Today we get to answer a few questions! There’s a lot of chatter on the subject of credit. At Inversion Credit we take pride in providing accurate information to important questions. Credit education is the first step to financial freedom, and a sweet credit score.
#1. I hear checking my credit effects my score. Is that true?
This is called a soft inquiry. A soft inquiry is when you, another person or company checks your credit report. For example, a renters application usually involves a background check and credit check. If the apartment complex does this themselves it will be a soft inquiry. On the other hand, if the apartment complex uses a third party for credit and background checks this will be a hard inquiry and will hurt your score.
There is also a hard inquiry. These occur when a Lender; like a bank or a car dealership checks your credit score. Also, hard inquiries occur every time you apply for a credit card online. Each hard inquiry is 5 points off your credit score! Hard inquires can stay on your credit report for up to 2 years. Dang!
#2. I went to small claims court. Will it show on my credit report?
If you lost, Yes. Public records are legal documents and most will appear on your credit report. These may include judgments (someone sued you) and tax liens. Just the presence of a judgment, wether paid or unpaid will have an effect on your credit score.
#3. I filed for Bankruptcy this Year. Can I still get a credit card?
Yes, but not as easily. A bankruptcy will always reflect a very negative score on your credit report. Depending on where your Credit Score was prior to the bankruptcy, you may see a very big drop in your score. Bankruptcies can stay on your credit report for up to 10 Years. They should never be a first choice to a large debt.
With a Bankruptcy on file you can start with a Secure Credit Card. OpenSky Secure Credit Card is a great place to start.
#4. Will my Student Loans EVER come off my credit report?
Yes. This really depends on the status of your Student Loans. Short answer – 7 Years.
Account is Current
This means you’re making on-time payments. The Loan will remain on your credit report for 7 years from the last payment (paid off) that you make. By the way, Student Loans are reported as “Installment Loans” on your credit report and considered “good debt”. Pay them on-time and it will reflect a good score.
This means you did not make a payment for more than 180 days and most likely went to collections. Again, the account will remain on your credit report for 7 years from the date you made your last payment. Note – If you begin making payments again, the 7 year clock starts over from the date of that payment.
Feeling full of knowledge? Good. Now go be smart!