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 wildstorm_films
Joined: 22 Aug 2007
Posts: 131
8.66 Dollars($)
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 Posted: Thu Sep 06, 2007 8:35 pm Post subject: Question about credit inquiries |
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| Why is it that when a lender or whatever pulls your credit, it can lower your credit score? I believe that if a lender or whatever pulls your credit, the inquiries shouldn't even effect the credit score to be honest with ya. |
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sara
Joined: 05 Jul 2006
Posts: 1168
Location: New Brunswick, New Jersey
216.67 Dollars($)
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| Posted: Thu Sep 06, 2007 9:12 pm Post subject: RE: why inquiries affect score |
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That's because too much of credit inquiries and pulling of the credit report gives the impression that the borrower isn't getting qualified for a loan. So, may be he isn't that creditworthy or hasn't been able to manage his credit well in the past. That's the reason why the score goes down. But there's a time period within which the score isn't affected due to multiple inquiries.
Take Care |
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larry
Joined: 27 Jun 2007
Posts: 3328
473.40 Dollars($)
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| Posted: Thu Sep 06, 2007 9:17 pm Post subject: |
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Hi Wildstorm,
As far as I know, checking the credit report does not affect your credit score. Otherwise, most people would have a very low score. |
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Rosetta
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0.10 Dollars($)
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| Posted: Thu Sep 06, 2007 10:55 pm Post subject: |
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Hi Wildstorm,
If multiple inquiries are made within a shorter period of time, it will not affect your credit score much. The score will count on inquiries made within a period of 14 days. The inquiries of these 14 days will be treated as a single inquiry. And thus it will have a little impact on your credit score. |
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miller_st
Joined: 17 Jan 2007
Posts: 917
168.82 Dollars($)
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| Posted: Fri Sep 07, 2007 5:58 pm Post subject: |
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| Quote: | | Why is it that when a lender or whatever pulls your credit, it can lower your credit score? I believe that if a lender or whatever pulls your credit, the inquiries shouldn't even effect the credit score to be honest with ya. |
Inquiries really don't have too much affect on our score and as rosetta said if you shop for credit within a certain period of time, it would be even better.
Miller |
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wildstorm_films
Joined: 22 Aug 2007
Posts: 131
8.66 Dollars($)
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| Posted: Sun Sep 09, 2007 12:46 pm Post subject: |
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| Can lenders or brokers charge a fee to pull your credit report? Because I'm dealing with one person that maybe can get something done for me but he says he has to pull my credit but its going to cost me $15 to do so. Of all the lenders and brokers that I have dealt with, he's the only one that has a fee for pulling my credit. |
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livinginnky
Moderator
Joined: 08 Sep 2007
Posts: 596
23.69 Dollars($)
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| Posted: Sun Sep 09, 2007 1:37 pm Post subject: |
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This is a real world situation and here is how and why it affects your score.
Picture this scenario in 2 ways -
1. Customer is attempting to purchase a car. He is obviously going to shop around and find the best deal, right? He goes to 20 different dealerships and decides on the car he wants. He buys the car and finances it through the lender of his choice. His credit score drops because he just took on a new loan, it doesn't change drastically though. It will go back up over time as he makes the payments. His credit score doesn't really go down because of the inquiries in this situation this is an urban legend more than anything else to discourage customers from shopping around.
2. Now different customer does the same thing. Difference is this customer is not shopping prices he is just trying to find someone that can help him. He goes to 20 dealers and never gets approved. His score will drop because after all those inquiries all coming from automotive lenders, he never buys a car and never gets a new account on his credit bureau. Credit scoring algorithms see this as just another negative item. But again we are not talking hundreds of points. We are talking about 5-30 points.
So in both situations the credit goes down. The difference is the guy with good credit, score goes up as he builds better credit, and the guy with bad credit continues to have bad credit.
So as you said the inquiries shouldn't and don't actually effect the score. The lenders actions are what affect the score, which is really why we have credit scores. So that lenders could have a way to communicate the credit risk of each borrower in a universal way without actually having to talk to one another.
Any lender has the right to charge you for the report as they have to pay for it in the first place. If I know a customer is in bad shape and they just want me to help them with their credit I have no problem doing so as long as they pay for it. Think about it, you want someone to help you with your credit report and they would have to pay for it. Now if it is just to pull it and that is it, no help with issues or inaccuracies, then why pay for it anyway. You already have a good idea of what it says. |
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wildstorm_films
Joined: 22 Aug 2007
Posts: 131
8.66 Dollars($)
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| Posted: Sun Sep 09, 2007 7:44 pm Post subject: |
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| Quote: | This is a real world situation and here is how and why it affects your score.
Picture this scenario in 2 ways -
1. Customer is attempting to purchase a car. He is obviously going to shop around and find the best deal, right? He goes to 20 different dealerships and decides on the car he wants. He buys the car and finances it through the lender of his choice. His credit score drops because he just took on a new loan, it doesn't change drastically though. It will go back up over time as he makes the payments. His credit score doesn't really go down because of the inquiries in this situation this is an urban legend more than anything else to discourage customers from shopping around.
2. Now different customer does the same thing. Difference is this customer is not shopping prices he is just trying to find someone that can help him. He goes to 20 dealers and never gets approved. His score will drop because after all those inquiries all coming from automotive lenders, he never buys a car and never gets a new account on his credit bureau. Credit scoring algorithms see this as just another negative item. But again we are not talking hundreds of points. We are talking about 5-30 points.
So in both situations the credit goes down. The difference is the guy with good credit, score goes up as he builds better credit, and the guy with bad credit continues to have bad credit.
So as you said the inquiries shouldn't and don't actually effect the score. The lenders actions are what affect the score, which is really why we have credit scores. So that lenders could have a way to communicate the credit risk of each borrower in a universal way without actually having to talk to one another.
Any lender has the right to charge you for the report as they have to pay for it in the first place. If I know a customer is in bad shape and they just want me to help them with their credit I have no problem doing so as long as they pay for it. Think about it, you want someone to help you with your credit report and they would have to pay for it. Now if it is just to pull it and that is it, no help with issues or inaccuracies, then why pay for it anyway. You already have a good idea of what it says. |
Well I think that any type of fee should be taken out of a loan. Not upfront. Thats how I look at it and I base that on my previous experience with other lenders. |
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livinginnky
Moderator
Joined: 08 Sep 2007
Posts: 596
23.69 Dollars($)
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| Posted: Mon Sep 10, 2007 10:46 am Post subject: |
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| Quote: | | Well I think that any type of fee should be taken out of a loan. Not upfront. Thats how I look at it and I base that on my previous experience with other lenders. |
I actually agree with you on that one. But I think you are misunderstanding me. I was simply stating they had the right to charge. And after I was referring to credit repair services not application fees. These are from days of old and I believe any more that if someone wants to charge for credit and applications then that is probably the money that there business is created to make. Like they only take apps, not do loans. If one LO charged 50 people per day $15. And the report cost them $6. Then that is $450 profit every day. It is a tactic typically used by unsuccesful mortgage companies who don't want to take the time to actually help people. |
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Max
Guest
0.10 Dollars($)
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| Posted: Tue Sep 11, 2007 3:04 am Post subject: |
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Hi Wildstorm,
Why will you pay fee to this lender for pulling your credit? Earlier as you have not paid any lender such fees for pulling your credit, then you should not pay him now. It is better to avoid him. |
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Niicss
Joined: 03 Oct 2005
Posts: 1047
156.17 Dollars($)
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| Posted: Wed Sep 12, 2007 12:20 pm Post subject: |
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Max,
| Quote: | | Why will you pay fee to this lender for pulling your credit? Earlier as you have not paid any lender such fees for pulling your credit, then you should not pay him now. It is better to avoid him. |
It might be that this lender is offering better rates because of which Wildstorm got interested in applying for mortgage with him.
_________________
Good is the Enemy of Great. |
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wildstorm_films
Joined: 22 Aug 2007
Posts: 131
8.66 Dollars($)
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| Posted: Thu Sep 20, 2007 8:54 pm Post subject: |
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| Quote: | | I actually agree with you on that one. But I think you are misunderstanding me. I was simply stating they had the right to charge. And after I was referring to credit repair services not application fees. These are from days of old and I believe any more that if someone wants to charge for credit and applications then that is probably the money that there business is created to make. Like they only take apps, not do loans. If one LO charged 50 people per day $15. And the report cost them $6. Then that is $450 profit every day. It is a tactic typically used by unsuccesful mortgage companies who don't want to take the time to actually help people. |
Its quite funny actually. The guy I was talking to forwarded me a link to check my credit (I can't remember what the link was but it was a legit site) and the fee was $15.00 for each credit bureau i.e., transunion, equifax and experian. Then after I forked over the $45.00 to check out all 3 reports he wanted me to email him my username and password to my credit report account.
1) I think thats illegal and 2) why fork over $45.00 to get all 3 credit scores when I can get a full credit report, with all 3 scores on it for under $12.00
Needless to say I'm not dealing with a lender/broker or whatever the heck he is who's asking me to forward my account details because its "against" company policy to do credit checks on customers. |
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livinginnky
Moderator
Joined: 08 Sep 2007
Posts: 596
23.69 Dollars($)
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| Posted: Fri Sep 21, 2007 4:28 pm Post subject: |
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Yeah really. If he wants you to show him your report from somewhere else that is insane. Why wouldn't you just get it from any of the many sites advertised these days.
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Eric Matthews
Mortgage Refinance and Home Loan Guide |
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