Today I am going to discuss why your credit score decreases when you apply for debt.
The reason why I am making the video is get the truth to the consumer and then let the consumer make the decision with the accurate information.
There is a lot of inaccurate information regarding this topic, because loan officers exaggerate the effect of a credit pull, so consumers get paralyzed in their decision making process and stick to the original loan officer.
When you apply for debt, the bank or lender has to do a hard inquiry that stays on your credit for two years, but has no effect after one year.
Credit scores are essentially the odds that you will have a 90 day late payment from today. When you apply for debt, the odds you will be late increase, because historically some people are about to be late on debt when looking for new debt.
For consumers with excellent credit, that have never been late, the impact is very small to check for credit. If you have troubled credit, looking for new credit has a much greater impact on the credit score.
No matter what credit score you have, you should always compare lenders to make sure you are getting all the information and possible loan products.
If you have any questions please call me at 617-529-9317