Credit Drop-New Loan

[Syncscott31]

Hello, my name is Synclaire. I have recently noticed a major drop in my credit score after almost a year of it climbing the charts. There is a new inquiry on my loan page but it doesn’t provide any detail and is less than 200$. It also says that I’m not late/behind on a payment, there is just the inquiry. I was hoping to talk to someone in person about the matter and see what exactly the correct steps are to go ahead and pay that off and raise my score again.

[tagteam · Accepted solution]

Get your free credit reports from the site below. The reports should have contact information or at least the name of the firm that made the inquiry.

https://www.annualcreditreport.com/index.action

[Opus 17]

There isn’t anyone at Intuit that you can talk to you about your credit score.  Each of the three credit bureaus offers a subscription service that will give you one of your “official” FICO scores and may provide more specific information about why scores change.

Remember that your credit score is just a crude way that lenders have to evaluate your ability to repay the next loan you apply for.   A credit inquiry will lower your score a little bit because if you are applying for loans, that makes you look riskier to other lenders. Having a need for more credit might suggest that you are in a situation where you have less ability to pay your bills.  Many companies will do “soft“ inquiries on your credit, such as to screen you for an application for a new credit card. A company should not do a “hard“ inquiry unless you’re actually applying for a loan.  soft inquiries do not lower your credit score but hard inquiries do. If a lender has performed a hard inquiry without you having applied for a loan, you should contact both the lender and credit bureaus to dispute the item.

Your credit score can also drop temporarily just from using your credit cards.  If your monthly charges use up more than about 25% of your credit lines, your score will be lower on those days, even if you pay the bill in full every month.  (Your score would be higher on the days when you have zero balance, of course.)  I believe the Turbo app and website update your credit score every two weeks, so if it catches you on a day when you have a high balance and have not paid your bill yet, it will show a lower score until you pay off the credit card.

[Opus 17]

Additionally, each of the three credit bureaus offers you a way to “lock“ your credit report so that companies cannot perform hard credit inquiries. This can protect you from identity theft and can protect you from unscrupulous lenders performing credit checks on you, but it also means that you can’t apply for credit yourself unless you unlock your credit reports first.  You should be able to sign up for an account at each of the three credit bureaus to lock your report without having to pay for an ongoing subscription, although they will certainly try to upsell you on more paid services.

There is also a government mandated function to “freeze“ your credit report.  The difference between a lock and a freeze is too complicated to get into here, the credit bureaus will have FAQs on their websites to explain the difference. Either a freeze or lock will prevent hard inquiries to your account. Remember you have to lock or freeze all three of your credit reports to be effective.