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Credit Score News, Tips & Advice « Credit Scores > Credit Score Tips > Credit Card Myths: Ask and You Will Be Punished

Credit Card Myths: Ask and You Will Be Punished

By George Hauser
Published: Wednesday, March 17th, 2010

Credit scores are technically numeral expression of a person’s credit fees. The calculated credit score of a person would be one factor in determining whether this person deserves a loan. There are many ways on how to improve one’s credit score and are often lead to believe in fast schemes that would improve their score.

One false belief is that you hurt your credit when you check your FICO score. There are inquiries that hurt your credit but checking your FICO score isn’t one of them.

FICO stands for Fair Isaac Company, which is a company that creates and computes credit score. FICO scores work in a way that divides the different factors that would affect it into their most fitted percentage.

In computing for your FICO score, 35% of the score is based on the person’s payment history which are reduced by late payments, 30% of the score is based o the amount of credit that the person owes, if a person owes a great deal of money it indicates that the person is over-extended and at lesser chances to be given future loans, 15% of the score is based on the length of time credits have been established and how active the account is while the remaining 20% would be based on whether the person is taking on new loans or already have a string of loans to their account.

What would hurt your credit is actually the process of applying for a new credit. New credits are often seen as opportunities to apply for new or more loans which add to the loans the person already has, resulting to damage in their credit scores because owing too much means that you don’t have enough money to meet the terms of a future loan.

Ordering your own credit score or credit report doesn’t count. Also, the mass inquiries that credit card lenders make in order to figure out if they’re going to send you an offer for a pre-approved card wouldn’t hurt your credit score either, unless of course you take up their offers, but that’s a different story.

Minimizing the damage from credit inquiries will need for you to make sure that whenever you look around for mortgage, you do so under a short period of time.

The truth is FICO score works in this way; they treat multiple inquiries in a forty-five day period the same way as they treat one inquiry for the same period of days. Another is that all inquiries within thirty days prior to the time when the score was computed are completely ignored.

People should also remember that in the process of improving their credit scores, they have to obtain an update on where they are exactly with their scores. So, if you’ve believed that asking for a credit report damages you’re score and resort to avoiding having to inquire about them, you are more likely to damage your score even more by not being aware of your credit and failing to put a limit on yourself.

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