ONE inquiry is the 3rd negative factor for 725 Equifax FICO score

Sorry I haven’t posted here in such a long time, been SO busy.

Below are the Equifax FICO score factors proving that just ONE inquiry can seriously lower the FICO scores.  And it’s an OLD inquiry from 1/29/09 — about to be ignored.  This was not a credit application, but for an AT& T cell phone.

Don’t believe the myFICO (formerly Fair Isaac) lies that the occasional inquiry is insignificant.  As the 3rd most important negative score factor, it’s costing my client at least 20 FICO score points.

HOWEVER, while I’m certain that the inquiry also was the 3rd negative factor last August, they only provided us with TWO negative score factors.  As the scores get higher, they disclose fewer score factors.

Most likely, myFICO limits the number of negative score factors for “high scorers” because they are worried that people with high scores would question the scores and factors AND have the money to DO something about it.

Equifax FICO score 725

[was 733 in 8/09, but score is lower now due to higher revolving balances]

Top Negative Factors

1. You’ve made heavy use of your available revolving credit.

Ratio of your revolving balances to your credit limits 61%
— was 53% and 2nd factor

2. The amount owed on your revolving accounts is too high.

Total owed on revolving accounts $47741
— was $36945 and was 1st factor

3. You’ve recently been looking for credit.

Your applications for credit in the past year 1 inquiry
— new factor because the score is lower

What’s helping your FICO score

You have no missed payments on your credit accounts

Number of your accounts with a missed payment 0 accounts

You have an established credit history.
Your oldest account was opened 26 Years, 2 Months ago
Average age of your accounts 8 years

You’ve shown recent use of credit cards.
Your FICO score evaluates your mix of credit cards [?], installment loans and mortgages. People who demonstrate responsible use of different types of credit are generally less risky to lenders. You helped your FICO score by showing recent use of a credit card.

You can see the impact of the higher revolving balances. And now just ONE almost 1-year old inquiry is a negative factor.

Positive score factors should be taken with a grain of salt.

They are NOT provided to lenders and often make NO sense at all.

However, lenders often get MORE negative score factors and I highly recommend reviewing the MORTGAGE credit report if you apply for a mortgage.  It usually contains FOUR negative score factors and it usually indicates that inquiries impacted on the scores even if inquiries are NOT one of the four most important factors.

KEEP those mortgage credit reports, they’re great if your FICO scores are high enough to not receive 4 negative factors and of course establish DAMAGES if you get anything less than the best rate.

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