. I have some questions as I am pulling a LOC on the properties etc.

I have already located a local bank willing to take a second on my current properties. Hopefully will be moving ahead with that shortly.  

My question is how do you get past the credit inquiries and new loans killing your score.  I realize only %10 of your actual score is affected with inquiries, but as I move ahead in this game their starting to pile up. Along with new loans.

Is their anything that I can do to help this, as currently I have close to a 700 score from all three CRA's and is like it to continue to go up not down.

Thanks in advance.

I'm not sure I can offer too much since I am a newbie but I am interested in what other may have to say about the topic. This has been a big concern of mine as I get started. Are you sure it's the inquiries that are hurting you and not the credit utilization ratio?  As you said, inquiries only count for a small part of your score and your credit/debt ratio carries more weight. I would imagine someone would have a high ratio if they are continuously leveraging equity. I look forward to seeing what others have to say, and hopefully some ways to avoid this. 

Oh I'm sure their are other factors keeping my score low aswell.  But I know everytime I have a hard inquiry it takes a couple points and obviously a new mortgage with a 0 history takes some aswell.

@Derek Woods

I had the same problem during accumulation mode.  I'm still in accumulation mode but several years ago I had both guns blazing accumulating portfolio loans to keep me ball debt growing.

Check out a letter I wrote a few years ago to the portfolio lender I was dealing with.  The letter is saved in BP, Resources, Fileplace, Letters.... page 2.... "Letter to Lender Responding About Credit Inquiries".  I was literally dead in the water until I wrote this letter.  Letters to the portfolio lenders was the most effective communication for me during the process.


Frank

@Derek Woods

Yes it worked. It kept the ball rolling.  Lenders need tangible information to convey, establish credibility and present to people inside the bank operation.  One letter will not sell them.  One letter is just a piece to the puzzle to sell ourselves.

Frank 

The quality of the documents you prepare for the lenders will also help determine how quickly they process your application.  I  keep all documents presented to banks clean, neat, no hand writing and packaged in a binder.  Chris Clothier had a video about this tactic a couple years back that stuck with me.


Frank

@Derek Woods , when you have several similar inquiries in a short amount of time, it looks more like you are shopping around for the best rate. Say 4 banks check you out within 2 weeks. If you have a mortgage lender, 6 credit cards and an auto loan inquiries within 2 weeks, it looks like you are spending money as fast (or faster) than you can make it.

When was the last time you got a copy of your credit report? You are allowed one free copy from each of the three reporting agencies every 12 months. Make sure there is no incorrect information, and if there is, take the time to dispute it to clear up your report as much as possible.

Someone above mentioned a high debt to credit ratio. If you have a credit card with a $20,000 limit, and you have a $19,000 balance, that looks far worse than the same card with a $2,000 balance.

Your original post says you have a close to 700 credit score. Are you 690 close or 710 close? Your credit score says so much about you. Concentrate on raising it above 720. Good luck!

@Mindy Jensen

I am around 690 close.  I do not have any high credit card balances above 10%.  I did have a state lien against me for school bills. It has been paid for 3yrs now.  I have already contacted the state and the will not remove it.  I also have an outstandong collection acct. that isnt mine that will fall off my report in August.  I have inquired with all the credit agencies multiple times about having it removed with no luck.  I HAD 5 other fraudulent cards in my name that I have gotten removed slowly but surely.  

As you said it appears as though I'm spending it faster then I can make, but that's not the case.   All I had prior to starting all this was a small personal loan open at the time and a credit card with a 2k limit.  I make over 100k a yr at my day job.  And I owned several assets outright.