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HomeCredit ForumCredit repair

Effects of opening new credit card

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anthony

anthony

Joined: 31 Jul 2006
anthony's page
Posts: 493



12319 Magic Points
 
 Posted on Wed Sep 03, 2008 2:43 am  
Hi fireyone
As far as I know, it is not true that higher is your credit score the higher will be the fall in score if there is hard inquiry in your credit report. A hard inquiry reduces credit score by at the most 5 points. Now since applying for new credit constitutes 10% in your credit score and the FICO score ranges from 300 to 850 points, the maximum fall in credit score can be 85 points. Now, this happens only if there is multiple hard inquiries in your report (around 17 to 18 ) and not for a single hard inquiry.
_________________
Anthony Marx

A positive attitude is not achieved by turning a blind eye to the negative, but rather by responding to every situation in the most positive way possible.
You can also visit my blog
http://financewatchonline.blogspot.com
 
Guest







 
 Posted on Wed Sep 03, 2008 3:30 am  
If a hard inquiry is made in my credit report, how do I know whether it is authorized or not.
 
Justin

Justin

Joined: 17 Jul 2006
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Posts: 417



10874 Magic Points
 
 Posted on Wed Sep 03, 2008 3:39 am  
Whenever you apply for a new credit, you automatically authorize the creditor to make a hard inquiry in your report. In other words, signing a credit application authorizes the creditor to pull out your report. Each such credit pull may lower your score by as much as 5 to 10 points normally. However, there are instances when the creditor makes hard inquiry even if you have not applied for a new credit. This happens basically when you are offered a new credit card even if you have not applied for the same. The credit card company pulls out your report, verifies it and then offers you a new card. These unauthorized hard inquiries can be removed from your credit report.
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Justin
 
1002543



Joined: 31 Aug 2008
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Posts: 84



96 Magic Points
 
 Posted on Wed Sep 03, 2008 11:40 am  
Again, Anthony, I have to disagree wit you. I personally lost more than 5 points for hard inq.
 
anthony

anthony

Joined: 31 Jul 2006
anthony's page
Posts: 493



12319 Magic Points
 
 Posted on Thu Sep 04, 2008 7:01 am  
Hi 1002543
Normally, the credit score falls by 5 points due to a hard inquiry, but, I have also come across instances where credit score due to a hard inquiry has fallen by even 10 points. I think it happens when you owe large amounts of debt to creditors and credit card companies when you are applying for a loan. But if you have a good score, I don't think that your credit score would fall too much due to a hard inquiry.
_________________
Anthony Marx

A positive attitude is not achieved by turning a blind eye to the negative, but rather by responding to every situation in the most positive way possible.
You can also visit my blog
http://financewatchonline.blogspot.com
 
fireyone



Joined: 26 Feb 2008
fireyone's page
Posts: 2858



1966 Magic Points
 
 Posted on Thu Sep 04, 2008 11:52 am  
Wonder if this is why? I heard on another post also that the higher your score the bigger the hit. That really surprised me. I would think it would be the opposite.
 
1002543



Joined: 31 Aug 2008
1002543's page
Posts: 84



96 Magic Points
 
 Posted on Fri Sep 05, 2008 12:33 am  
Anthony!
IME, my score fell 13 pt due to inq. And please I never carry balances more than 1% of available credit.
Amount of points depends on on your score, how many inq.'s one has on his/hers file (when it is first inq usally it is 0 pt. lost) and credit bucket.
 
fireyone



Joined: 26 Feb 2008
fireyone's page
Posts: 2858



1966 Magic Points
 
 Posted on Fri Sep 05, 2008 12:34 am  
Wow 13 points..that was quite a hit wasn't it!!!???
 
goodnatured



Joined: 03 Nov 2007
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Posts: 3137



5332 Magic Points
 
 Posted on Fri Sep 05, 2008 2:43 am  
wow, that seems like a lot. All those points just for someone poking their nose into your financial business, that stinks.
_________________
Goodnatured,

Trying to become and stay debt free, thank you for all your help and support!
 
anthony

anthony

Joined: 31 Jul 2006
anthony's page
Posts: 493



12319 Magic Points
 
 Posted on Fri Sep 05, 2008 5:59 am  
Thanks 1002543 for the explanation and I really appreciate you explanation on the factors affecting the score due to a hard inquiry. The explanation that I gave was based on the knowledge which I gathered while going through the web.
_________________
Anthony Marx

A positive attitude is not achieved by turning a blind eye to the negative, but rather by responding to every situation in the most positive way possible.
You can also visit my blog
http://financewatchonline.blogspot.com
 
1002543



Joined: 31 Aug 2008
1002543's page
Posts: 84



96 Magic Points
 
 Posted on Fri Sep 05, 2008 1:12 pm  
As the matter of fact all this "explanations" are nothing more than speculation built on on observation, personal experience and reading. Only Fair Isaac knows the exact answere but they will never reveal it.
 
goodnatured



Joined: 03 Nov 2007
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Posts: 3137



5332 Magic Points
 
 Posted on Sat Sep 06, 2008 2:10 am  
I agree, but I think the whole credit reporting deal needs to be revamped, especially for those that have paid the old bills off, either they remove them or have a shorter term that they are on the report.
_________________
Goodnatured,

Trying to become and stay debt free, thank you for all your help and support!
 
fireyone



Joined: 26 Feb 2008
fireyone's page
Posts: 2858



1966 Magic Points
 
 Posted on Sat Sep 06, 2008 2:12 am  
I could not agree more. the credit system does seem quite unfair to honest people trying to make right with past bills.
 
1002543



Joined: 31 Aug 2008
1002543's page
Posts: 84



96 Magic Points
 
 Posted on Sat Sep 06, 2008 2:27 am  
Let say you lent money to your neighbour, $1000 for 10 mos, $100/mos and he returned money but paid it as $40/mos which took 25 mos instead of 10. For how long are you going to remember it and when you lend him money next time, in 1 year, in 7 years or never again?
 
fireyone



Joined: 26 Feb 2008
fireyone's page
Posts: 2858



1966 Magic Points
 
 Posted on Sat Sep 06, 2008 3:08 am  
Good point you make here 1002 what are all those numbers for anyway? I am curious.
 
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