My friend told me that everytime a company does a credit check on me...?

Question

such as fashion bug, my credit score goes down and I could be red flagged for having so many credit checks done. I want to know if he is correct, because everytime I go to fashion bug, the clerk says,"if you apply for a credit card through us today, you will recieve a discount on your purchase." They also say I can apply everytime I shop there just to get the discount. So, should I stop applying just for this discount, when I know my credit sucks. I've also told the cashiers my credit sucks, and they say that's fine.

Answer 1

Your friend is right - everytime you apply for credit your score goes down. You should not apply for credit more than 2 times a year or your score will be greatly affected. When the time comes that you actually need your credit like for a car, car insurance or to buy a home - you will be noted as someone desperate for credit and have difficulty getting a loan or decent rates on insurance. Just remember that your credit is more important than just using for cheap discounts or getting loans - it also dictates your insurance rates.

Answer 2

Every time you authorize an organization to check your credit, you are dinged on your credit score. If a company "inquires" only without your authorization to run a credit report then you are not penalized. If you apply for a credit card to get the discount then you have a separate line of credit for every time you have asked. You should really only have 2-3 credit cards to maintain a healthy debt to available credit ratio. If you have credit cards with available credit (or maxed out limits) of thousands of dollars (more than $15,000) it starts to look bad (unless you have a large income, then the credit limit amount goes much higher before there's things start to look bad).

You should not apply for any more credit cards to get the discount. Don't forget, unless you pay the entire balance off that month then the interest you pay on the amount you owe is usually greater than the discount you got in the first place.

You should probably get a copy of your credit report (you can get a 3-in-1 for $30-35) and see how many different accounts you have and how much the balance is for each of them. You should try to keep your oldest credit account open but close most of the others if you have more than 3 or so. It looks much better on your credit report if lots of extra accounts say "closed by request" instead of saying the account company closed it.

If you have told the cashier's your credit sucks and they say that continually applying for more credit is okay then you know they either have no clue how credit works or they just want the commission or credit for opening another account and don't care if it hurts your credit.

To really get a handle on things you should see a credit counselor and a certified financial planner to get you on track to cleaning up your credit. It takes years before some things can come off your credit report so the sooner you start the sooner your credit will get better.

Good luck!

Answer 3

Yes your credit score is slightly affected everytime you apply for a loan or new credit card, buy a car, etc... Your friend is absolutely correct.

PS: The cashiers get paid $7.50 an hour and don't give a damn about you or your credit. They just blah blah to get you out of there and go on to the next in line.

Good Luck!

Answer 4

That's not true,
There are essentially 4 types of iquires that will show on your reports. Only one of them could have a negative effect on your score.
One type is called "permissible purpose" inquiry. Those are usually employers and life insurance companies that you gave permission by being involved or asking for some consideration of acceptance. These do NOT impact your score.
Two, there are "Promotional" Inquires which are simpley companies that view your credit to "pre-qualify" you for some type of product or account, like credit card companies. You can "Opt-Out" of this list at any time by contacting them directly and requesting to opt-out or by calling [phone] and ask to stop receiving prescreen offers of credit from all potential inquirers.
Then, there are inquiries being made on a regular basis by companies you already do business with. These are the "Account Reviews" They will check your credit regularly to ensure whatever creditworthy criteria they originally required for you to have with them is still intact. Examples are credit card companies you already have cards with. These do NOT impact your score.

Lastly, are the ones that could hurt your scoring. These are extensions of credit that you either applied for, initiated or agreed to at some point. Like, rate shopping our shopping for car insurance.
Sometimes collection agencies will inquire as well. These (and all) inquires stay on your report for 2 years. Too many of these inquires lower your score if the take place within short periods of time between each other.

The general rule is 4 per quarter, but no one knows for sure as each of the three credit reporting agencies are privatley owned corporations and don't necessarily report to each other.
Hope this helps.

Answer 5

That is true. A month ago i was trying to get a credit line and I applied in about four banks, until a realtor told me to stop doing it because every time they check your credit, it goes down and after that i couldn't get anything. I don't really know why it goes down but I suggest you to stop applying evey time they ask you to do it. Remember that you can't do anything if you don't have a good crdit, as a realtor told me, in this country you are nobody if you don't have credit and if yours is sucks as you say you got to start working on it. Look into my own experience.

Answer 6

Yes if there are so many credit check done in short period of time it does affect your credit score. So stop ruining your credit for discount.

Answer 7

If there are a number of inquiries for credit applications, it does hurt your credit score. I used to get a lot of the 'pre-approved' credit card applications. I found out that firms were checking my credit without my request and it was hurting my credit. You can file to prevent them from doing that if it is a problem for you.

Answer 8

Yes your friend is correct. Too many credit checks in a period of time does affect your credit score.

Answer 9

First you should find out if taking her to small claims is worth doing. You are in Atlanta, she is in California, the item is in Ca. you must file in Ca. So you need to either go there in person to file or hire somebody to do that for you, a friend could do it for free. For the trial however you will need to show up in person. How much will that trip/stay cost you? Second, once you win (and you should win) you will need to collect (the court wont do that for you). If she has not paid $200 it is likely that she does not have much of anything for you to collect on. And even if she does you will need to file again with the court to get the Sheriff to sell some of her stuff, that will cost you at least another $100. At this point you are seriously underwater in your collection efforts. I would advise against following this route as you are more likely to end up with less money than you start. What you should do, is get somebody to simply repossess your bike for lack of payment and pick it up whenever you get a chance.

Answer 10

yes he's right everytime u get a hit on ur credit it drops ur score down. and yes u should just stop applying just for the discount.