When someone makes a credit inquiry on you I heard that it reduces you fico score how long before these inquires drop off and does your fico score go back to its original numbers
It depends on what your credit is being pulled for. If it it for a house or a car you have a 2 week window to shop around. After that your score will drop 2 points per pull. The reason for this is that auto dealers were sending a person's application to several lenders at once and it was really hurting people on their scores. The hits will stay for 2 years. Most lenders just base things on score and your personal profile. If your credit is pulled and you have numerous credit pulls for credit cards, autos, houses, department stores. The lender may think you are money hungry and you don't know how to manage your spending.
Everything you always wanted to know about FICO...
....per Equifax:
Personal Information.....
The following personal information has been reported to Equifax by your creditors. None of your personal
information is used in determining your FICO score. In addition, most lenders do not rely this information for
loan review. They will collect it from you directly, on a loan application.
Derogatory Public Records...
FICO scores consider the following public record information as negative: bankruptcy, foreclosure, garnishments, legal items and tax liens. This
information is collected by the Credit Reporting Agency and stored on your file.
Collections...
A collection happens when your creditor has turned over your account where you have not paid as agreed to a collection agency. FICO scores consider
collections to be negative.
Delinquencies and Derogatory information on accounts...
Delinquency information is provided by the lender when you have missed a payment on your credit obligation. Other derogatory indicators, such as a
comment with the credit obligation (for example, "account included in bankruptcy", are also considered negative by the FICO score. Typically, late
payment information on your credit obligations is reported by the lender as 30 days, 60 days, 90 days, 120 days, 150 days, 180 days late or as a
charged-off account.
Inquiries...
An inquiry is a notation on your credit report showing what entities (usually lenders) have requested to view your report. Your credit report includes two
types of inquiries:
Involuntary inquires: such as when lenders check to see which consumers may qualify for their pre-approved credit offer in the mail or the inquiry
posted for this Score Power request. The FICO score does not consider these types of inquiries and lenders do not see these types either when
accessing your credit report.
Voluntary inquiries: spurred by your own requests for credit, such as when you apply for a loan, you authorize your lender to ask for a copy of
your credit report.
FICO scores only consider voluntary inquiries initiated by you (when you were seeking credit) over the most recent 12-month period. These include
mortgage, credit card, auto loan and other requests for credit you may have made. FICO scores are engineered so that your score is not lowered from the
multiple inquiries that may occur when you shop for the best auto or home loan.
A single inquiry will usually have little impact on your score.
Range of BEACON® FICO® scores...
BEACON® FICO® scores can range from 300 to 850, but the majority of scores usually fall within the 600s and 700s.
Since there is no one universal "score cutoff" used by all lenders, it is hard to say what a good score is outside the
context of a particular lending decision. For example, a score of 750 may qualify you for a platinum credit card, whereas a
score of 675 may indicate you're a better match for a standard card.
Your lender may be able to give you guidance on the criteria that it uses for a given credit product. Based on the general
population's BEACON® FICO® scores, the ranges and percentages of scores are:
20% are above
780
20% are in the range
745-780
20% are in the range
690-745
20% are in the range
620-690
20% are below
619
While many lenders use BEACON® FICO® scores to help them make lending decisions, each lender has its own strategy,
including the level of risk it finds acceptable for a given credit product.
What types of information are used in calculating my BEACON® FICO® score...
The BEACON® FICO® score evaluates five main categories of information. Listed from most important to least important,
these are:
1.Payment History - Approximately 35% of your score is based on this category.
Payment information on accounts such as Visa, MasterCard, American Express and Discover; retail
department store accounts; installment loans; finance company accounts and mortgage loans.
Public record and collection items such as bankruptcies, foreclosures, wage attachments, liens,
judgments and delinquencies reported to collection agencies.
Details on late or missed payments (delinquencies) and public record and collection items, specifically
focusing on how late they were, how much was owed and the recency and frequency of the
occurrence.
How many accounts show no late payments.
2.Amounts Owed - Approximately 30% of your score is based on this category.
The amount owed on all accounts.
The amount owed on different types of accounts.
Whether you are showing a balance on certain type of accounts.
The number of accounts with balances.
How much of the total credit line is being used on credit cards and other revolving credit accounts.
How much of the installment loan accounts is still owed, compared with the original loan amounts.
3.Length of Credit History - Approximately 15% of your score is based on this category.
How long your credit accounts have been established. The score considers both the age of your oldest
account and an average age of all your accounts.
How long specific credit accounts have been established.
How long it has been since you used certain accounts.
****Must Reach Freshman Investor status before posting URL's***w Credit - Approximately 10% of your score is based on this category.
How many new accounts you have.
How long it has been since you opened a new account.
How many recent requests for credit you have made, as indicated by inquiries to credit reporting
agencies in connection with transactions initiated by you. The score does not take into account requests
a creditor has made for your credit file or score in order to make a pre-approved credit offer, or to review
your account with them, nor does it take into account your request for a copy of the credit file.
Length of time since creditors made credit file inquiries.
Whether you have a good recent credit history, following past payment problems.
****Must Reach Freshman Investor status before posting URL's***ype of credit use - Approximately 10% of your score is based on this category.
What kinds of credit accounts you have and how many of each.
What types of information are NOT used in calculating my BEACON® FICO® score...
Your race, color, religion, national origin, sex or marital status
Your age
Your salary, occupation, title, employer, date employed or employment history
Where you live
Certain types of inquiries such as promotional, account review, insurance or employment related inquiries
Any information not found in your credit file
Any information that is not proven to be a predictive of future credit performance.
How do I interpret my BEACON® FICO® score...
The BEACON® FICO® score is accompanied by up to four reason codes that explain the top reasons why your score is
not higher. These score reason codes are more useful than the score itself in helping you determine how you might
improve your score over time. However, if you already have a high score (for example, in the mid 700s or higher) some of
the reasons may not be very helpful, as they may be marginal factors related to the last three categories described
previously (length of credit history, new credit and types of credit in use.)
What are the most common score reason codes...
Serious delinquency.
Serious delinquency, and public record or collection field.
Time since delinquency is too recent or unknown.
Level of delinquency on accounts is too high.
Number of accounts with delinquency is too high.
Amount owed too high on accounts.
Ratio of balances to credit limits on revolving accounts is too high..
Length of time accounts has been established is too short.
Too many accounts with balances.
How often does my score change...
Your credit file is continually updated with new information from your creditors. The BEACON® FICO® score is calculated
based on the latest "snapshot" of information contained in your file at the time the score is requested. Therefore, your
BEACON® FICO® score from a month ago is probably not the same score a lender would get from the credit-reporting
agency today. Fluctuations of a few points from month to month are quite common.
Why are my scores different...
There are several reasons for variation of credit scores. Firstly, there are other credit reporting agency scores, although
BEACON® FICO® scores are by far the most commonly used. Other credit scores may evaluate your credit file differently
than the BEACON® FICO® score, and in some cases a higher score may mean more risk, not less risk as with BEACON®
FICO® scores.
Secondly, many lenders use their own scores, which often will include the BEACON® FICO® score as well as other
information about you.
Finally, your score may be different at each of the three main credit-reporting agencies as the FICO® score only considers
the data in your credit file from that agency. If your score from the three credit reporting agencies is different, it is
probably because the information those agencies have on you differs.
How can I improve my score...
Here are some suggested tips to follow:
DO:
Pay your bills on time. Delinquent payments and collections can have a major negative impact on your score.
If you have missed payments, get current and stay current. The longer you pay your bills on time, the better your
score.
If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor. This will
not improve your score immediately, but if you can begin to manage your credit and pay on time, your score will
get better over time.
Keep balances low on credit cards and other revolving credit. High outstanding debt can affect a score.
Pay off debt rather than move it around.
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.
Note that it is OK to request and check your own credit file. This will not affect your score, as long as you order
your credit file directly from the credit-reporting agency or through an organization authorized to provide credit
files to consumers.
Apply for and open new credit accounts only as needed.
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.
DON'T:
Close unused credit cards as a short-term strategy to raise your score.
Open a number of new credit cards that you do not need, just to increase your available credit. This approach
could backfire and actually lower your score.
If you have been managing credit for a short time, do not 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 do not have a lot of
other credit information. Also, rapid account build-up can look risky if you are a new credit user. Do your rate
shopping for a given loan within a focused period of time. FICO® 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.
If derogatory information is removed, will my score increase...
It depends. It is impossible to say how important any single factor or new information is in determining your score because
the importance of each factor depends on the overall information in your credit report. What is important in scoring is the
mix of information, which varies from person to person and for any one person over time.
For some people, a given factor may be more important than for someone else with a different credit history. In addition,
as the information in your credit report changes, so does the importance of any factor in determining your score. Some
helpful tips are:
If there is inaccurate derogatory information on your credit report, get it corrected.
The score evaluates derogatory information in several ways - how often, how recent and how severe. If you
have a pattern (e.g. several derogatory items and late payments) of this type of behavior, removing one of these
may not impact the score very much.
Paying off a derogatory item such as a collection or charged off account will NOT remove that item from your
report. The fact that it happened is still important and evaluated by lenders and by the score.
Be aware that:
Paying off a collection account, late pay or derogatory item will not remove it from your credit file. It will stay on
your file for seven years along with any dollar amount associated with the past due.
Closing an account does not remove it from your credit file. A closed account will still show up on your credit file,
and may be considered in calculating your score.
Will I be penalized for shopping around for the best rate...
Looking for new credit can equate with higher risk, but most credit scores are not affected by multiple inquiries for your
credit score from auto or mortgage lenders within a short period of time. The BEACON® FICO® score treats these as a
single inquiry, which will have little or no impact on your credit score.
This is how it works. The BEACON® FICO® score ignores all auto- or mortgage-related inquiries that occur within the
30-day period previous to an inquiry from an auto or mortgage lender (called the "buffer" period). And prior to that buffer
period, the scoring software also notes when earlier inquiries were made - if any - and counts back 14 days from each
one. The score then counts all auto- or mortgage-related inquires made within any 14-day period as just one inquiry.
For example: John Doe is shopping for a mortgage loan and a lender gets his credit report on November 30. Johns credit
report also lists three other mortgage inquiries that were made earlier that month. The FICO® score ignores those previous
mortgage inquiries because they all fell into the 30-day buffer period.
Now let us say that John also purchased a car three months before he began shopping for a mortgage loan. His car
shopping resulted in three inquiries from different banks and credit unions over several days. Since they occurred within
the same 14-day period, those three inquiries are counted as just one inquiry by the FICO® score.
Quote:
On 2003-07-04 14:06, 2000rock wrote:
Everything you always wanted to know about FICO...
....per Equifax:
Personal Information.....
The following personal information has been reported to Equifax by your creditors. None of your personal
information is used in determining your FICO score. In addition, most lenders do not rely this information for
loan review. They will collect it from you directly, on a loan application.
Derogatory Public Records...
FICO scores consider the following public record information as negative: bankruptcy, foreclosure, garnishments, legal items and tax liens. This
information is collected by the Credit Reporting Agency and stored on your file.
Collections...
A collection happens when your creditor has turned over your account where you have not paid as agreed to a collection agency. FICO scores consider
collections to be negative.
Delinquencies and Derogatory information on accounts...
Delinquency information is provided by the lender when you have missed a payment on your credit obligation. Other derogatory indicators, such as a
comment with the credit obligation (for example, "account included in bankruptcy", are also considered negative by the FICO score. Typically, late
payment information on your credit obligations is reported by the lender as 30 days, 60 days, 90 days, 120 days, 150 days, 180 days late or as a
charged-off account.
Inquiries...
An inquiry is a notation on your credit report showing what entities (usually lenders) have requested to view your report. Your credit report includes two
types of inquiries:
Involuntary inquires: such as when lenders check to see which consumers may qualify for their pre-approved credit offer in the mail or the inquiry
posted for this Score Power request. The FICO score does not consider these types of inquiries and lenders do not see these types either when
accessing your credit report.
Voluntary inquiries: spurred by your own requests for credit, such as when you apply for a loan, you authorize your lender to ask for a copy of
your credit report.
FICO scores only consider voluntary inquiries initiated by you (when you were seeking credit) over the most recent 12-month period. These include
mortgage, credit card, auto loan and other requests for credit you may have made. FICO scores are engineered so that your score is not lowered from the
multiple inquiries that may occur when you shop for the best auto or home loan.
A single inquiry will usually have little impact on your score.
Range of BEACON® FICO® scores...
BEACON® FICO® scores can range from 300 to 850, but the majority of scores usually fall within the 600s and 700s.
Since there is no one universal "score cutoff" used by all lenders, it is hard to say what a good score is outside the
context of a particular lending decision. For example, a score of 750 may qualify you for a platinum credit card, whereas a
score of 675 may indicate you're a better match for a standard card.
Your lender may be able to give you guidance on the criteria that it uses for a given credit product. Based on the general
population's BEACON® FICO® scores, the ranges and percentages of scores are:
20% are above
780
20% are in the range
745-780
20% are in the range
690-745
20% are in the range
620-690
20% are below
619
While many lenders use BEACON® FICO® scores to help them make lending decisions, each lender has its own strategy,
including the level of risk it finds acceptable for a given credit product.
What types of information are used in calculating my BEACON® FICO® score...
The BEACON® FICO® score evaluates five main categories of information. Listed from most important to least important,
these are:
1.Payment History - Approximately 35% of your score is based on this category.
Payment information on accounts such as Visa, MasterCard, American Express and Discover; retail
department store accounts; installment loans; finance company accounts and mortgage loans.
Public record and collection items such as bankruptcies, foreclosures, wage attachments, liens,
judgments and delinquencies reported to collection agencies.
Details on late or missed payments (delinquencies) and public record and collection items, specifically
focusing on how late they were, how much was owed and the recency and frequency of the
occurrence.
How many accounts show no late payments.
2.Amounts Owed - Approximately 30% of your score is based on this category.
The amount owed on all accounts.
The amount owed on different types of accounts.
Whether you are showing a balance on certain type of accounts.
The number of accounts with balances.
How much of the total credit line is being used on credit cards and other revolving credit accounts.
How much of the installment loan accounts is still owed, compared with the original loan amounts.
3.Length of Credit History - Approximately 15% of your score is based on this category.
How long your credit accounts have been established. The score considers both the age of your oldest
account and an average age of all your accounts.
How long specific credit accounts have been established.
How long it has been since you used certain accounts.
****Must Reach Freshman Investor status before posting URL's***w Credit - Approximately 10% of your score is based on this category.
How many new accounts you have.
How long it has been since you opened a new account.
How many recent requests for credit you have made, as indicated by inquiries to credit reporting
agencies in connection with transactions initiated by you. The score does not take into account requests
a creditor has made for your credit file or score in order to make a pre-approved credit offer, or to review
your account with them, nor does it take into account your request for a copy of the credit file.
Length of time since creditors made credit file inquiries.
Whether you have a good recent credit history, following past payment problems.
****Must Reach Freshman Investor status before posting URL's***ype of credit use - Approximately 10% of your score is based on this category.
What kinds of credit accounts you have and how many of each.
What types of information are NOT used in calculating my BEACON® FICO® score...
Your race, color, religion, national origin, sex or marital status
Your age
Your salary, occupation, title, employer, date employed or employment history
Where you live
Certain types of inquiries such as promotional, account review, insurance or employment related inquiries
Any information not found in your credit file
Any information that is not proven to be a predictive of future credit performance.
How do I interpret my BEACON® FICO® score...
The BEACON® FICO® score is accompanied by up to four reason codes that explain the top reasons why your score is
not higher. These score reason codes are more useful than the score itself in helping you determine how you might
improve your score over time. However, if you already have a high score (for example, in the mid 700s or higher) some of
the reasons may not be very helpful, as they may be marginal factors related to the last three categories described
previously (length of credit history, new credit and types of credit in use.)
What are the most common score reason codes...
Serious delinquency.
Serious delinquency, and public record or collection field.
Time since delinquency is too recent or unknown.
Level of delinquency on accounts is too high.
Number of accounts with delinquency is too high.
Amount owed too high on accounts.
Ratio of balances to credit limits on revolving accounts is too high..
Length of time accounts has been established is too short.
Too many accounts with balances.
How often does my score change...
Your credit file is continually updated with new information from your creditors. The BEACON® FICO® score is calculated
based on the latest "snapshot" of information contained in your file at the time the score is requested. Therefore, your
BEACON® FICO® score from a month ago is probably not the same score a lender would get from the credit-reporting
agency today. Fluctuations of a few points from month to month are quite common.
Why are my scores different...
There are several reasons for variation of credit scores. Firstly, there are other credit reporting agency scores, although
BEACON® FICO® scores are by far the most commonly used. Other credit scores may evaluate your credit file differently
than the BEACON® FICO® score, and in some cases a higher score may mean more risk, not less risk as with BEACON®
FICO® scores.
Secondly, many lenders use their own scores, which often will include the BEACON® FICO® score as well as other
information about you.
Finally, your score may be different at each of the three main credit-reporting agencies as the FICO® score only considers
the data in your credit file from that agency. If your score from the three credit reporting agencies is different, it is
probably because the information those agencies have on you differs.
How can I improve my score...
Here are some suggested tips to follow:
DO:
Pay your bills on time. Delinquent payments and collections can have a major negative impact on your score.
If you have missed payments, get current and stay current. The longer you pay your bills on time, the better your
score.
If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor. This will
not improve your score immediately, but if you can begin to manage your credit and pay on time, your score will
get better over time.
Keep balances low on credit cards and other revolving credit. High outstanding debt can affect a score.
Pay off debt rather than move it around.
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.
Note that it is OK to request and check your own credit file. This will not affect your score, as long as you order
your credit file directly from the credit-reporting agency or through an organization authorized to provide credit
files to consumers.
Apply for and open new credit accounts only as needed.
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.
DON'T:
Close unused credit cards as a short-term strategy to raise your score.
Open a number of new credit cards that you do not need, just to increase your available credit. This approach
could backfire and actually lower your score.
If you have been managing credit for a short time, do not 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 do not have a lot of
other credit information. Also, rapid account build-up can look risky if you are a new credit user. Do your rate
shopping for a given loan within a focused period of time. FICO® 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.
If derogatory information is removed, will my score increase...
It depends. It is impossible to say how important any single factor or new information is in determining your score because
the importance of each factor depends on the overall information in your credit report. What is important in scoring is the
mix of information, which varies from person to person and for any one person over time.
For some people, a given factor may be more important than for someone else with a different credit history. In addition,
as the information in your credit report changes, so does the importance of any factor in determining your score. Some
helpful tips are:
If there is inaccurate derogatory information on your credit report, get it corrected.
The score evaluates derogatory information in several ways - how often, how recent and how severe. If you
have a pattern (e.g. several derogatory items and late payments) of this type of behavior, removing one of these
may not impact the score very much.
Paying off a derogatory item such as a collection or charged off account will NOT remove that item from your
report. The fact that it happened is still important and evaluated by lenders and by the score.
Be aware that:
Paying off a collection account, late pay or derogatory item will not remove it from your credit file. It will stay on
your file for seven years along with any dollar amount associated with the past due.
Closing an account does not remove it from your credit file. A closed account will still show up on your credit file,
and may be considered in calculating your score.
Will I be penalized for shopping around for the best rate...
Looking for new credit can equate with higher risk, but most credit scores are not affected by multiple inquiries for your
credit score from auto or mortgage lenders within a short period of time. The BEACON® FICO® score treats these as a
single inquiry, which will have little or no impact on your credit score.
This is how it works. The BEACON® FICO® score ignores all auto- or mortgage-related inquiries that occur within the
30-day period previous to an inquiry from an auto or mortgage lender (called the "buffer" period). And prior to that buffer
period, the scoring software also notes when earlier inquiries were made - if any - and counts back 14 days from each
one. The score then counts all auto- or mortgage-related inquires made within any 14-day period as just one inquiry.
For example: John Doe is shopping for a mortgage loan and a lender gets his credit report on November 30. Johns credit
report also lists three other mortgage inquiries that were made earlier that month. The FICO® score ignores those previous
mortgage inquiries because they all fell into the 30-day buffer period.
Now let us say that John also purchased a car three months before he began shopping for a mortgage loan. His car
shopping resulted in three inquiries from different banks and credit unions over several days. Since they occurred within
the same 14-day period, those three inquiries are counted as just one inquiry by the FICO® score.
I HOPE THIS HELPS....
...as always,
GoodInvesting, Rocky
<font size=-1>[ Edited by 2000rock on Date 07/04/2003 ]</font>
Thanks this was perfect The very best reply
I've heard you are allowed up to 12 per year and it can effect your score up to 10%
It depends on what your credit is being pulled for. If it it for a house or a car you have a 2 week window to shop around. After that your score will drop 2 points per pull. The reason for this is that auto dealers were sending a person's application to several lenders at once and it was really hurting people on their scores. The hits will stay for 2 years. Most lenders just base things on score and your personal profile. If your credit is pulled and you have numerous credit pulls for credit cards, autos, houses, department stores. The lender may think you are money hungry and you don't know how to manage your spending.
Everything you always wanted to know about FICO...
, are also considered negative by the FICO score. Typically, late
....per Equifax:
Personal Information.....
The following personal information has been reported to Equifax by your creditors. None of your personal
information is used in determining your FICO score. In addition, most lenders do not rely this information for
loan review. They will collect it from you directly, on a loan application.
Derogatory Public Records...
FICO scores consider the following public record information as negative: bankruptcy, foreclosure, garnishments, legal items and tax liens. This
information is collected by the Credit Reporting Agency and stored on your file.
Collections...
A collection happens when your creditor has turned over your account where you have not paid as agreed to a collection agency. FICO scores consider
collections to be negative.
Delinquencies and Derogatory information on accounts...
Delinquency information is provided by the lender when you have missed a payment on your credit obligation. Other derogatory indicators, such as a
comment with the credit obligation (for example, "account included in bankruptcy"
payment information on your credit obligations is reported by the lender as 30 days, 60 days, 90 days, 120 days, 150 days, 180 days late or as a
charged-off account.
Inquiries...
An inquiry is a notation on your credit report showing what entities (usually lenders) have requested to view your report. Your credit report includes two
types of inquiries:
Involuntary inquires: such as when lenders check to see which consumers may qualify for their pre-approved credit offer in the mail or the inquiry
posted for this Score Power request. The FICO score does not consider these types of inquiries and lenders do not see these types either when
accessing your credit report.
Voluntary inquiries: spurred by your own requests for credit, such as when you apply for a loan, you authorize your lender to ask for a copy of
your credit report.
FICO scores only consider voluntary inquiries initiated by you (when you were seeking credit) over the most recent 12-month period. These include
mortgage, credit card, auto loan and other requests for credit you may have made. FICO scores are engineered so that your score is not lowered from the
multiple inquiries that may occur when you shop for the best auto or home loan.
A single inquiry will usually have little impact on your score.
Range of BEACON® FICO® scores...
BEACON® FICO® scores can range from 300 to 850, but the majority of scores usually fall within the 600s and 700s.
Since there is no one universal "score cutoff" used by all lenders, it is hard to say what a good score is outside the
context of a particular lending decision. For example, a score of 750 may qualify you for a platinum credit card, whereas a
score of 675 may indicate you're a better match for a standard card.
Your lender may be able to give you guidance on the criteria that it uses for a given credit product. Based on the general
population's BEACON® FICO® scores, the ranges and percentages of scores are:
20% are above
780
20% are in the range
745-780
20% are in the range
690-745
20% are in the range
620-690
20% are below
619
While many lenders use BEACON® FICO® scores to help them make lending decisions, each lender has its own strategy,
including the level of risk it finds acceptable for a given credit product.
What types of information are used in calculating my BEACON® FICO® score...
The BEACON® FICO® score evaluates five main categories of information. Listed from most important to least important,
these are:
1.Payment History - Approximately 35% of your score is based on this category.
Payment information on accounts such as Visa, MasterCard, American Express and Discover; retail
department store accounts; installment loans; finance company accounts and mortgage loans.
Public record and collection items such as bankruptcies, foreclosures, wage attachments, liens,
judgments and delinquencies reported to collection agencies.
Details on late or missed payments (delinquencies) and public record and collection items, specifically
focusing on how late they were, how much was owed and the recency and frequency of the
occurrence.
How many accounts show no late payments.
2.Amounts Owed - Approximately 30% of your score is based on this category.
The amount owed on all accounts.
The amount owed on different types of accounts.
Whether you are showing a balance on certain type of accounts.
The number of accounts with balances.
How much of the total credit line is being used on credit cards and other revolving credit accounts.
How much of the installment loan accounts is still owed, compared with the original loan amounts.
3.Length of Credit History - Approximately 15% of your score is based on this category.
How long your credit accounts have been established. The score considers both the age of your oldest
account and an average age of all your accounts.
How long specific credit accounts have been established.
How long it has been since you used certain accounts.
****Must Reach Freshman Investor status before posting URL's***w Credit - Approximately 10% of your score is based on this category.
How many new accounts you have.
How long it has been since you opened a new account.
How many recent requests for credit you have made, as indicated by inquiries to credit reporting
agencies in connection with transactions initiated by you. The score does not take into account requests
a creditor has made for your credit file or score in order to make a pre-approved credit offer, or to review
your account with them, nor does it take into account your request for a copy of the credit file.
Length of time since creditors made credit file inquiries.
Whether you have a good recent credit history, following past payment problems.
****Must Reach Freshman Investor status before posting URL's***ype of credit use - Approximately 10% of your score is based on this category.
What kinds of credit accounts you have and how many of each.
What types of information are NOT used in calculating my BEACON® FICO® score...
Your race, color, religion, national origin, sex or marital status
Your age
Your salary, occupation, title, employer, date employed or employment history
Where you live
Certain types of inquiries such as promotional, account review, insurance or employment related inquiries
Any information not found in your credit file
Any information that is not proven to be a predictive of future credit performance.
How do I interpret my BEACON® FICO® score...
The BEACON® FICO® score is accompanied by up to four reason codes that explain the top reasons why your score is
not higher. These score reason codes are more useful than the score itself in helping you determine how you might
improve your score over time. However, if you already have a high score (for example, in the mid 700s or higher) some of
the reasons may not be very helpful, as they may be marginal factors related to the last three categories described
previously (length of credit history, new credit and types of credit in use.)
What are the most common score reason codes...
Serious delinquency.
Serious delinquency, and public record or collection field.
Time since delinquency is too recent or unknown.
Level of delinquency on accounts is too high.
Number of accounts with delinquency is too high.
Amount owed too high on accounts.
Ratio of balances to credit limits on revolving accounts is too high..
Length of time accounts has been established is too short.
Too many accounts with balances.
How often does my score change...
Your credit file is continually updated with new information from your creditors. The BEACON® FICO® score is calculated
based on the latest "snapshot" of information contained in your file at the time the score is requested. Therefore, your
BEACON® FICO® score from a month ago is probably not the same score a lender would get from the credit-reporting
agency today. Fluctuations of a few points from month to month are quite common.
Why are my scores different...
There are several reasons for variation of credit scores. Firstly, there are other credit reporting agency scores, although
BEACON® FICO® scores are by far the most commonly used. Other credit scores may evaluate your credit file differently
than the BEACON® FICO® score, and in some cases a higher score may mean more risk, not less risk as with BEACON®
FICO® scores.
Secondly, many lenders use their own scores, which often will include the BEACON® FICO® score as well as other
information about you.
Finally, your score may be different at each of the three main credit-reporting agencies as the FICO® score only considers
the data in your credit file from that agency. If your score from the three credit reporting agencies is different, it is
probably because the information those agencies have on you differs.
How can I improve my score...
Here are some suggested tips to follow:
DO:
Pay your bills on time. Delinquent payments and collections can have a major negative impact on your score.
If you have missed payments, get current and stay current. The longer you pay your bills on time, the better your
score.
If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor. This will
not improve your score immediately, but if you can begin to manage your credit and pay on time, your score will
get better over time.
Keep balances low on credit cards and other revolving credit. High outstanding debt can affect a score.
Pay off debt rather than move it around.
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.
Note that it is OK to request and check your own credit file. This will not affect your score, as long as you order
your credit file directly from the credit-reporting agency or through an organization authorized to provide credit
files to consumers.
Apply for and open new credit accounts only as needed.
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.
DON'T:
Close unused credit cards as a short-term strategy to raise your score.
Open a number of new credit cards that you do not need, just to increase your available credit. This approach
could backfire and actually lower your score.
If you have been managing credit for a short time, do not 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 do not have a lot of
other credit information. Also, rapid account build-up can look risky if you are a new credit user. Do your rate
shopping for a given loan within a focused period of time. FICO® 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.
If derogatory information is removed, will my score increase...
It depends. It is impossible to say how important any single factor or new information is in determining your score because
the importance of each factor depends on the overall information in your credit report. What is important in scoring is the
mix of information, which varies from person to person and for any one person over time.
For some people, a given factor may be more important than for someone else with a different credit history. In addition,
as the information in your credit report changes, so does the importance of any factor in determining your score. Some
helpful tips are:
If there is inaccurate derogatory information on your credit report, get it corrected.
The score evaluates derogatory information in several ways - how often, how recent and how severe. If you
have a pattern (e.g. several derogatory items and late payments) of this type of behavior, removing one of these
may not impact the score very much.
Paying off a derogatory item such as a collection or charged off account will NOT remove that item from your
report. The fact that it happened is still important and evaluated by lenders and by the score.
Be aware that:
Paying off a collection account, late pay or derogatory item will not remove it from your credit file. It will stay on
your file for seven years along with any dollar amount associated with the past due.
Closing an account does not remove it from your credit file. A closed account will still show up on your credit file,
and may be considered in calculating your score.
Will I be penalized for shopping around for the best rate...
Looking for new credit can equate with higher risk, but most credit scores are not affected by multiple inquiries for your
credit score from auto or mortgage lenders within a short period of time. The BEACON® FICO® score treats these as a
single inquiry, which will have little or no impact on your credit score.
This is how it works. The BEACON® FICO® score ignores all auto- or mortgage-related inquiries that occur within the
30-day period previous to an inquiry from an auto or mortgage lender (called the "buffer" period). And prior to that buffer
period, the scoring software also notes when earlier inquiries were made - if any - and counts back 14 days from each
one. The score then counts all auto- or mortgage-related inquires made within any 14-day period as just one inquiry.
For example: John Doe is shopping for a mortgage loan and a lender gets his credit report on November 30. Johns credit
report also lists three other mortgage inquiries that were made earlier that month. The FICO® score ignores those previous
mortgage inquiries because they all fell into the 30-day buffer period.
Now let us say that John also purchased a car three months before he began shopping for a mortgage loan. His car
shopping resulted in three inquiries from different banks and credit unions over several days. Since they occurred within
the same 14-day period, those three inquiries are counted as just one inquiry by the FICO® score.
I HOPE THIS HELPS....
...as always,
GoodInvesting, Rocky
[ Edited by 2000rock on Date 07/04/2003 ]
wow, very helpful info. Great post.
thanks.
[addsig]
Quote:
, are also considered negative by the FICO score. Typically, late
On 2003-07-04 14:06, 2000rock wrote:
Everything you always wanted to know about FICO...
....per Equifax:
Personal Information.....
The following personal information has been reported to Equifax by your creditors. None of your personal
information is used in determining your FICO score. In addition, most lenders do not rely this information for
loan review. They will collect it from you directly, on a loan application.
Derogatory Public Records...
FICO scores consider the following public record information as negative: bankruptcy, foreclosure, garnishments, legal items and tax liens. This
information is collected by the Credit Reporting Agency and stored on your file.
Collections...
A collection happens when your creditor has turned over your account where you have not paid as agreed to a collection agency. FICO scores consider
collections to be negative.
Delinquencies and Derogatory information on accounts...
Delinquency information is provided by the lender when you have missed a payment on your credit obligation. Other derogatory indicators, such as a
comment with the credit obligation (for example, "account included in bankruptcy"
payment information on your credit obligations is reported by the lender as 30 days, 60 days, 90 days, 120 days, 150 days, 180 days late or as a
charged-off account.
Inquiries...
An inquiry is a notation on your credit report showing what entities (usually lenders) have requested to view your report. Your credit report includes two
types of inquiries:
Involuntary inquires: such as when lenders check to see which consumers may qualify for their pre-approved credit offer in the mail or the inquiry
posted for this Score Power request. The FICO score does not consider these types of inquiries and lenders do not see these types either when
accessing your credit report.
Voluntary inquiries: spurred by your own requests for credit, such as when you apply for a loan, you authorize your lender to ask for a copy of
your credit report.
FICO scores only consider voluntary inquiries initiated by you (when you were seeking credit) over the most recent 12-month period. These include
mortgage, credit card, auto loan and other requests for credit you may have made. FICO scores are engineered so that your score is not lowered from the
multiple inquiries that may occur when you shop for the best auto or home loan.
A single inquiry will usually have little impact on your score.
Range of BEACON® FICO® scores...
BEACON® FICO® scores can range from 300 to 850, but the majority of scores usually fall within the 600s and 700s.
Since there is no one universal "score cutoff" used by all lenders, it is hard to say what a good score is outside the
context of a particular lending decision. For example, a score of 750 may qualify you for a platinum credit card, whereas a
score of 675 may indicate you're a better match for a standard card.
Your lender may be able to give you guidance on the criteria that it uses for a given credit product. Based on the general
population's BEACON® FICO® scores, the ranges and percentages of scores are:
20% are above
780
20% are in the range
745-780
20% are in the range
690-745
20% are in the range
620-690
20% are below
619
While many lenders use BEACON® FICO® scores to help them make lending decisions, each lender has its own strategy,
including the level of risk it finds acceptable for a given credit product.
What types of information are used in calculating my BEACON® FICO® score...
The BEACON® FICO® score evaluates five main categories of information. Listed from most important to least important,
these are:
1.Payment History - Approximately 35% of your score is based on this category.
Payment information on accounts such as Visa, MasterCard, American Express and Discover; retail
department store accounts; installment loans; finance company accounts and mortgage loans.
Public record and collection items such as bankruptcies, foreclosures, wage attachments, liens,
judgments and delinquencies reported to collection agencies.
Details on late or missed payments (delinquencies) and public record and collection items, specifically
focusing on how late they were, how much was owed and the recency and frequency of the
occurrence.
How many accounts show no late payments.
2.Amounts Owed - Approximately 30% of your score is based on this category.
The amount owed on all accounts.
The amount owed on different types of accounts.
Whether you are showing a balance on certain type of accounts.
The number of accounts with balances.
How much of the total credit line is being used on credit cards and other revolving credit accounts.
How much of the installment loan accounts is still owed, compared with the original loan amounts.
3.Length of Credit History - Approximately 15% of your score is based on this category.
How long your credit accounts have been established. The score considers both the age of your oldest
account and an average age of all your accounts.
How long specific credit accounts have been established.
How long it has been since you used certain accounts.
****Must Reach Freshman Investor status before posting URL's***w Credit - Approximately 10% of your score is based on this category.
How many new accounts you have.
How long it has been since you opened a new account.
How many recent requests for credit you have made, as indicated by inquiries to credit reporting
agencies in connection with transactions initiated by you. The score does not take into account requests
a creditor has made for your credit file or score in order to make a pre-approved credit offer, or to review
your account with them, nor does it take into account your request for a copy of the credit file.
Length of time since creditors made credit file inquiries.
Whether you have a good recent credit history, following past payment problems.
****Must Reach Freshman Investor status before posting URL's***ype of credit use - Approximately 10% of your score is based on this category.
What kinds of credit accounts you have and how many of each.
What types of information are NOT used in calculating my BEACON® FICO® score...
Your race, color, religion, national origin, sex or marital status
Your age
Your salary, occupation, title, employer, date employed or employment history
Where you live
Certain types of inquiries such as promotional, account review, insurance or employment related inquiries
Any information not found in your credit file
Any information that is not proven to be a predictive of future credit performance.
How do I interpret my BEACON® FICO® score...
The BEACON® FICO® score is accompanied by up to four reason codes that explain the top reasons why your score is
not higher. These score reason codes are more useful than the score itself in helping you determine how you might
improve your score over time. However, if you already have a high score (for example, in the mid 700s or higher) some of
the reasons may not be very helpful, as they may be marginal factors related to the last three categories described
previously (length of credit history, new credit and types of credit in use.)
What are the most common score reason codes...
Serious delinquency.
Serious delinquency, and public record or collection field.
Time since delinquency is too recent or unknown.
Level of delinquency on accounts is too high.
Number of accounts with delinquency is too high.
Amount owed too high on accounts.
Ratio of balances to credit limits on revolving accounts is too high..
Length of time accounts has been established is too short.
Too many accounts with balances.
How often does my score change...
Your credit file is continually updated with new information from your creditors. The BEACON® FICO® score is calculated
based on the latest "snapshot" of information contained in your file at the time the score is requested. Therefore, your
BEACON® FICO® score from a month ago is probably not the same score a lender would get from the credit-reporting
agency today. Fluctuations of a few points from month to month are quite common.
Why are my scores different...
There are several reasons for variation of credit scores. Firstly, there are other credit reporting agency scores, although
BEACON® FICO® scores are by far the most commonly used. Other credit scores may evaluate your credit file differently
than the BEACON® FICO® score, and in some cases a higher score may mean more risk, not less risk as with BEACON®
FICO® scores.
Secondly, many lenders use their own scores, which often will include the BEACON® FICO® score as well as other
information about you.
Finally, your score may be different at each of the three main credit-reporting agencies as the FICO® score only considers
the data in your credit file from that agency. If your score from the three credit reporting agencies is different, it is
probably because the information those agencies have on you differs.
How can I improve my score...
Here are some suggested tips to follow:
DO:
Pay your bills on time. Delinquent payments and collections can have a major negative impact on your score.
If you have missed payments, get current and stay current. The longer you pay your bills on time, the better your
score.
If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor. This will
not improve your score immediately, but if you can begin to manage your credit and pay on time, your score will
get better over time.
Keep balances low on credit cards and other revolving credit. High outstanding debt can affect a score.
Pay off debt rather than move it around.
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.
Note that it is OK to request and check your own credit file. This will not affect your score, as long as you order
your credit file directly from the credit-reporting agency or through an organization authorized to provide credit
files to consumers.
Apply for and open new credit accounts only as needed.
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.
DON'T:
Close unused credit cards as a short-term strategy to raise your score.
Open a number of new credit cards that you do not need, just to increase your available credit. This approach
could backfire and actually lower your score.
If you have been managing credit for a short time, do not 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 do not have a lot of
other credit information. Also, rapid account build-up can look risky if you are a new credit user. Do your rate
shopping for a given loan within a focused period of time. FICO® 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.
If derogatory information is removed, will my score increase...
It depends. It is impossible to say how important any single factor or new information is in determining your score because
the importance of each factor depends on the overall information in your credit report. What is important in scoring is the
mix of information, which varies from person to person and for any one person over time.
For some people, a given factor may be more important than for someone else with a different credit history. In addition,
as the information in your credit report changes, so does the importance of any factor in determining your score. Some
helpful tips are:
If there is inaccurate derogatory information on your credit report, get it corrected.
The score evaluates derogatory information in several ways - how often, how recent and how severe. If you
have a pattern (e.g. several derogatory items and late payments) of this type of behavior, removing one of these
may not impact the score very much.
Paying off a derogatory item such as a collection or charged off account will NOT remove that item from your
report. The fact that it happened is still important and evaluated by lenders and by the score.
Be aware that:
Paying off a collection account, late pay or derogatory item will not remove it from your credit file. It will stay on
your file for seven years along with any dollar amount associated with the past due.
Closing an account does not remove it from your credit file. A closed account will still show up on your credit file,
and may be considered in calculating your score.
Will I be penalized for shopping around for the best rate...
Looking for new credit can equate with higher risk, but most credit scores are not affected by multiple inquiries for your
credit score from auto or mortgage lenders within a short period of time. The BEACON® FICO® score treats these as a
single inquiry, which will have little or no impact on your credit score.
This is how it works. The BEACON® FICO® score ignores all auto- or mortgage-related inquiries that occur within the
30-day period previous to an inquiry from an auto or mortgage lender (called the "buffer" period). And prior to that buffer
period, the scoring software also notes when earlier inquiries were made - if any - and counts back 14 days from each
one. The score then counts all auto- or mortgage-related inquires made within any 14-day period as just one inquiry.
For example: John Doe is shopping for a mortgage loan and a lender gets his credit report on November 30. Johns credit
report also lists three other mortgage inquiries that were made earlier that month. The FICO® score ignores those previous
mortgage inquiries because they all fell into the 30-day buffer period.
Now let us say that John also purchased a car three months before he began shopping for a mortgage loan. His car
shopping resulted in three inquiries from different banks and credit unions over several days. Since they occurred within
the same 14-day period, those three inquiries are counted as just one inquiry by the FICO® score.
I HOPE THIS HELPS....
...as always,
GoodInvesting, Rocky
<font size=-1>[ Edited by 2000rock on Date 07/04/2003 ]</font>
Thanks this was perfect The very best reply
Thanks this was the best answer yet You cleared up every question I had about credit