NewsLetter
Page 3
Page 3
Who is your "Credit Expert"?
I recently took an online quiz at a national site
presented by a large bank. Of their 12 questions, SIX had incorrect answers! Following are three of their questions.
1) Does a bank that does not have an existing account with you have permission to pull
your credit report without your acknowledgement? Their answer? "YES"
The correct answer is "NO". They were obviously thinking about "pre-screened offers of credit".
In this instance a lender may request a list of qualfied consumers from the bureaus. The lender supplies
criteria the consumer must meet and gets the names and addresses of those people who qualify. The
lender does NOT get a copy of your report. This is NOT an inquiry on your file that affects your score.
2) Does paying off or paying down your accounts increase your score? Their answer? "NO".
The correct answer is "YES". While paying down your installment debt does not help your credit score, paying down
your revolving debt yields one of the largest increases in score you may achieve.
3) Does paying an account through a credit counseling service harm your score? Their answer? "NO".
The correct answer is "YES". A current account has a status of "01" There are statuses beyond that for each level of
delinquency up to "05. A repossessed account has a status of "08" and a charged off account has a status of "09".
An account in a counseling program has its status moved to "07". Not only do status changes
decrease your score, an "07" status moves the scoring of your entire file into a "major derogatory" score card.
