Get Free T-Shirts, Lower Your Credit Score

[BPSCG]

Just one more reminder that if it's free, you probably can't afford it. (http://blog.washingtonpost.com/rawfisher/2006/04/warning_free_tshirts_will_cost.html)

[Upchurch]

Just one more reminder that if it's free, you probably can't afford it. (http://blog.washingtonpost.com/rawfisher/2006/04/warning_free_tshirts_will_cost.html)
What an idiot. He didn't know that running multiple credit checks lowers your score?

[Random]

I’m surprised that any of those sidewalk guys are legitimate in the first place. I always figured that they were scammers trying to get your private info for the purposes of identity theft. Always steered clear of them.

[Bindamel]

The problem may not be with his credit score, but with his insurance company.

Yes, credit inquiries lower your credit score a small amount. Newly opened accounts can lower them even more.

I found out from my insurance agent last year that I don't qualify for their best rate, even though my credit score is over 800 (scale is 350 to 850). I did not qualify for best rates because one of the credit bureau comments was "too many open accounts".

The funny (sad?) thing is, if I closed some accounts that I don't use, it would lower my credit score, because my debt to credit ratio would go up.

There are a lot of good resources around on how to improve your credit, and for some people, signing up for new cards can improve credit scores, because of the decreased debt to credit ratio.

[a_unique_person]

I worked for an insurance company that used a very complex algorithm to work out premiums for motor vehicles. There was a lot of surprise when the premium for a moter cyclist came out at something like ten thousand dollars. When they went through the logic, that was the correct answer.

[Bjorn]

What an idiot. He didn't know that running multiple credit checks lowers your score?After 5 years here I'm still an amateur when it comes to US and financing, but here's my question:

Since life moves on, I had my credit checked last year. The scores were above 700, which I was told was good, or OK, whatever ... at least an improvement from arriving here in 2001 with "no" credit score. Not a bad one, just "no" score.

Now, I see TV ads all the time urging me to check the scores every so often "just in case", "identity theft", "good to know if you need credit" and so on. Are these ads actually encouraging me to lower my own credit score by teasing me to find out about it?

[Mycroft]

Now, I see TV ads all the time urging me to check the scores every so often "just in case", "identity theft", "good to know if you need credit" and so on. Are these ads actually encouraging me to lower my own credit score by teasing me to find out about it?

Two things:

First, it's not exactly true that credit inquiries lower your credit score. What happens is too many credit inquiries will lower your score.

The reasoning is that normal people don’t apply for new credit every day, and if you’re suddenly looking for a lot of new credit within a short period of time, it may indicate something is happening with you that makes you a high risk. Maybe you’ve gotten into trouble and are looking to borrow your way out, or maybe you’ve become the victim of identity theft. While a lot of inquiries within a short period of time will lower your score, the damage will also go away fairly quickly. Within three or four months anyone reading your report will be able to see what new credit was granted and what you did with it.

People obsess over credit inquiries and they really shouldn’t. Of all the factors that go into the score, it’s given the least weight and its effect goes away the fastest. The big issues are payment history, debt utilization ratios, and judgments.

Second, and more directly to your question, there are different types of inquiry. A “soft” or “silent” inquiry is made when your credit report is checked for purposes other than you seeking credit. This includes activity such as you checking your own credit report, insurance, employment or marketing. These types of inquiry only show up on reports your request yourself, and are not figured into your score. It’s only when you authorize a credit check for a credit application that a “hard” inquiry is generated.

I hope this answers some of your questions. Feel free to ask if you have more questions or need clarification.

[Bjorn]

Two things:

First, it's not exactly true that credit inquiries lower your credit score. What happens is too many credit inquiries will lower your score.

The reasoning is that normal people don’t apply for new credit every day, and if you’re suddenly looking for a lot of new credit within a short period of time, it may indicate something is happening with you that makes you a high risk. Maybe you’ve gotten into trouble and are looking to borrow your way out, or maybe you’ve become the victim of identity theft. While a lot of inquiries within a short period of time will lower your score, the damage will also go away fairly quickly. Within three or four months anyone reading your report will be able to see what new credit was granted and what you did with it.

People obsess over credit inquiries and they really shouldn’t. Of all the factors that go into the score, it’s given the least weight and its effect goes away the fastest. The big issues are payment history, debt utilization ratios, and judgments.

Second, and more directly to your question, there are different types of inquiry. A “soft” or “silent” inquiry is made when your credit report is checked for purposes other than you seeking credit. This includes activity such as you checking your own credit report, insurance, employment or marketing. These types of inquiry only show up on reports your request yourself, and are not figured into your score. It’s only when you authorize a credit check for a credit application that a “hard” inquiry is generated.

I hope this answers some of your questions. Feel free to ask if you have more questions or need clarification.Thanks Mycroft - I assume I can safely use the "once-a-year-free" offer to get my scores without influencing them, but applying for a yacht loan three-four different places would hurt my credit score even if I (read: my wife) decided not to buy a yacht after all?

[kalen]

I know a guy in town who lends out money every once in a while. His method of a credit check involves him checking to see if your kneecaps haven't been broken yet.

[Mycroft]

Thanks Mycroft - I assume I can safely use the "once-a-year-free" offer to get my scores without influencing them, but applying for a yacht loan three-four different places would hurt my credit score even if I (read: my wife) decided not to buy a yacht after all?

Yes, the once a year free offer doesn't do a thing. There are even services that allow you to pull your own credit report as many times as you like (which may be good for people who are trying to repair their credit) so you could pull a new report every day, but because you're the one doing it none of the inquiries will count.

A yacht loan? I don't know about that, but when shopping for cars and mortgages the rule is multiple inquiries within 14 days only count as one inquiry. The reason? It's common for people to shop their credit for big purchases, that's not unusual, but when the deal is done you're only going to buy one car or one house.

I don't know anything about yacht financing. :)