Free Instant Credit Reports – Score

Manshu Verma asked:




How does applying for a credit card hurt my credit score?

Every time you apply for a credit card, the credit card company makes an inquiry into your credit report. These are also known as hard pulls. Each of these credit inquiries or hard pulls, take away around 5 points from your credit score.

The rationale behind taking away points from your credit score when you apply for credit, is that, it is harder to control multiple lines of credit when compared to just a few. It also shows a tendency that leans towards getting excessive credit and then getting into a spending spiral, which may become difficult for you to get out of and as a result your chances of default become high.

These inquiries show on your credit report for a period of one to two years, but the dent in score itself will be rectified in about a couple of months, if you do not abuse your newly available credit.

If your credit application gets approved, then your score will rise fairly quickly because the additional line of credit will give you a boost. Along with this, your ‘debt is to available credit’ ratio will also improve and that will help boost your score too.

Be aware of the credit application spiral

The people who are worse hit are the people whose credit application gets rejected. When their application gets rejected, their score goes down. However, since their application has been rejected, they apply again thereby reducing their score further and chances are that they will get rejected once again. This is a vicious circle and if you get into this kind of thing four or five times, then your credit score takes a bigger hit.

So be careful, and next time you are tempted to apply for that store credit card that will give you $10 off on a new shirt, think twice!

Jessie

Bart Newman asked:




Why Is It Important to Purchase Credit Report?

Securing your own credit report copy is vital to improve your overall financial status. This will consequently gain its impact on various aspects of your financial activity such as securing loans, availing of loans with lower interest rates, and being required with minimal down payment to get a loan. Your credit score is represented by a 3-digit number and experts agree that a credit score of 660 is something that each individual should aim for if they want to secure a loan. With tougher financial conditions in the market, banks and other financial institutions are now more cautious than ever when it comes to approving loan applications.

It is therefore important to purchase credit report since it contains all your financial information, such as existing or past loans, payment history, any outstanding balance, and bank accounts that all impact how your credit score is calculated. You can get these reports from 3 credit agencies (CRAs) – Equifax, TransUnion, and Experian. Reports from these agencies can vary though and you have to clean credit up for all three if you wanted to boost your credit status.

Pay or Get Them Free?

Should you decide to get a copy of your report, there are several options available. The most common process is therefore to purchase credit report from companies online. Based on average cost for each report that stands at $16, you have to prepare an average of $48 to get all three report copies from the said companies.

There are options to get a free credit score though, such as through your credit card company or through your lender. However, all of the above options deprive you of the ability to view your score and clean it up for possible improvement.

Important Tips When You Purchase This Report

To learn more about how you can better understand the process of getting this report, here are some tips to keep in mind:

Prepare all your basic and financial information since credit report companies will be utilizing it for identity verification and checking your credit history. Each company has different formulas for calculating your score. Thus, it is important to not just settle for one.

Make sure to purchase credit report only from reputable credit reporting agencies and never settle for services you found through the internet unless you are sure that they are reliable and able to accurately provide your credit score.

Agnes