How much does your score lower when your credit file is opened with no purchase?

[Anonymous]

Hello.  I wanted to know, how much is your credit score actually lowered if you look into financing a car, but decide not to do so?  I know there is a 2 week window, or something like that, but what if you decide not to buy anything within that window?  How badly does this effect your credit scores?

I plan to buy something in 4 or 5 months, but I'd like to see what kind of rates I might get now so that I can plan ahead better.

Thanks!

[llecs]

Inquiry damage is overrated. Most people see up to 10 points lost when their scores are above 700 and if they go from 0 ot 1 or 1 to 2 inquiries. Prior to EX doing what they did, I would pull all of our FICO reports immediately before and after to see the score change. On EX I have over 30 inquiries. Of the last 20 inquiries leading up to EX's departure, I had no score change at all. On TU, with socres in the upper 600s, I've also gone from 0 to 1 and 1 to 2 without any score change.

Many see a drop after applying, but the damage usually is mistaken for the new TL reporting associated with the inquiry, which dings many around 20 points.

[moondog7324]

I wouldn't tinker with inquiries- just to see if your pre-approved. The result may hurt you in failing to get financing because of too many inquiries. If your planning on getting a car in 4 months- work on getting your credit card utilization down (if you haven't already) thast the easiest way to improve your scores. Pull your reports and consider disputing some items- but warning- this may actually lower your score in some instances. Example- disputing an old Chargeoff- they update and it is seen as a recent chargeoff.

[Anonymous]

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Many see a drop after applying, but the damage usually is mistaken for the new TL reporting associated with the inquiry, which dings many around 20 points.

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Thanks for the info.  But what does TL stand for?

[Anonymous]

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Example- disputing an old Chargeoff- they update and it is seen as a recent chargeoff.

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What is a chargeoff?

Also, I have a lot of CCs that are empty and I don't use.  (Especially store cards that I got only for the "open an account now and we'll take 20% off your purchase" deals at Macy's/Sears/Target/etc)  Would it be good for me to cancel a lot of these accounts that I don't use?  

[moondog7324]

TL = tradelines

DO NOT close open accounts (unless your paying fees to keep them- and thats a delicate subject)

Keeping an account open makes the Average age of your accounts longer-

Utilization is the amount of the credit limit you use- most people suggest keeping it between 1 to 10%- definitely under 30%. for example if you have a card with a 1000 credit limit keeping it around 100 dollars or less is very good- having it report a 800 balance (80%) is very bad.

It's ok to keep cards and not use them- I reccommend using each one every other month or so- just so they show activity- pay in full if you can so you don't pay interest.

Chargeoff is when a credit card hasn't been paid- I believe after 180 days(i'm probablly wrong on the time period) it's labeled as a chargeoff- It doesn't mean they can't collect or sue- its just bad on your reports. Example I had a 4 year old charge off that was reporting- I disputed it and they updated- now it looks like the chargeoff occurred last month.

If you haven't go to www.annualcreditreport.com this is the free report from each agency you are entitled to every year. Not to be confused with the ones that offer service for a fee. Go over your report and see what it shows.

Message Edited by moondog7324 on 03-07-2009 01:06 PM

[Anonymous]

"Example- disputing an old Chargeoff- they update and it is seen as a recent chargeoff. "

This is not true and it is also illegal. A creditor cannot update last activity date simply because you dispute its validity. I'm not saying this has never happened, but if it does, you can sue under the FCRA.

Message Edited by Heimlur on 03-20-2009 08:12 PM