How is This Going to Affect My Credit?

Anytime you make a change in the status of one of your debt is will have an effect on what is reported on your credit report.

Asking the question “How Is This Going To Effect My Credit?” is critical. It is your credit at risk. Knowing the effect is a really good idea.

For instance applying for a mortgage whacks your credit score about 10 points. No big deal, unless you apply to 15 different places. Eventually you will get hurt because you credit score dropped 150 points since you started looking for a mortgage. At that rate you will eventually drive your score so low you won’t qualify at all.

That is the paradox in applying for credit. The act itself negatively affects your credit score. Even if you decide you don’t want the loan, your score will take a while to recover.

A “Hard Inquiry” for credit is made by a financial institution and is recorded on your report. A hard inquiry does not always impact your score, but it is always recorded and can be there for a couple years.

Even applying for a checking account can generate a hard inquiry.

The thing to do here is to ask questions of your prospective lender, get the details in your hand. Shop as many lenders as you like. Make a decision on who you actually want to do business with and THEN actually apply knowing there will be one hard inquiry.

If you are in doubt as to whether or now you will be approved, check your credit score yourself. There is no affect on your score when you check it.

Experian, Equifax or Trans Union are the big three credit reporting bureaus. You pretty much have to use one of them to get your credit scores.

You can get one annual credit report from It is the only truly free place you can get your free credit report. By law each of the credit bureaus have to provide you a copy of your credit report on request, you are allowed on report from each bureau per year. Your free report does not include the credit score. You can purchase the score from any of the credit bureaus. Each calculates scores differently. If you really need to know the scores you can get them that way.

Don’t be careless with your accounts. There are many things you can be cavalier about, holes in your socks, left your keys in your locked car etc. But when it comes to your money and how society views you the effects will last for years.

Hope that helps a little.

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