Arizona Real Estate Notebook

Here’s a great little article on what determines your credit score.

It’s strange that closing an department store credit card account can sometimes lower your credit score!

Another confusing area involves “inquiries”: instances where you or other parties pull your credit report. “Hard” inquiries that indicate you are looking for a new loan, such as when you shop among dealers for a car, can hurt because new loans could contribute to a lower credit score. It’s even worse when you prolong the loan-shopping process over several weeks or months.

If you are going to shop for a mortgage do it all in one week. If several mortgage companies pull your credit score in a short amount of time, it only counts as one inquiry as far as your credit score is concerned. If, however, your credit score is pulled by several different mortgage companies over several weeks or months, your credit score can be hurt.

More

- What determines your score

- Check your credit score

- How to protect your credit score (You can improve your credit score quickly by getting any errors in your credit report corrected, for example, any bills that you long ago paid off but which show as outstanding and past due on your credit report.)

- How credit scores effected these folks

A former auto-industry executive who has lived on three continents, Balletto used to have credit limits of about $16,000 each on his three cards, along with scores in the 750-780 range. But he also worried that someone could steal his cards and run up a bill.

“So I asked the card companies to reduce the limits to $6,000,” he said. “And sure enough, my credit ratings immediately dropped to 705-725. Overnight, I had become a worse credit risk because I was using a larger percentage of my available credit.”