Credit Score FAQ Page

Find the best credit score faq. Get your answers to many frequently asked credit scores and credit repair questions.

Scan through the frequently asked questions below to see if your question is already answered. If not, click here and ask your question. I will try to answer questions within a day or two and your answer will be posted. You will receive an email when the question has been answered.

Credit Score FAQ: If I have too many unused credit cards. Why is it not a good idea to close these accounts, when I don’t have any balances in them?

ANSWER: Don't do it during the loan process. In fact, you shouldn't take any action that would have an adverse affect on your credit score once your loan package is sent to the lender for review.

Especially don't close cards that have balances remaining. This raises a red flag to the scoring system. It makes it appear that you many be in financial trouble. If you want to close some accounts after the loan process is completed, only close the newer credit card accounts. You'll keep the good points for credit history from the older cards.

Maybe you are just establishing credit (under two years). Then it's a good idea to have two to three credit cards and make all payments on time. This way you will have several trade lines on your credit report and will boost your credit history.

Credit Score FAQ: Why has the New Bankruptcy Law been put into place?

ANSWER: Credit card companies are the reason for the new law and they pushed hard for its passage. In this way they lock most consumers into their debt by forcing a payment plan instead of erasing it. Of course, people would and should pay for their purchases. But, in the past, sometimes when it became hard to do this you could declare bankruptcy to eliminate these debts. Now this has changed.

Because of the new law, it is of great importance that you completely understand there is no escape from your obligations. So you must avoid the circumstance of getting there in the first place.

Credit Score FAQ: When does the 14-day window for unlimited credit inquiries start?

ANSWER: You can have unlimited inquiries within a 14-day period, whether these inquiries are for a mortgage loan or auto loan. The 14-day timeframe starts when the first credit report is pulled. Any subsequent inquiries within 14 days will still only count as one hard inquiry.

Credit Score FAQ: Why don't I have a credit score?

ANSWER: Credit scoring cannot be generated without sufficient credit information. If you have little or no credit history, credit scores probably cannot be calculated. If you have never had a credit account, try applying for a retail, gas or secured credit card to begin your credit history.

Credit Score FAQ: Does the 14-day window close once the loan funds?

ANSWER: The 14-day window ends on the 14th day, regardless of what day the loan funded.

Credit Score FAQ: Does renting or leasing a home affect my credit score in any way?

ANSWER: Having a real estate loan that has always been paid on time shows lenders that you have established a strong credit base. This reflects positively on your credit responsibility. The fact that you’re renting or leasing a home does not decrease your credit scores. However, it generally means that your credit scores are not as high as they could be.

Credit Score FAQ: Why does student loan information appear more than once on the credit report?

ANSWER: Student loans are reported individually by enrollment periods, therefore, the loans cannot be combined and appear as separate entries in a credit report.

Credit Score FAQ: If my husband had bad credit before we were married, will that affect my credit score?

ANSWER: If you hold a joint credit account with your husband, these items could affect your score if they appear on your credit report. It's important to remember that joint account holders or authorized users credit actions does affect the other joint account holder or main account holder.

A credit account held solely in the name of your spouse, child or any other family member cannot impact your credit score. However, in community property states, all debt acquired during a marriage is considered a joint debt, regardless if the account is joint or in the name of an individual spouse.

Credit Score FAQ: How does divorce affect my credit?

ANSWER: When you obtained credit, you and your spouse signed a contract agreeing to pay your bills. A divorce decree doesn't change that contract. When you divorce, each of you remains fully liable for your debts. There are several ways you can prevent credit obligations from making divorce more difficult - and reestablish your own distinct credit lines after divorce occurs. You may wish to consider the following:

• Communicate with your ex-spouse. Make as clean a financial cut as possible.
• Communicate with your creditors. Decide which credit belongs to whom, then ask each company and bank that extended you credit to transfer the debt to the name of the person who will be responsible.
• During divorce negotiations, keep your joint bills current, even if you ultimately will have no responsibility for the debt. If you don't, your creditors could become more reluctant to release one party from joint liability.
• Ask the credit grantor to remove your spouse's name as an authorized user or close the joint account to additional charges.
• If your spouse runs up large amounts of debt, you should cancel as many of the accounts as possible. Inform all creditors, in writing, that you are not responsible for these debts. This may not prevent them from trying to collect, but it does show that you attempted to act responsibly.

Credit Score FAQ: How can an item be on your credit report twice?

ANSWER: Your credit report is a credit history. That history documents the life of a debt. As a result, it will show both the original lender and any subsequent collection accounts. However, they are not seen as two separate debts. Instead, a collection account is recognized as a continuation of the original debt.

The account you had with your bank should be listed as charged off. It could also show that it has been sold or transferred to a collection agency. Charged off, transferred or sold are considered a final status, essentially the same as closed. As a result, that account entry is no longer an active debt. However, it will continue to appear on your credit report to accurately reflect the account history.

Credit Score FAQ: Will I be penalized for shopping around for the best interest rate?

ANSWER: This is a very good question. Credit scores count every consumer-initiated credit application. Therefore, excessive applications for credit can adversely affect a score. However, it is becoming more common for risk score models to recognize when you are shopping for the best rates. So they either ignore inquiries for a specific purpose within a period of time, or count multiple inquiries for a specific purpose as only one. This is most common in mortgage and auto lending. In such cases, shopping around may have little or no impact on your score.

Credit Score FAQ: Do pre-approved offers get considered as new credit and affect my credit score?

ANSWER: No, only applications for credit initiated by the consumer will affect your score. Inquiries into your credit for account review purposes as well as pre-approved offers of credit have no effect on credit scores.

Credit Score FAQ: Does co-signing for a loan affect my credit score?

ANSWER: Yes. By cosigning, you are accepting full responsibility for the debt if the other person does not pay as agreed. A cosigned account will appear on both your credit history and the other person's. All loans and credit card accounts that appear on your credit report will impact your credit scores.

Once again, if your question is not answered in this list, go on and ask it here. Remember, no question is silly or unimportant. There are probably many others who have the same question and would love to see an answer. So ask away!

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