There are 3 types of inquiries to know about as you look over your credit report. It’s important to understand them and how they affect your credit scores because they can affect your credit scores very seriously. I have seen a couples credit scores drop over 120 points because of “shopping for credit” and not realizing their inquiries were costing them points.

The second type of inquiry is called a Soft Pull.  When you “shop for credit”, you are asking the sales people to pull your credit.  This is very dangerous as the more you have your credit pulled, the lower your score drops and it can be very significant.  The solution is to pull your own credit score and report from www.MyFICO.com and use that to shop with until you find the right loan for you then let them pull your credit scores. This way you can shop all day for as long as you like, months if you want and it won’t hurt your score one bit. When you pull your own credit scores it won’t cost you points either. That’s because it is called a soft pull. Soft pulls won’t cost you.

Anytime that you pull your own credit report or scores, the credit bureaus recognize that you are just looking over your own credit and it isn’t going to anyone that could use the report anyway so it is a soft pull and won’t cost points. Other companies can do a soft pull as well and see your credit and scores to be sure you still qualify for their special programs or offer you insurance rates, interest rates, etc. These inquiries can be in the hundreds and still not cost you any points.

Today is slightly different than usual but Eric Reque a consultant in the Atlanta area sent this to me a while back and I thought I’d share it with you …

This article was in Broker Universe today

Expert: Medical Collections Stopping Refi Opportunities

By Brad Finkelstein

PLANO, TX – According to a top producer of government mortgages, few borrowers are able to take advantage of the steep decline in interest rates, not just because of tighter lending standards and declining home values, but because of issues on their credit reports, specifically medical collections.

According to Rodney Anderson, executive director and senior managing partner of Rodney Anderson Lending Services here, 45% of the 1,701 loan applications he received between June and September 2008 had borrowers with at least one medical collection account. “In evaluating these loans, we uncovered a huge injustice against the American public,” says Mr. Anderson. “The tragedy is that the collection accounts, even those that have been paid in full, are lowering these individuals’ credit scores, often to the point that they either can’t qualify for a loan, or will have to pay higher interest rates if they do.”

He explains that medical collections are particularly problematic because of four main issues:

· Medical billing is a notoriously error-prone arena

· Many individuals with medical collection accounts never received the bill in question

· Medical collection accounts customarily remain on a credit report for seven years after the individual has settled or paid the account in full

· Medical collection accounts can reduce a credit score by as much as 100 points, sometimes more.

“Based on our extensive research, we can surmise that nearly half of Americans have at least one medical collection debt that’s lowering their credit score,” says Mr. Anderson, who uses analytical software to evaluate free credit reports and determine how borrowers can best improve their own credit scores. In doing so, he found that medical collection accounts are routinely reducing borrowers’ credit scores by 60 to 100 points or more. “This is disastrous news for loan applicants, especially since earlier this year Fannie Mae and Freddie Mac started requiring higher credit scores to qualify for loans, and loan servicers of FHA and VA loans have implemented additional credit score-based premiums,” he adds.

So he has initiated a petition to create a federal law mandating the permanent removal of a paid or settled medical collection account from the consumer’s credit report within 30 days of settlement.

“I’ve seen many hard working, conscientious individuals who diligently address their monthly obligations, but because they unwittingly incurred a medical collection account, are forced to settle for a mortgage rate that’s half a percent higher than if they’d never had that collection account,” adds Mr. Anderson. “That half point can translate into thousands of dollars in wasted money, and that’s only for a home loan. They can also expect higher rates for auto financing, credit cards and insurance. That’s a hard pill to swallow for the many individuals who were never notified of the initial billing and who have since paid the collection account in full. In this market, where interest rates and low home prices present the ideal time for buying, we need to make sure that individuals who deserve credit, get it.”

More information on the Credit 911 Medical Relief Bill is available at http://www.rodneyanderson.com/credit/medical_collections.php

Be Bold!

Herschel

There are 3 types of inquiries to know about as you look over your credit report. It’s important to understand them and how they affect your credit scores because they can affect your credit scores very seriously. I have seen a couples credit scores drop over 120 points because of “shopping for credit” and not realizing their inquiries were costing them points.

The first type of inquiry is one where you initiate the loan request. You fill out an application, or go to a store and they offer to sign you up for a store credit card processing and then will give you 10% or 20% or more off of your first purchase with them. Each of these is a hard pull inquiry and if more than 2 in a year will start to cost you points. There are many ways you might have a hard pull inquiry and not realize you are getting one. You might go into a auto dealership and ask about the financing of a car. Be sure that if they ask for your social security number, that they are going to pull your credit even if you don’t ask for them to do so… they will assume that since you gave them your social security number, that you authorized them to pull your credit. Boom, you just had a hard inquiry pull.

It’s not bad if that is what you wanted, but what if you go and look at autos from several dealerships and each pulls your credit? You just got hit with a hard inquiry from each dealership and your scores will be dropping as you go along.

There is an exception, as there always is… On the inquiry there is a place to put the type of inquiry that is being pulled. If the auto dealership, mortgage company, bank, credit union, etc, where you are applying for a loan fails to put the type of inquiry onto the inquiry pull, then this is where each credit pull will cost your credit score points. Another challenge to face is the type of scoring module they are using when pulling your credit. Because the credit bureaus have over 19 different scoring modules to choose from and the dealership, loan company or bank can choose which scoring module they will pay for, then the combination of error can be endless and very costly to you. How do you know? You don’t… you can ask but they won’t know which scoring module they are using because it is usually decided by someone at corporate headquarters and they don’t tell the sales people and don’t care anyway.

There are several ways that your credit rating can be adversely affected.

Many times the items being reported to your credit bureau may be inaccurate. To help consumers protect their credit bureau reports, there are federal laws that can help in disputing negative items and restoring a consumer’s good name. Two of these laws are The FCRA and FACTA.

The FCRA is short for the Fair Credit Reporting Act. The FCRA protects you as a consumer in the event erroneous information is placed on your report by holding the credit agencies responsible for reporting accurate information. The FCRA, passed in 1970, provides consumers with certain protections which include the ability to request a copy of your credit report, dispute negative items on your report, and notification if a removed item has been re-entered into a consumers report. The list I have provided is a few of many rights that a consumer has under The Fair Credit Reporting Act.  To take advantage the Fair Credit Reporting Act it is important to stay on top or your credit rating by monitoring your credit on a consistent basis.

FACTA also known as Fair and Accurate Credit Transaction Act holds credit organization responsible for the way a consumer’s information is handled. This law was put in place to curve the rise of identity theft. The guidelines set by FACTA ensure that certain documents such as personal information are shredded by any organization that handles sensitive personal information.  FACTA also allows consumers the right to receive at least one free credit report per year.  In some states like Georgia the limit is 2 free reports per year.

These two important acts were put in place to give consumers a course of action to take in the event their credit information is ever compromised.  Surprisingly many people are not aware of these laws place in the books to protect them. Taking advantage of FCRA and FACTA is as simple as getting a free copy of your credit report.  If you have been a victim of Identity fraud and or you are having trouble disputing items on your credit report, you may want to review these acts to understand your rights.  Another option is to hire a reputable credit attorney to work in your favor to take advantage of your rights under the guidelines of these laws.

Ignorance of the law is not an excuse, especially when the law was put in place to aid and assist you.  To minimize your risk and maximize your safety, you should educate yourself on the benefits of the FCRA and FACTA.  It is also a wise decision to keep some form of identity protection and credit monitoring service.