Because…?
The number of times your score is pulled is one of the criteria for calculating your credit score. Someone who is opening a lot of accounts over a short length of time would be a bad credit risk. Whatever. MY gripe is that my lower credit score from opening just ONE new account could cause my liability insurance costs to rise. Fuckers.
That’s unlikely. The actual dip caused by a series of hard pulls
(It has to be several in a short period) is small and temporary. It’s a minor abberation in the statistical soup of your total score.
If someone informed you that requesting your own report would negatively impact your score, they were mistaken.
Yes, yes I do. Each statement I get shows previous payments. It’s easy enough for me to pull out my paper copies or print them out from the Visa/MC/Amex website and show I have no late payments, under 30% of my credit limit etc…
However, maybe I don’t show them the store credit card that I had a few late payments on (and the other 4 maxed out credit cards I have) and tell them I don’t have cable because I prefer to read or use Netflix and Hulu rather then let them find out it was cancelled after I didn’t pay the bill for 6 months.
Any application for credit counts as a hard pull, even if it is not granted.
The reason for this is that a person’s desire for credit is often times a sign of financial stress.
As far as why just 1 pull will have an impact, a few things:
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the impact is very small, a single pull will typically have an impact of less than 5 points - although this can vary based on quite a few things
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the number of pulls is a rolling thing - it’s how many pulls in the last 24 months, so they need to keep track of a single pull, as 3 months later there would be another one and hence, not just 1 pull. Basically, between 1 and 2 pulls over 24 months is considered a non-issue, 3-4 will cost a few points, 5-6 is not great but still not a problem if the rest of your credit is OK, over 6 is not great
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most companies only pull from 1 agency, so if you apply for 8 credit cards - any given credit report will only show 2 or 3 or some other portion. You can see who pulls from where and be strategic about where your pulls land - http://www.creditmania.com/thelist.asp a good strategy is to avoid one reporting agnecy entirely - that way, if you’re ever in a bind, you can apply for credit with a company that uses that agency and they won’t see any pulls at all on your record
One tip is when you decide to get a credit card, apply for a few at once assuming you don’t need to apply again for a little while). The pulls will not recorded until after your application, so none of the applications will be impacted by one another.
I basically just apply for like 5 or 6 credit cards at a time every year. Each time I apply, half of the applications I’ve done have fallen off of the report.
I never said it was from me pulling my own report. My husband and I received letters form Experian that said “a negative item was added to your credit report”. Of course, you have to order a copy of the report in order to find out what the negative item is. It turned out to be a loan we had taken out with our credit union to make an improvement to our home. The fact that we had taken out a loan (with an otherwise pristine report) was reported as a negative impact item that caused our score to be lowered. It is possible for this drop to negatively impact our cost of insurance, since your credit score is used in calculating your rates on liability insurance (your car, your home, etc.).
Of course it is/does/can/whatever.
You’re out there trying to borrow money from whomever - why shouldn’t someone else take that into account when they are considering if they too should extend you credit? (they’ll also take into account all of the other pristine parts of your report)
As to the insurance - if you don’t think that they should use credit reports to determine rates - well, that’s a different gripe isn’t it?
In the absence of credit reporting agencies, wouldn’t the banks just do the research themselves, ie. asking your other creditors for the same information that the agencies now handle? It would be less efficient than having the big three national agencies, but vastly preferable to not making loans or forgoing due diligence. It would likely cost more than buying reports, which presumably is why they don’t already do it themselves, but they could just pass the costs on to the borrower with extra fees or higher rates.
You’ve clearly put considerable thought into this, and it must somehow be paying off, but it’s hard for me to see how. I have only three credit cards that I’ve had for decades, an American Express, a MasterCard, and a Discover card. What benefit do you derive from apply for half a dozen credit cards every year?
Free Zynga dollars!
How are they going to know who the other creditors are?
If they didn’t exist, it would be necessary to create them in order to have a functioning modern economy.
An additional credit card will increase your total available credit. Assuming the new card doesn’t lead you to charging more than you already do, this will lower your utilization percentage which is a big factor in calculating FICO score.
However half a dozen hard pulls may offset whatever benefit a person would gain by increasing their total available credit.
You can use the credit cards as a source of zero-interest-rate loans (e.g., cards occasionally offer no-fee 0% interest balance transfers)–you can use this as a source of rate arbitrage (e.g., get free cash from your credit card for 12 months, and invest the cash in a savings account–not so great now that interest rates have fallen so low). From another website:
How much are people making doing this?
A lot. For someone with a good credit profile, $200-300k in new credit lines during one App-O-Rama is not unheard of. And with some creative reallocating of existing credit lines, and high interest deposit accounts, profit of $15-20,000 or more per YEAR is possible.
If you can figure out how to get cash back without actually buying something, that can be another source of arbitrage. E.g., back in the day you could buy coins from the US Mint at face value with no shipping costs. If you bought the coins with a 3% cash back credit card, you could 1) buy $100 of coins with your credit card, 2) receive $3 cash back through your credit card, 3) deposit coins in bank account and use them to pay off the credit card. You just earned $3. If you had a high enough credit limit (e.g., through holding dozens of credit cards) you could make a lot of money doing this. (No longer possible–they closed the loopholes)
The same way the existing credit reporting agencies do.
No idea of the specifics of how it’s done, it could be black magic chicken bone reading. Nevertheless, today there are three big companies that somehow make a business out of knowing about everybody’s credit history and selling it.
If they all folded tomorrow, the demand for their services wouldn’t go away. The customers, ie. banks, would have to do the work internally. A whole lot of people make their living writing the software or filing the paperwork or making phone calls or whatever the heck it is those guys do. The knowledge of how to assess credit histories will not perish from the Earth.
I have not seen a zero percent cash advance offer without 2-5% fee in at least 5 years, and even back then, they were rare. Paying 2% in exchange for an unsecured 12 or 18 month loan is pretty good, but it’s hardly free money. Do you know of any no fee+no interest cash advance offers that are out there today?
On the other hand, the zero percent puchase offers are free money for the card holder, but presumably they are only offered because the bank is getting a transaction fee from the merchant.
There are occasional no-fee cash advance offers; I know Alliant has/had one recently. I don’t really follow the scene closely any more because at current interest rates it hasn’t been worth the effort. Still might be worth it for the sign-up offers.
Credit agencies, and the other massive privately-held warehouses of consumer data, do not exist for the benefit of the subject consumers. Calling their services “a tremendous favor” is like saying you should tip a mugger.
Who you at least have a fair chance to shoot.
I apply for 1 card that has a 12 month 0% interest period every year, and roll all of my existing credit into that card, so that I don’t have to pay any interest.
I get one or more cards simply to get free miles to sign up (such as the 100,000 I got from British Air for a free trip to easter island last year, or the 80,000 I got from American to go to Peru, I celand. and Paris for free the year before).
I get other cards to get free upgrades at hotels (like the hilton amex that gave me a free upgrade to the executive floor at the hilton reyjakvik - that comes with free booze and free spa use) or free baggage on airlines (like the united card from chase).
BTW, I like free shit 
Complete and utter bullshit. There’s a nifty thing known in common parlance as documentation. If the creditor doesn’t provided documentation regarding the presumed debt, then they shouldn’t be allowed to append that debt information to a person’s credit history file. Actually, I’d be ecstatic if the various state legislatures and Congress would grow a pair and actually prohibit that by law. And by law, I mean a law that has some teeth in it because whatever’s currently in place now certainly isn’t working.
What documentation, you ask? Well, how about a signature acknowledging the initial transaction and some kind of proof annotated that the person entering into the transaction is, in fact, the person whose credit file is about to be destroyed by some sloppy clerk.
Oh, why should the things be free? Because so much of society (banks, employers, renters, to name a few) rely on the information, or rather “information” contained in those reports prior to making decisions regarding a person. Congress at least had the courage to mandate that each credit reporting agency must provide a free report once a year. The report to be provided in the event of denial of credit is a different critter but it, IMHO, shouldn’t be. And being denied employment should also generate a free report. Heck, it should be required by law that the person doing the denying show you the damn report on the spot and discuss it with you.
The current set-up is too much like the Star Chamber to make sense. It’s wrong and is currently rife with errors. I cannot even get close to comprehending why you seem to think it’s so peachy keen.
It most certainly is not always a he said, she said thing.