Category Archives: Credit Reports & Scores

Freezing your kid’s credit might not be as easy as you think

This post originally appeared September 22, 2016 on CreditCards.com as “Credit bureau policies vary when freezing a child’s credit

By Barry Paperno

Dear Speaking of Credit,
Why can’t I put a credit freeze on my children under the age of 18? – John

Dear John,
A credit freeze, also known as a security freeze, lets you restrict anyone else’s unauthorized access to your credit reports and scores by essentially shutting the door to all credit history associated with your Social Security number. Then, when no credit report or score is available to a creditor evaluating a fraudulent credit application, the application is typically declined and fraud has been prevented.

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Didn’t authorize disputed charge put on card? Are you sure?

This post originally appeared September 15, 2016 on CreditCards.com as “Business charged you via card number on file? Dispute it

By Barry Paperno

Dear Speaking of Credit,
Can a company that has my card number from a prior transaction charge my Visa for a disputed service (16 months after the disputed service)? – Frank

Dear Frank,
Not without your permission they can’t. But are you sure you didn’t give the service provider your consent to charge the card, by way of the fine print in the purchase agreement for this disputed service or the prior transaction that was charged to your Visa card?

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Can credit denial hurt your score?

This post originally appeared August 4, 2016 on CreditCards.com as “How being denied credit affects your score

By Barry Paperno

Dear Speaking of Credit,
What are the credit consequences of being denied credit? – Bo

Dear Bo,
In the days before modern credit scoring, more than 25 years ago, it could hurt. A lender who saw a hard inquiry on a credit report, and no corresponding credit card account being issued, would assume the application was denied. The assumption could then negatively influence the credit decision at hand.

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How much score damage to expect from added inquiry?

This post originally appeared July 28, 2016 on CreditCards.com as “Hard inquiry warning not required

By Barry Paperno

Dear Speaking of Credit,
Are lenders supposed to warn you before you apply that a hard inquiry will hurt your credit score if denied? Do inquiries hurt your score differently when denied credit than approved? – Tommy

Dear Tommy,
Some lenders may warn applicants of the potential for credit score damage from a hard inquiry caused by a credit pull. But no law requires them to do so. The harm from a hard inquiry happens at application. It does not matter whether your application is approved or denied.

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Credit scoring quirks that make you wonder

This post originally appeared July 21, 2016 on CreditCards.com as “5 Credit scoring head-scratchers

By Barry Paperno

Dear Speaking of Credit,
What makes your credit score drop when a loan has been paid off early? – Delores 

Dear Delores,
In the vast majority of credit-granting situations, the rules of credit scoring makes a lot of sense. If you have a history of living within your means and paying on time, you’ll have a good credit score and be able to obtain new credit when you need it.

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Credit utilization ratio: timing is everything

Dear Speaking of Credit,
Is it true that paying off my credit cards every billing cycle may not benefit my score as much as I hope, because creditors can pull my credit scores at a time during the month when my balances are @ 50%? I have utilization ratios @ 50-70 % between cycles, because of business expenses. –Richard

Dear Richard,
You don’t need to worry about when your creditors pull your scores each month, as long as your balances as of each card’s closing/statement date are as low as you can make them. No matter when your scores are pulled during the month, the last reported closing/statement date balances are the only ones the scores will ever see.

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High Canadian score won’t carry any weight in the U.S.

This post originally appeared June 16, 2016 on CreditCards.com as “How a Canadian can restart credit in the U.S.

By Barry Paperno

Dear Speaking of Credit,
My husband is a Canadian citizen and has excellent credit (771), but he will be a U.S. permanent resident this year and we were wondering how that would affect his credit? He was hoping to buy a new semi truck this year and doesn’t know if his credit will carry over to the U.S. or if he would be starting with a clean slate and the need to start his credit history all over again. Thank you for any advice you can give me. – Felicia

Dear Felicia,
Despite your husband’s excellent 771 Canadian credit score, to finance that truck he will now have to restart his credit. He must create an entirely new credit file and score in the U.S. by obtaining credit from U.S. companies that report to U.S. credit bureaus. And he is going to have to act quickly if he wants to buy that truck this year, as a credit file and score won’t appear instantly.

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Do 100-word statements matter?

This post originally appeared June 9, 2016 on CreditCards.com as “Who sees credit report 100-word statements.”

By Barry Paperno

Dear Speaking of Credit,
Barry, if I write a 100-word statement on my credit report, does every lender see it? Or just the ones I want to have see it? In other words, if despite my medical issues I managed to keep my mortgage current but had some credit card late pays, I want card issuers to see why I had a problem, but I don’t want future mortgage lenders to see that I ever had a problem at all. And do the 100-word statements expire, or do I need to manually remove them? Thanks. – TJ

Dear TJ,
The “100-word statement” first came about as a way for credit bureaus – Equifax, Experian and TransUnion – to comply with a Fair Credit Reporting Act (FCRA) requirement that some recourse be available to consumers following an unsuccessful dispute over the accuracy of credit report information. It says:

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How lenders report and rely on credit bureau information

This post originally appeared April 14, 2016 on CreditCards.com as “Positive info not always reported to all 3 credit bureaus

By Barry Paperno

Dear Speaking of Credit,
In recent years I have been greatly improving my credit habits. However, I have been using only my personal bank for auto and personal loans. I recently applied for a credit card through my bank and was approved. I was informed that my bank only reports to one of the credit bureaus. So my Equifax score looks fair though TransUnion shows poor. This is mainly due to old medical debt that should fall off in about two years.

Here are my questions for you: Is it possible to have my accounts reported to a credit bureau even though my bank doesn’t directly report them? Also, I have heard that medical debt is supposed to have less impact on your score when being considered for a line of credit, so is this true and if so to what degree? Finally, if I continue to only use my personal bank for credit lines that only report to one of the credit bureaus, how will this affect my overall credit? Thanks again. — Keith

Dear Keith,
The practice of banks, such as yours, reporting to only one or two of the three credit bureaus — Equifax, Experian and TransUnion — was much more common in the past than in recent years. Most now report to all three. Still, your experience shows that there remain some small banks, credit unions and other lender holdouts who report to only one or two, but not all three bureaus. That often surprises consumers, who expect all three credit bureaus to accurately reflect their credit histories.

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Bad credit could be long-lasting reminder of visit to US

This post originally appeared April 7, 2016 on CreditCards.com as “Even with no SSN, unpaid debt can ruin your credit

By Barry Paperno

Dear Speaking of Credit,
Hello. I am visiting the U.S. and don’t have a Social Security number. Once I had to go to the hospital. Now I have a hospital bill and can’t pay it. Can they report bad credit against me without an SSN, using only my name? Thanks. – Maggy

Dear Maggy,
Welcome to the U.S.! And welcome to our illustrious credit reporting and health-care billing systems. Along with what may be your first American hospital bill, by now you just may have – or may soon have – an all-American credit report that may be remaining in the U.S. long after you return home. Here’s why.

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