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Sorry if this has been discussed before. Besides from the fact that each time you apply for a card your credit report is accessed, does it really hurt your credit? It looks like some people hear apply for lots of cards. In my case my credit is very good. I also don't owe anybody anything and very seldom use credit for anything. My credit cards are always paid in full each month. I know my car insurance may go up some, but the free hotel nights, etc., more than offset it. Is there any other thing that may be effected by my credit report being accessed often?
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Some say that if you apply for many cards at once, a so-called "app-o-rama" your credit will only suffer one hit. I've done it but didn't check my before and after credit scores. Anyone care to comment?
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Your credit score will go down a bit for each card you apply for. If you have good credit, and do not expect to need a mortgage or vehicle loan in the next six months, and you won't be increasing the amount of credit you actually USE, you should not suffer any ill effects.
However, it is possible that a card you already have might review your record and after seeing a lot of new accounts they may either cancel the card or cut back on your credit line.
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Too many inquiries is an acutal FICO code. I get free detailed credit reports, including the detailed score info, each month because Chase lost some magnetic tapes. At any rate I've observed that excess inquiries can easily make a FICO score swing 20-40 points. Too Many Open Accounts is also a one that seems to take a 20-40 point swing. If you're score is already at 800 no big deal. If you're score is at 720 you'll end up at a mid-qual score/rate.
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Here is what I've done in the past 3 weeks: Applied for 2 new cards and applied for increased credit line on another. I got the 2 new cards and the credit line increase. I also applied for a credit line increase on one of the new cards and got it. Then I balanced transferred at 0% the maximum amount of credit line (minus $1,000) on all of the cards. This amount is a very big number. Do you think I can go ahead and apply for more cards without much damage to my credit score? This will be the first time in my life I will be carrying a balance on any credit card (I'm in no hurry to pay off the 0% balances).
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I think that bigger issue is that you have high utilization on a credit card. You do not want to carry balances over 30% according to some or 50% according to others. That alone will drop your score.
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The best way to make your score look good is to take a credit card with a credit limit of 20k, balace transfer check 19k, within two payments drop it to 10k if you have 0% and then split the other over the time period left.
Inquiries damage your credit and there are plenty of threads on this. To sum it up. Average an inquiry every 60 days and you will be ok. Any more often and that, your credit score will suffer. Due to the fact that this has been extensively discussed to nausium, I will not say any more.
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Thanks everyone for the suggestions.
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I know my car insurance may go up some, but the free hotel nights, etc., more than offset it. Is there any other thing that may be effected by my credit report being accessed often?
How would this affect your auto insurance rates? :confused:
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Most insurance companies now use your credit score as a factor in determining your car insurance cost. They have some data that shows the lower the credit rating the more likely the person is to get in a wreck.
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Most insurance companies now use your credit score as a factor in determining your car insurance cost. They have some data that shows the lower the credit rating the more likely the person is to get in a wreck.
FWIW, I asked my insurer USAA about this and they said it would absolutely NOT affect my rates. It apparently could affect a decision regarding insuring a new individual, however.
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Most insurance companies now use your credit score as a factor in determining your car insurance cost. They have some data that shows the lower the credit rating the more likely the person is to get in a wreck.
There is no significant correlation between poor credit and poor driving, and there certainly is no predictive relationship. It's a lie. A well marketed lie, but a lie nonetheless.
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Most insurance companies now use your credit score as a factor in determining your car insurance cost. They have some data that shows the lower the credit rating the more likely the person is to get in a wreck.
This is illegal in California and many other states. Some states, including, I believe, Texas, allow insurance companies to check your credit.
Some say it is just a way for the companies to discriminate under the guise of looking at credit.
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This is absurd.
Of course insurance companies should be able to evaluate Current credit report as a part of their underwriting criteria.
The American People suffer from a sense of entitlement.
Not everyone can get the best underwriting class. That is predicated on a far below average risk on an acturial assessment.
Not Everyone is an EXELLENT risk.
At law schools only 10% of less of student body qualifies for the coveted law rewiew??
Should all ---100% ---- of students qualify?
in auto insurance, driving record, geographic location , type of car driven , etc, count far more in the underwriting process than consumer credit history.
Similarly, in Life insurance underwriting Personal health is the hugest factor.
But to say that there is ZERO correlation between personal finances and filing insurance claims is flat out wrong.
Who do you think----all other statistical factors being equal--- is more likely to file a claim on their home owner policy for a 'loss'?
1- A person undergoing financial hardship and money problems.
OR
2- A person with stable finances and a responsible payment history.
By the same token would you contend that a perspective employer has no right to access this information?????
If I had two equally qualified candidates for a job, I would choose the one not undergoing current financial problems.
This nonsense about people not getting jobs or insurance because of 4 year old financial hardship is not true.
Insurance companies want to sell polices.
But if someone is under present immense finacial pressure, It is relevant to take that into consideration.
And I'm a left winger. I am left of mainstream liberal democrats.
But sorry, everyone should not pay the same rate for insurance. Why discriminate against the low risk clients??????
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How would this affect your auto insurance rates? :confused:
Yes indeed, it is as confusing as it seems but sadly it is true and now you hear directly from the horse's mouth. This is my personal experience so no second guessing.
I had two auto insurance and home renters insurance with AAA since 2003. They never checked my score after the first initial inquiry. In 2006 I changed one of my vehicles and so asked for changes in my policy. That called for a second inquiry which was during the time of my heavy credit card chruning. AAA maintains a complicated scoring system ranging from 9 (the best rating to the lowest, which I dont know but may be 0). My score droped from 9 (the best one can get) to 8 and so a sharp increase in rate. AAA could not disclose the reason for drop in score. I was told to contact choice trust to send me an auto score report, which I did and did not find any thing suspicious. Most of the CSRs were either ignorant or did not want to disclose how they calculate their own rating. My FICO score was 756 and I always thought I am in good hands as long as I can maintain this score despite my heavy credit card churning but alas, I was wrong.
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Inquiries can make up as much as 15% of your credit score. This makes it an easy math problem. Can you accept the results?
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There is no significant correlation between poor credit and poor driving, and there certainly is no predictive relationship. It's a lie. A well marketed lie, but a lie nonetheless.
This makes no sense.
Insurance companies have no reason to set rate classes based on something that has nothing to do with your driving record. What in the world would they gain by chasing away some customers unless they were high risk customers??
And it makes perfectly good sense, also. Both are caused by risk-taking behavior.
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Insurance companies have no reason to set rate classes based on something that has nothing to do with your driving record.
Ok, so poor credit = poor driving. Show me the data.
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Ok, so poor credit = poor driving. Show me the data.
It doesn't have to be all drivers with poor credit driving poorly, just some. The insurance business is a numbers game, so even if a small number of lower fico drivers have an increased tendency towards car accidents (due to more risk taking behavior or disregard for rules), it pays for the insurance company to use credit scores as a factor.
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The insurance business is a numbers game, so even if a small number of lower fico drivers have an increased tendency towards car accidents (due to more risk taking behavior or disregard for rules).
This is exactly correct. It's called the law of large numbers. The simplest explanation of how it works is mine and Bill Gates average net worth is 20 billion (± a few billion) but if you average in everyone and remove the outliers my average net worth is back to something more real.
Cigarette smoking works the same way, though the science is not as disputed now. Old argument, cigarettes don't cause cancer (specifically, you can’t prove they cause cancer), however the correlation between smoking and lung cancer was just too high to be ignored forever.
As someone above mentioned, it's not that someone with a lower score will have an accident; it's that they're more likely, statistically, to have a claim, using the law of large numbers. So while one particular person with a low credit score would not have a particular claim, the vast majority of people with similar credit scores will.
This has nothing to do with data, though I'm sure it does exist. This is simply those evil actuaries picking on the little guy with their statistical mumbo jumbo.
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This has nothing to do with data, though I'm sure it does exist. This is simply those evil actuaries picking on the little guy with their statistical mumbo jumbo.
Under competition, it does actually lower rates for those with higher credit scores. The more factors used to identify risk, the lower the rates are for those who aren't identified as riskier (b/c more high risk drivers are removed from their group).
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Ok, so poor credit = poor driving. Show me the data.
It is called adverse selection in the insurance business. There are people who can't make car or mortgage payments who burn them up to get out of their financial responsibility. It is a statistical reality.
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People with bad credit also get insurance when they are required to, like when they have a claim to file, their license is due for renewal, they are getting a new job or they are buying a car. And then surprise, surprise, they don't pay the bill and it lapses or cancels.
People with bad credit are more likely to be involved in a hit and run.
People with bad credit are more likely to steal, not hold a job, get drunk and drive.
Most people with bad credit are irresponsible, that is why their credit is bad.
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How would this affect your auto insurance rates? :confused:
Get your Free CLUE Report on this one..go to Choicetrust.com
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Most people with bad credit are irresponsible, that is why their credit is bad.
yep, I believe that, just by looking around the town I live in
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Ok, so poor credit = poor driving. Show me the data.
this was from http://www.kiplinger.com/features/archives/2006/01/credit.html#auto:
The Texas Department of Insurance conducted its own study in 2004 to see if there really was a correlation and came to the same conclusion. After studying the claims records of two million insurance policies, the insurance department found "the difference in claims experience by credit score was substantial," according to the regulator's report. The 10% of policyholders with the worst credit scores had 1.5 to 2 times more claims than the 10% of policyholders with the best credit scores. Drivers with the best credit scores were involved in about 40 percent fewer accidents than those with the worst credit scores.
I'm all for it. It will lower my rates because I have good credit scores.
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The best way to make your score look good is to take a credit card with a credit limit of 20k, balace transfer check 19k, within two payments drop it to 10k if you have 0% and then split the other over the time period left.Carrying that much revolving debt will not make your credit score look "good". I've read anecdotal evidence that having small balances reporting may help credit score, but we're talking in the range of 1%-5% of available revolving credit, which can easily be accomplished by just using credit cards for monthly expenses anyway.
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They have some data that shows the lower the credit rating the more likely the person is to get in a wreck.
There is no significant correlation between poor credit and poor driving.
The insurance business is a numbers game, so even if a small number of lower fico drivers have an increased tendency towards car accidents (due to more risk taking behavior or disregard for rules), it pays for the insurance company to use credit scores as a factor.
Actually, I don't believe the insurance companies ever claimed there was a correlation between credit score and driving ability or number of accidents. As the Texas Department of Insurance study confirmed there is a corrleation between credit score and number of claims, those with lower credit scores tend to file more insurance claims.
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Carrying that much revolving debt will not make your credit score look "good". I've read anecdotal evidence that having small balances reporting may help credit score, but we're talking in the range of 1%-5% of available revolving credit, which can easily be accomplished by just using credit cards for monthly expenses anyway.
I did it and my score jumped 15% within 60 days. So it does work, maybe not for you, but it did work for me.
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FWIW, I asked my insurer USAA about this and they said it would absolutely NOT affect my rates. It apparently could affect a decision regarding insuring a new individual, however.
I'm a longtime USAA car insurance policy holder so this is good news:) , particularly since I'm getting ready to apply for my third AA credit card in order to rack up miles!
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I have wanted to get a USAA card for a long time but apparently they will not accept general applications any longer. Does anyone have any suggestions on how to get around this brick wall?
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I have wanted to get a USAA card for a long time but apparently they will not accept general applications any longer. Does anyone have any suggestions on how to get around this brick wall?
Wish I could help you here ... my in-laws were/are Army and Navy World War II vets so that's the only reason my husband and I became eligible to become USAA members.
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Ok, so poor credit = poor driving. Show me the data.
On top of all the (good) points others have made - here is another. Someone with poor credit is more likely to be financially stretched, and thus more likely to make a claim if they have a fender bender. It doesn't make sense financially to make a claim for a couple of hundred bucks (you'll pay more in premiums in the future) - but someone who is stretched may not have the luxury of taking the long view.
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someone who is financially stretched may also not be intelligent enough to make any rationale decisions.