Credit reportsÂ Question ??

Question

Hello All Members,

What does my credit report have to do with my credit score?
Please give me some comments about my question.

Thanks in advance.

Marcus Mccray · Answer

I tend to get long winded when talking about credit so I'll try to keep it short. This is what adds points (does not apply to installment payments ie car, house,)

* Payment history-on time, above the minimum
* Amounts owed-obviously this should be as low as possible but never $0
* Length of credit history-the longer you've had an active credit card the better
* New credit-NO NEW CREDIT this drops your score!
* Types of credit used-the more active credit accounts you have (in good standing) the higher your score

You want to pay on time, over the minimum payment amount. The secret is to always carry revolving  credit card balances but keep your balances low but never at $0. Always ask your credit card companies to increase your limit and/or lower you interest. This will help you take advantage of the formula above.

Buying a car is an installment account and may have even dropped your score  since its a new account. Its best to work with revolving accounts that you already have like VISA , Master, department store, or gas cards. Make purchases with those use the info above to raise your score.

Hope this helps!

Marcus Mccray · Answer

No, asking for limit increases does not incur a hard inquiry because when you call your credit card company they don't have to run your credit report to see your history or make the determination to raise your limit. That is an on the spot decision that can happen over the phone. Use supporting facts like if you have never been late and/or you use the card often. Or you can always use the classic "I just got a better offer in the mail from another credit card company".
As far as hard inquiries go you shouldn't worry about those unless you're trying to get approved for more credit. Even then you would have had to be applying for credit like a madman within a short period of time to be declined especially if you have good credit already. When applying for a car or home loan you have a 30-day period where all your hard inquiries/applications count as 1 hit only. The credit reporting agencies know this is a big decision and most people don't go with the first loan offered but rather shop around for the best possible financing. Overall hard inquiries don't have that much of an affect on your score. And soft inquiries, when you or a company requests your credit w/ out you applying for anything have no affect on your score wha so ever.

Marcus Mccray · Answer

The trick to keeping your score moving upwards is to carry low balances on your revolving credit cards but if your score is good then I wouldn't worry about it. I'd just get that car paid off ASAP.

Marcus Mccray · Answer

Just in case this is a legit question, your credit score is based upon the information found in your credit report. From that information the arrive at your score based on the following criteria...
    *  Payment history 35%
    * Amounts owed 30%
    * Length of credit history 15%
    * New credit 10%
    * Types of credit used 10%

Brian Levredge · Answer

If you are asking for line increases wouldn't that result in a bunch of hard inquiries into your history which may lower your score?  That's what I've always been told.  Is there a magic number of inquiries you can have without getting your score dinged?

Vikram C. · Answer

Thanks for the tips, Marcus.  I am too cheap to pay credit card interest but will see if I can pay it on a very low amount each month.  To be honest, my credit is pretty good as it is but I think it should be the highest possible score.  I guess I need to do some work to get to that level.

I see your point about the car payment making things worse because it is a new loan.  I thought I will make a couple of payments on time and then pay off the balance in a few months in order to show that I can make loan payments on time if I choose to have loans.

Vikram C. · Answer

Marcus, exactly how do these factors affect one's score?  I am asking because my credit score, although good, is not as good as I would like.  I find it funny because, according to me, I should have the best possible credit score - completely debt-free, always pay credit cards early to avoid having to pay interest.

But it looks like my lack of debt may have decreased my score instead of increasing it.  So I bought a car last week with 2.9% financing.  Maybe my new indebtedness will make me more attractive to future lenders.  Kind of perverse, but seems to be what they are looking for.

Josh Green · Answer

why do i think this is spam?

Jon Holdman · Answer

You may be correct, Josh, but lets assume its a legit question.  If another first time posts makes a post that "answers" this question with an ad, we'll know you're right.

Your credit score is calculated from the items in your credit report.  Do you have a more specific question?

Credit reportsÂ Question ??

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