Credit Scores and Inquiries

Inquiries Effect on Credit Scoring

 

Many people have heard before that inquiries lower the score.  As a result many customers will ask you whether this is true or just a myth.  Inquiries definitely impact the consumer credit score.



FICO score inquiries account for 10% of the total credit score.  FICO counts this to the part of their score that deals with the accumulation of new debt.



If consumers apply for a lot of credit within a short period of time, their scores will go down.  There is no set amount of drop per inquiry - it's bundles of inquiries in a short period of time that really impact the score, not just one single inquiry.

This means that when a customer applies for something and an inquiry is put on their report, their score might not go down at all.  But if they start applying for a lot of new credit in a short period of time, these groupings of inquiries will have an impact on their score.



However, there are exceptions: mortgage or auto loans.  If they go to apply for a mortgage, all mortgage inquiries within a 2 week time period only count as 1 inquiry on their credit report. The same applies for auto loan inquiries.



The reason for this, is that the score providers understand that consumers will commonly shop around for the best terms on home and auto loans, and they shouldn’t be punished for doing this. Plus, in the auto business, it is common for the consumer’s application to be sent to many different banks, which could also lower their scores, if FICO didn’t operate this way.



Accumulation of new credit or new inquiries on the report, accounts for 10% of the total credit score,  Insure your clients know about this, so they can minimize the amount of inquiries they put on their report further maximizing their scores.



For more details about your credit score and to learn ways to improve your credit status, please contact a representative at Precision Credit Restoration at 877-292-0656.  We are here to guide you from financial distress to financial success.  

What Should Potential Home Buyers and Those Refinancing Know About Credit Scores

When a third party pulls a copy of an individual’s credit profile and scores a “hard inquiry” occurs.  This credit review can have a negative consequence to your scores.  Do not have your credit pulled by any third party unless there is a very good reason for it like a pre-approval letter.  There are windows of time that a series of “hard inquiries” for the purpose of a mortgage will hurt your scores less (usually within 45 days) but what is essential to remember is more than 5 third party inquiries for any purpose can drop scores dramatically depending on the individual’s full credit profile. “Hard inquiries” impact credit scores for one year and stay on credit reports for two.

When you pull your own credit online it will not impact your credit scores. However, the scores that are available online to purchase are usually not the same as the scores used by mortgage lenders.

Most mortgage lenders use the “middle score” as the risk factor. When a report is pulled by a lender it includes merged information from the three credit bureaus Experian, Trans Union, and Equifax. Each bureau has a FICO score that represents the risk of the borrower. The bank takes the middle number not the average.

The score model used by most mortgage lenders has customized versions for each bureau therefore each bureau has created their own name for the version they use. They are:  FICO 4 (used by Trans Union), Beacon 5.0 (used by Equifax), and Fair Isaac Risk Model V2 (used by Experian). We refer to these as FICO 4 for an abbreviation.  All of these scores are very similar but they have small variations.  Lenders tend to follow the score models used by Fannie Mae and Freddie Mac. These scores are currently FICO 4 models and will not be changing any time soon.

The scores sold at the consumer site www.myfico.com are FICO 8 score models and will be changing to FICO 9 sometime this fall.  This will cause confusion and larger score differences between the consumer FICO scores and the mortgage banking FICO scores. 

If your team would like more info on the details of the differences between the FICO 4 model lenders use and the FICO 8/9 model sold to consumers, plus how to handle questions and concerns of loan applicants, referral sources, and potential home buyers please reach out to us and we will set up a meeting to educate and discuss (stephanie@precisioncreditrestoration.com).

Besides the differences in FICO score models there are also many scores sold online that are not FICO scores at all.

Some of these scores are:

●National Equivalency Score: sold by Experian and it ranges from 360-840 points.

●​Vantage 2.0 Score: created by all three credit bureaus and it ranges from a 501- 990 score with letter grades A-F.

●​Vantage 3.0 Score: a newer version which ranges from a 300-850 like the consumer FICO score. Although it is the same range as most FICO scores it is not the same.

●​Plus score: sold by the bureaus, it ranges from a 330-830 score and is strictly educational.

●​Equifax score: sold and created by Equifax and it ranges from a 280-850 score. It is sold for educational purposes.

●​Trans Union scores: they range from 300-850 points and are also sold for educational purposes.

The best way to find out what the FICO score used by a banker is would be to have a banker pull credit for pre-approval. 

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​Feel free to reach out to us at 877-292-0656 if you have any credit questions or reports you would like reviewed!

"Guiding you from financial distress to financial success"

How to prepare our future for financial success?

How should we be preparing our future Millennial clients for successful real estate purchases and financing approvals?

Millennials (those under the age of 34) make up many of our current and potential home buyers/financing applicants.  With this in mind it is of great value for us all to learn more about their attitudes about homeownership and future investments and how we can help prepare them for success. Here are some trends among Millennials: -The National Association of Realtors Trend Study of 2014 found “8 out of 10 recent buyers considered their home purchase a good financial investment, ranging from 87 percent for buyers age 33 and younger, to 74 percent for buyers 68 and older.” -Lawrence Yun, the Chief Economist and Senior Vice President of Research at the National Association of Realtors, said the Millennial generation, which is under the age of 34, is now entering the peak period in which people typically buy a first home. “Given that Millennials are the largest generation in history after the baby boomers, it means there is a potential for strong underlying demand. Moreover, their aspiration and the long-term investment aspect to owning a home remain solid among young people,” he said.  “However, the challenges of tight credit, limited inventory, eroding affordability and high debt loads have limited the capacity of young people to own.” -Although Millennials have a much greater talent for navigating technology and social media, they are far from educated about credit and scoring.  The Fourth Annual Credit Score Knowledge Survey done by the Consumer Federation of America found that this generation falls short in credit knowledge.  About half of Millennials surveyed never pulled a copy of their free annual credit reports whereas with older adults, about 80% use free annual reports to view and learn about their credit.   When individuals are unaware of what is on their credit profile it is less likely they will have a curiosity about how credit works.  Many Millennials do not even know what kind of information is posted on credit profiles or how scores are tabulated. How can we help these individuals & gain referrals? We can send information relating to Millennials to our referral sources as well as our current, potential, and past clients.  This information will be really valuable to Millennials and also help us gain them as loyal customers in the future. For referral sources, they will appreciate good quality info that they can use to enhance their reputation and gain referrals and trust.  In addition, our current customer base will appreciate our interest in helping those they care for, which will give us an opportunity to expand our business and build a great reputation. Here are tips on credit and scoring to share with Millennials: -Order your free Experian, Trans Union, & Equifax credit reports once a year at www.annualcreditreport.com and learn about what is on your credit reports. -If you purchase the scores offered on the annual site understand they differ from FICO scores.  FICO scores are the scores used by most lenders to evaluate a borrower’s ability to pay back loans. -FICO scores can be purchased at www.myfico.com. -Paying a credit card, car loan/lease, student loan, store card, mortgage, or overdraft protection late can drop credit scores hundreds of points no matter how small the amount owed is. -Starting to build credit at a young age can add many points to your scores as the credit ages. -FICO scores over a 680 could save many mortgage applicants $100,000 or more over the life of a mortgage loan depending on the size and type of mortgage.  A 740 FICO score and above is considered excellent credit. -Credit scores take time to build and improve so starting early is extremely important. -Co-signing or signing for a friend or loved one’s cell phone, credit card, lease or loan can extremely damage credit scores for years to come and alter your ability to get loan approvals. If you have no control over paying the bill or are not comfortable paying the debt if it defaults do not sign up for it.  -Being added on as an authorized user to a parent or trusted friends old credit card with an excellent payment history can add points to scores since it increases the average age of credit.  Beware of being added on to maxed out cards. ​ Feel free to reach out to us at 877-292-0656 f you have any credit questions or reports you would like reviewed!

The Truth About Credit Scores

Few credit related topics confound, confuse, and befuddle consumers like the subject of credit scores.

Popular television commercials, misinformed advice columnists and pretend credit experts are notorious for suggesting that consumers have only one credit score. Nothing could be further from the truth. The reality is consumers don’t have just one credit score but hundreds of different credit scores.

Equifax, Trans Union, and Experian are the three major credit bureaus that are responsible for maintaining data on more than 600 millions U.S. consumers about their credit management habits. The credit bureaus compile this data into credit reports and sell the information to lenders, insurance companies and even to consumers.

Credit scoring models are used to interpret and analyze the data on the credit reports housed by the credit bureaus. VantageScore and FICO are the two companies that produce credit scoring software used to calculate the most common credit scores. The credit scoring models designed by these two companies are similar, but they are certainly not identical and will certainly generate different credit scores for any given consumer.

At least 70 credit scores

To add to the confusion, there are different software versions for every credit scoring model that is commercially available. Under the FICO brand/umbrella there are about to be somewhere around 65 different scores available for purchase and use by lenders.  Under the VantageScore brand there are nine.

Counting just the credit bureau based credit scoring systems there are well over 70 different scoring models, which means you’ve got at least 70 different scores.

In addition to the credit bureau based scores like FICO and VantageScore there are countless other credit scores being used by lenders and insurance companies. Most of these companies will use custom developed scoring models that consider both credit report and non-credit report data, like information from an application.

These “custom application scores” are actually much more common than FICO and VantageScore credit scores. Most large lenders have several of these models in use at any given time.

Consumers almost always neglect the large number of non-risk scores that are being sold by the credit bureaus to lenders.

These marketing scores often measure the likelihood that you’ll respond to a credit card offer, leave for a competing lender, and generate a positive revenue flow. While these scores are not as commonly used as risk scores, they are still fairly common.Keeping track of the hundreds of credit scoring possibilities would be exhausting and is nearly impossible. Most of these scores aren’t even available for consumers to obtain under any circumstance.

Keeping track of so many scores

Keeping track of the hundreds of credit scoring possibilities would be exhausting and is nearly impossible. Most of these scores aren’t even available for consumers to obtain under any circumstance.

Having said that, there is still an effective way for consumers to control their credit scores. Credit scores are based on the data contained in a consumer’s credit reports, nothing more and nothing less. By controlling the information contained on your credit reports you can effectively take charge of your credit scores.

If you pay your bills on time and maintain modest amounts of debt then you’re going to have a good score regardless of the brand or the model. If you miss payments or get into too much credit card debt then you’re going to have poor credit scores.

The bottom line is that it’s much easier to manage the data on three credit reports than it is to chase around hundreds of credit scores.

For more information regarding your credit status, please feel free to reach out to the credit experts at Precision Credit Restoration at 877-292-0656.  Let us guide you from financial distress to financial success.

Credit Repair Is Scary

Credit Repair is scary. The truth is creditors have done a great job of creating smear campaigns convincing consumers that there is nothing that can be done to fix credit.
The truth is, it is the creditor’s OBLIGATION to validate hundreds of points upon your request.

Even if the item is being reported accurately on your credit report, if the creditor can’t validate compliance with hundreds of laws then you might have the necessary leverage to have those items removed.

Your creditors use your credit bureau as leverage to force you to pay them. We go after your creditors on your behalf and find their violations, then use those as leverage to force them to remove the item.

Creditors prey on you not knowing your rights or the laws put in place to protect you.
When all three credit bureaus and your creditors start receiving our compliance request, in most cases they simply delete the item versus deal with hours of debt validation and threats of legal action and FTC complaints.

We KNOW what they can and can’t do, and we KNOW which laws they commonly break. We use this knowledge to gain leverage and get them to voluntarily remove your negative item. 

Let us help you ease some of the fear and guesswork out of the process and take us up on our offer of our FREE Credit Repair Swipe File. This swipe file consist of proven dispute letters that has generated the removal of thousands of negative items from credit reports. 

Why Credit Scores Are Different

Yes, there are MANY different credit scores out there.  There are credit scores consumers can pull themselves through credit monitoring, mortgage scores, auto scores, and many more.

There are actually over 16 different credit "scorecards" that exist today. Each of these scorecards will reflect different credit scores. These scorecards are designed to help particular industries better gauge credit risk.

The mortgage industry for example is more concerned with a consumers past mortgage history than anything else. So they weight home loan history heavier into the total score calculation than other accounts.

So a consumer’s credit monitoring score might be 660. But then when they apply for a mortgage, their score might be much lower due to some past negative mortgage accounts on the report.  Their mortgage score might even be higher than their consumer score, if they have past positive mortgage accounts.

A credit score that a consumer pulls themselves will not be the same as their mortgage score.  Their mortgage score won’t be the same as their auto score that car dealers pull either, because the auto score weighs past auto history heavier into the score makeup versus consumer scores. 

These different credit scorecards are designed to help specific industries better determine risk.  Due to there being so many industries that offer credit, there are also just as many credit scores available. 

Plus, different scores are offered by different companies creating even more credit scores. FICO is the biggest provider of consumer credit scores. But now even the credit bureaus themselves are in the credit scoring game, providing their Vantage score.

A Vantage score has scores as high as 990, while a FICO score can only be as high as 850.  So even though a 700 FICO score reflects good consumer credit, a 700 Vantage score reflects below average personal credit.

One thing is for sure; credit scores WILL be different based on who pulls the score and where the score is pulled through.

Still good credit is good credit. And fundamentally any consumer who pays their bills on time and has a good long-standing credit history, including a lot of different accounts, will have a good credit score.

Please feel free to contact Precision Credit Restoration at 877-292-0656 for a free consultation and to answer any questions you may have concerning your credit status.  We are here to guide you to a brighter financial future. 

"Make Precision Your Decision"

Late Payments On Mortgages = A Recipe For Credit Destruction

When purchasing a property or looking to refinance an existing mortgage individuals may not realize how destructive one new mortgage late payment can be to achieving their current financial and personal goals. Even if the individual has a 720 plus Fico score it does not mean instant mortgage approval. Most lenders do not want to see late payments on an existing mortgage for 12 months prior to loan application. If recent late payments occur, individuals can find themselves in a frustrating position with nothing but a dead end or exorbitant interest rates in sight. 

For example:

Richard, a high powered executive earning a great income is looking to purchase a second home at the beach for his family. He has always had excellent credit and scores as well as a great history with his current mortgage. Recently his loan changed service providers and when he received a letter in the mail that looked like promotional junk, he shredded it before even opening it. Three weeks passed and as usual the payment was made to what he thought was his mortgage servicer and he assumed all was well. Of course the payment went out to the old service provider and by the time he learned of his mistake he already had a late payment updated on his credit profile, dropping his Fico score from an 840 to a 720.  Although his credit score was good the recent late payment caused a rejection for loan approval. His banker advised him that he would either have to wait for the late payment to age 12 months or call us for credit restoration.

Of course Richard, being the highly intelligent and responsible person that he is, immediately called the service provider to complain and demand they remove the late payment from his credit.  After hours of fighting and no resolution in sight he gave up and reached out to us for help. Conversing with the creditor for hours, as Richard did, could make our job much more difficult since we do not know what words and information was exchanged to the service provider. Just like any legal  

battle whatever is said can be used against you! It is always better to contact us prior to the client reaching out to the creditor. 

Another example:

Janet, a school teacher earning a nice salary, decided it was time to buy a condo of her own. She was working with a realtor friend looking for a property in a city close to Manhattan.  Finally she found her dream place after a few months and connected with a banker to start the process for loan approval. Her friend had asked her to buy her Fico scores at the MyFico site prior to searching for a property just to make sure she was in the best position for getting loan approval.  Her score came in at a 780 so both were confident of a graceful loan approval once the right property was found.  She contacted a banker who pulled her credit scores to find they were a 650.  After deeper evaluation it was revealed that Janet had co-signed a mortgage to help her brother 7 years ago.  He had a landscaping business and did not show a majority of his income.  Since he could not be approved for the loan on his own she decided it would only be right to help him out. However, unbeknownst to her, her brother had been having problems paying his mortgage and decided to try to short sale his property. He was told by a friend that if he was late on his mortgage he would have a better chance of getting the bank to approve the sale. He had been late for the past three months.  After this information was revealed Janet learned not only would she be rejected for the loan and purchase of the Condo due to a drop in credit score and a recent 90 day late on a mortgage, but her income would no longer qualify for loan approval. Since the bank viewed the co-signed loan as her debt it diminished her ability to qualify for the amount of mortgage she would need to buy the condo she wanted. Her income was not enough for the lender to justify her ability to pay both mortgages.

There are many situations where consumers wind up with mortgage late payments including, tax increases (when taxes are paid by a bank and included in monthly mortgage payment), divorce issues, payer out of the country or in the hospital, wrong checking account number updated in auto pay, and more. 

Here are Fico disclosed score reduction predictions for mortgage lates:    
     

After a 30 day late payment:  

720 Fico score could drop to a 630-650

780 Fico score could drop to a 670-690

After a 90 day late payment:  

720 Fico score would drop to a 610-630

780 Fico score would drop to a 650-670

When comparing 90 day lates on a mortgage with what happens to scores after a foreclosure the 720 drops to a 570-590 and a 780 score drops to a 620-640.  

The difference between the damage a 90 day late on a mortgage payment and a foreclosure deliver to a 780 Fico score is minimal!  This just reflects how damaging a 90 day late payment on a mortgage is to credit scores.

Call us with any questions  at 877-292-0656 or feedback on credit challenged clients or credit in general!

The Truth About Dispute Statements/Notations On Credit

In the past few years financing rules have become more rigid when it comes to consumer dispute notations on credit. What is a consumer dispute notation?  When a consumer disputes information on credit a dispute note will be placed on the account in question. Initially, when a negative account is disputed it may very well be taken out of the score formula or at least cause increases in credit scores until verification by the creditor and the credit bureau is complete. 

This also applies to good accounts that have been disputed. If the account is a positive trade line the pending dispute could have the opposite impact and reduce scores. When the initial verification is complete the account will either be corrected or verified as accurate. At that point the dispute notation will be removed and the account will then be fully factored into the score. If the consumer continues to dispute the account after the initial verification a notation is placed stating the consumer disagrees and disputes the information on the credit report. This can also alter the score.  

Most loans will not be approved by a lender or will be kicked into manual underwriting if a consumer dispute notation is pending or unresolved on credit. Lenders are very aware of how these statements can change scores and most have rigid restrictions about what they will accept when approving financing. Most mortgage professionals are aware that a consumer dispute notation can inhibit their ability to get a loan closed but don't really know why.

Lenders want to price loans correctly with the level of risk the borrower reflects. An accurate score prior to pricing and extending financing is their primary concern which is why removing and/or resolving consumer dispute notations on accounts prior to getting a loan is so important. 

A high quality credit repair company will explain this to loan officers when they have completed changes to an individuals credit and will remove any dispute notations before giving the applicant approval to begin the mortgage process. Unfortunately, there are many dispute factory type credit repair companies out there and even consumers that randomly dispute information with no strategy or foresight into how these dispute notations will impact the loan application. Mortgage professionals need to make sure the lender will approve financing if they plan on submitting an application with these open statements on credit.  If a loan officer pulls a credit profile and sees consumer dispute notations they should make the applicant aware of the need to have these notations removed or resolved.  In many cases it is quite difficult and confusing for the layman to address these issues on credit. Feel free to reach out to us for assistance.

Call us  at 877-292-0656 with any questions or feedback on credit challenged clients or credit in general!

Making sure credit is analyzed with future real estate purchases in mind is a MUST before taking an action that can foil those plans and limit a consumers options for a better quality of life. 

"Guiding you from financial distress to financial success"

2014 Brings Higher Rates And A Need For The Best Credit Scores

As 2014 unfolds we are seeing higher rates and pricing on financing. We are also seeing a resurgence of subprime lending. So although it seems most loan applicants will be approved for financing, many may be paying much more due to higher rates and points. If an applicant's scores are under a FICO score of 740 pricing could be substantially higher. When costs increase something has to give, and this may very likely be a reduction in the loan amount.  Since it is a sellers' market these days and inventory is down buyers must arrange to get the best pricing and interest rates to afford the loan amount needed for purchasing a property.  Sellers want to know that they are dealing with a viable buyer before taking their home off the market.  Preparing credit, income, and debt ratios well in advance could make the difference for purchasing a bigger/higher priced home and living in a more desired area with a preferred school district. 

Realtors, bankers, CPAs, and financial planners should educate their potential and current clients about these changes and how to put their best foot forward when getting ready for a real estate purchase.   Buyers must lay the ground work well in advance by building the best credit scores and correcting any errors, delinquencies, or balance discrepancies reported that are interfering with their credit score goals.  Understanding the rules and having the right professional take control of the credit repair/education process equals happier buyers and more closings. 

With the CFPB cracking down on credit bureaus, creditors, and banks, many dispute-factory type credit repair companies are finding less and less success for their clients. These credit repair companies are churning out factory-type letters to dispute credit, and in turn the bureaus have become much more sophisticated and smarter to combat it.  Since we use a sophisticated and unique individual credit repair strategy for every credit profile and account our success ratio continues to be excellent unlike the other credit repair companies.   

Besides changes in rates and pricing, many bankers are experiencing road blocks to loan approval when the bank finds open "consumer dispute statements" listed on credit accounts.  Banks do not like "consumer dispute statements" on credit since it means the account in question is taken out of the FICO formula, leaving the bank with a false score and therefore no real sense of the loan's risk. This is why banks want these statements removed or resolved before loan approval is compete. There are a few reasons why these dispute statements remain on credit.  First, if an unsophisticated credit repair company was hired to dispute information on credit with the bureaus they usually have limited success and whatever accounts remain on credit may still reflect an open dispute status. These companies don't always take the time to remove the open dispute statements. Another common reason is that some consumers try to fix their own credit and due to limited knowledge are usually unsuccessful and the consumer dispute statement is never removed.

Feel free to reach out to us at 877-292=0656 if you have any credit questions or reports you would like reviewed!  

"Guiding you from financial distress to financial success...so Make Precision Your Decision" 

New Score Model To Be Introduced To Help Some Credit Scores But Doesn't Mean It Will Be Used By Mortgage Lenders

	New FICO 09 Score Model Will Be Introduced in the Fall, but why Won't Mortgage Lenders Be Using It?

FICO, the leading credit score model used by lenders and creditors, announced the new FICO Score 09 model which will be released in the fall.  The model will be used at the consumer myfico site and possibly by car lenders and credit card grantors.  Amongst other changes, the major difference for this score is in medical collections. Under the current models used by most mortgage banks, medical debt collections can be very damaging to consumer credit scores.  Medical collections are popular causes of credit score drops that occur for a variety of reasons.  A recent study by Trans Union revealed that 54% of insured individuals are confused about medical bills. Credit scores can drop hundreds of points from one collection, and most people do not understand how easily they can be put in this vulnerable position.    However, the new FICO score will place less emphasis on this medical debt. People with medical collections that are paid off will see the highest raise in their credit score, and those with unpaid collections will see some damage lifted off their report. According to FICO, consumers who solely have unpaid medical debts as major derogatory references could see a median score increase of 25 points. Even though this sounds great for people with medical debt, they will not be in the clear after this summer if they are looking for mortgage approvals. FICO’s last version, FICO 8, was released in 2008 and has only recently been adopted by a small amount of lenders. To date the majority of merged credit reports we view from mortgage banks use the FICO 4 , 5, and V2 models.  Banks tend to be very conservative with lending, especially for large loans like mortgages. Just because a new score is out doesn’t mean it will be used by mortgage lenders, and it is highly unlikely that banks will adopt a credit score which ignores unpaid collection accounts. Mortgage professionals and realtors must educate their referral sources and clients since many may assume if they wait until the fall their credit scores will increase and they will be approved for loans at lower pricing.  This could cause buyers and refi applicants to avoid fixing their credit and wind up delaying transactions only to be disappointed and frustrated. Fannie Mae and Freddie Mac are still using the older versions of the FICO score models in their own underwriting software. Fannie and Freddie have not expressed any intention of changing to the newer less conservative models but said they were confident in the tools they currently use. Unfortunately this will cause confusion in the fall. When ordering FICO score from the consumer site, individuals have to be mindful that it may be even more inflated than the past FICO 8 version was. Individuals must understand the myfico site model does not accurately reflect what lenders see.

Having Many Credit Cards And Accounts Can Decrease Scores For Some While Improving Scores For Others. How Can This Be?

HAVING MANY CREDIT CARDS AND ACCOUNTS CAN DECREASE SCORES FOR SOME WHILE IMPROVING SCORES FOR OTHERS. HOW CAN THIS BE?

When it comes to credit scoring, many score reactions are a paradox. What might increase scores for one individual can actually reduce scores for many others.  Having a variety of credit with a nice mix of credit cards, store cards, mortgage accounts, student loans, and car loans/leases over long periods of time can build a strong credit portfolio and high scores. When a consumer has a well-rounded credit portfolio with aged accounts that have stayed current it reflects great credit management skills which adds points to the credit scores. Juggling and building a lot of credit over long periods of time, without delinquencies, shows lenders that the credit holder is a responsible and seasoned borrower with a low default risk.  On the other hand, if a borrower has been in the credit game for 6 years and opened 4 new accounts in the past 3-6 months this borrower would be seen as a much higher risk and the scores would be lowered. When a young credit holder (age of credit determined by the date their first account was opened) has doubled the amount of credit accounts within a short period of time it can be viewed as too many accounts and become cause for concern. Since this individual has limited experience managing credit and has doubled his accounts the score must reflect their new greater risk of default. Naturally scores will be lower.  For example: Let's take consumer A&B and have a closer look at exactly what their credit reflects: Consumer A is 53 years old and has been developing credit for 35 years.   Her FICO Score is an 820 which is amazing and she has never had a delinquency. These are the accounts on her credit report: -  14 open and active credit cards including store cards, master, visa, and amex.  -  Credit card limits equal to $120,000. -  3 closed credit cards that were opened over 28 years ago . -  A balance-to-limit ratio on revolving credit of 5%    -  A current mortgage that was opened 8 years ago.    -  A closed mortgage that is still showing on her credit report that was opened 26 years ago. -  3 car loans/leases that are paid and closed. -  1 current car loan that was opened  3 years ago. -  No third party credit reviews in the past two years.     Consumer B  - a 29 year old who has been developing credit for 6 years.  His credit FICO score is a 620 and he has no delinquencies. The accounts on his credit report are: -  7 open and active credit cards including store cards, master, and visa cards. -  3 of the cards were opened 5-6 years ago and 4 were opened in the last 3-6 months. -  Credit card limits equal to $10,000. -  A balance-to -limit ratio on revolving credit of 20%. -  1 auto loan opened 4 years ago . If Consumer B had kept his credit accounts down to only 4 (excluding the 4 new credit cards) his score would have been anywhere from a 680-710. When applying for a mortgage the difference between a 620 and 680-720 could mean enormous savings on fees, insurance premiums and interest rates, or the difference between being rejected or approved depending on the loan.  For this individual going from 4 to 8 accounts in 6 months signified too many accounts for his credit level and dropped scores dramatically. But for Borrower A, the credit experienced individual with many years of developing varied types of credit, the 16 open and active accounts are not reflective of too many accounts on credit and delivered amazing credit scores showing a low risk of default. Using a strategy for developing healthy credit scores and variety of credit with a timeline of your goals can make a world of a difference for your success. Feel free to reach out to us if you have any credit reports you would like reviewed or any credit questions! You can contact us at 877-292-0656 or email us at info@precisioncreditrestoration.com.