Credit Score Management

Sometimes it seems as though the credit scoring process is designed to frustrate the user and work only in the favor of lenders, but really this isn’t the case. Unfortunately, credit scores and credit reporting are very complicated, but that doesn’t mean they can’t be understood or that it is done intentionally. Believe it or not, companies want to loan you money, but they have to find some way to judge whether they will be paid back on time or not, and right now the FICO and other credit scoring systems are the best way to do that. You might wonder who really looks at your credit score when you aren’t, but you might be surprised by the answer. Your credit score is really analyzed much more than you reckon!

Believe it or not, your credit score is often looked at by prospective lenders without your consent. The way they do this is by receiving a report or score from parent or “sister” companies that forward it “on your behalf.” Most of the time, the verbiage that allows them to do this is in the fine print, so be careful when you sign paperwork authorizing a credit file to be pulled. Although most of the time this does not make another inquiry on your report, sometimes it can. Because of this, you need to be careful of who you allow to access your information.

Obviously, when you apply for any type of loan, credit card, or mortgage they will pull a copy of your credit report and score. But, many times this will not reflect terribly on your account as long as the reports are all pulled for the same reason. For example, it is ok to apply for a mortgage and have your score pulled by many lenders in the same time frame, but you might want to consider always keeping a 30 day ancient copy on hand to provide for pre-approvals.

You might also be surprised to hear that your credit score is analyzed when you apply to rent property. Most rental agencies have a special system that allows them to pull a specialized credit report, which will in turn pull your credit score. Also, rental car agencies and insurance agencies can pull your credit when you apply for services. Many people don’t have any thought that this happens, which again shows you why it is so vital to read the fine print.

There are all sorts of people pulling your credit throughout the year that it becomes imperative to keep copies of your report on hand so that you can see who and who is not really looking at your score. Unfortunately, it can be tough to stop many of these inquiries, but if you read the fine print in all contracts, you will be able to make a better choice about who to give access to and who to withhold it from. Credit is a complicated business, but that doesn’t mean you can’t know it. Just make sure that you keep track of your profile and only give authorizations when you need something, otherwise just pleasantly refuse.