For every one who want a helping hand to fulfill the wonderful dreams,getting credit for them is important.This task like a easy mortgage at lower interest rate or auto loan can be obtained only with a good credit score.When you start thinking about making your FICO score better,You do come across many people or companies start giving you advice like this and that.At times it happens like,they may guide you in a wrong way and it leads to the loss of valuable score.This post is for you who are having the problems and would like to know about this kind of misconceptions.The previous post deals with the misconception of Closing Accounts Improve Credit Score.
Let us talk about other wrong assumptions and the real truths.
1.Lowering Credit Limit Boosts my FICO Score :
The idea is it make your profile less risky.As the lenders need to give you less money,they feel it is OK to do the favor of accepting your loan application.It is a bad idea actually.Lowering the limit reduce the available credit.There shall be good gap between available amount and used money.This make your profile less risky.The simple way to solve the problem is paying down the debit that you have.This increase the gap and betters your score.
2. Checking own account reduce the score :
It is like check your bank account,your balance will reduce.It is even ridiculous to say that checking your own report,has negative affect on it.You have a right to check it and you need to make sure that every thing present is correct.The federal government allows to take a free report once in a year from each agency.If you want to apply for new credit,you shall make sure that every thing is all right with your fico reports.You shall check them few months in advance and ask for corrections if needed.It takes time for the errors to be corrected and that is why you need to start preparing the ground bit early.
Enquirers generated by you are neglected the agencies and will not affect your score in any way.The truth is it is affected when your lenders pulls your report and not you.You shall not give that chance to the bankers or lenders unless it is needed.That means you shall apply for new line of credit only when it is needed.Every applied loan lead to a hard inquiry and reduce your score up to some extend.
3. Looking for a best deal reduce your three digit Score:
It is all right to search for a better auto or mortgage deal with lowest interest available in market.You can search for it approach different lenders for it.Let them inquire about you and this may not affect you.Multiple inquiries from different lenders about same kind of lenders with in a period of thirty days will be treated like only one hard inquiry.Any way you shall know that auto loan inquiry and mortgage one are not treated like same one inquiry and they are treated differently.So you shall finish the deal with in this thirty days period.
You need to do ground work for this like you shall know your score and identify the possible interest rate.Check the net sites and lenders online to get a rough idea.You shall have complete information before you approach the lenders.This makes your job easy and you can finish the deal with in the period and hence save your report and get the dream fulfilled.
You shall not give your credit or other financial deals to the lenders until you have decided the buy from them.They start pulling your records and it is needed when you are buying it.Though multiple inquiries on a single day are treated as one,the list in the report grow and looks annoying.
(Photo source : http://www.flickr.com/photos/littlesister/260512522/)
Once if a loan is rejected by some lenders because of the bad score reason,you shall first try to improve it.With out that if you keep applying for a new loan,it further affect your report.You shall first try paying the bills on time,paying the down payment of debit and getting a secured credit card to improve payment history.
4. Improve FICO Score by not using any Credit Available :
It is a wrong idea that you shall not use the credit and live with cash paying options.This is not going to impress your lender when you apply for a auto loan or mortgage loan.The report tells about you to the lender that how do you handle the credit problem and how well you pay back the monthly bills.If you have not taken any credit,you will not have any payment history and it is going to be a stumbling block for getting the expected loan offer.
It does not mean that you shall live in debit,but you shall use the available credit and create a page of history for you.Even if you have no interest in taking the loans,you shall take care about your three digit score.It is because even insurance companies look at your report to fix a new interest rate or premium.Better the score,less the premium.And the employee is also going to find about your fico report before taking a decision about a promotion or new appointment.
1.Lowering Credit Limit Boosts my FICO Score :
The idea is it make your profile less risky.As the lenders need to give you less money,they feel it is OK to do the favor of accepting your loan application.It is a bad idea actually.Lowering the limit reduce the available credit.There shall be good gap between available amount and used money.This make your profile less risky.The simple way to solve the problem is paying down the debit that you have.This increase the gap and betters your score.
2. Checking own account reduce the score :
It is like check your bank account,your balance will reduce.It is even ridiculous to say that checking your own report,has negative affect on it.You have a right to check it and you need to make sure that every thing present is correct.The federal government allows to take a free report once in a year from each agency.If you want to apply for new credit,you shall make sure that every thing is all right with your fico reports.You shall check them few months in advance and ask for corrections if needed.It takes time for the errors to be corrected and that is why you need to start preparing the ground bit early.
Enquirers generated by you are neglected the agencies and will not affect your score in any way.The truth is it is affected when your lenders pulls your report and not you.You shall not give that chance to the bankers or lenders unless it is needed.That means you shall apply for new line of credit only when it is needed.Every applied loan lead to a hard inquiry and reduce your score up to some extend.
3. Looking for a best deal reduce your three digit Score:
It is all right to search for a better auto or mortgage deal with lowest interest available in market.You can search for it approach different lenders for it.Let them inquire about you and this may not affect you.Multiple inquiries from different lenders about same kind of lenders with in a period of thirty days will be treated like only one hard inquiry.Any way you shall know that auto loan inquiry and mortgage one are not treated like same one inquiry and they are treated differently.So you shall finish the deal with in this thirty days period.
You need to do ground work for this like you shall know your score and identify the possible interest rate.Check the net sites and lenders online to get a rough idea.You shall have complete information before you approach the lenders.This makes your job easy and you can finish the deal with in the period and hence save your report and get the dream fulfilled.
You shall not give your credit or other financial deals to the lenders until you have decided the buy from them.They start pulling your records and it is needed when you are buying it.Though multiple inquiries on a single day are treated as one,the list in the report grow and looks annoying.
(Photo source : http://www.flickr.com/photos/littlesister/260512522/)Once if a loan is rejected by some lenders because of the bad score reason,you shall first try to improve it.With out that if you keep applying for a new loan,it further affect your report.You shall first try paying the bills on time,paying the down payment of debit and getting a secured credit card to improve payment history.
4. Improve FICO Score by not using any Credit Available :
It is a wrong idea that you shall not use the credit and live with cash paying options.This is not going to impress your lender when you apply for a auto loan or mortgage loan.The report tells about you to the lender that how do you handle the credit problem and how well you pay back the monthly bills.If you have not taken any credit,you will not have any payment history and it is going to be a stumbling block for getting the expected loan offer.
It does not mean that you shall live in debit,but you shall use the available credit and create a page of history for you.Even if you have no interest in taking the loans,you shall take care about your three digit score.It is because even insurance companies look at your report to fix a new interest rate or premium.Better the score,less the premium.And the employee is also going to find about your fico report before taking a decision about a promotion or new appointment.
Related Posts:
Negative affect of closing account on credit score
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