[CuriousReader]

I was told that checking your credit rating will lower your score. Is this true? Even if I check my own rating?

Thanks

 

[onomatopoeia]

It shouldn't.

When I have gotten mine it gets listed in the column of people who have accessed the information (for updating their data), not the column of people who have done a hard check on my credit.

 

[The_Number]

No. (Like onomatopoiea said.)

 

[csplice]

If you check your score it will not be lowered.

If a lending institute checks your score it will be lowered by a couple of points.

Rather than get my own report again via the free method (which I do every couple of years) I asked a friend in the bank industry to get me a copy of the report that lenders see. It is slightly different than the free version. It was this person that explained the point system to me.

 

[CuriousReader]

If you check your score it will not be lowered.

If a lending institute checks your score it will be lowered by a couple of points.

Rather than get my own report again via the free method (which I do every couple of years) I asked a friend in the bank industry to get me a copy of the report that lenders see. It is slightly different than the free version. It was this person that explained the point system to me.

Could you enlighten us with the explanation of the point system?

Also a question:
I have a PC MasterCard that has ridicolously high limit, I am nowhere near using 10% of that limit per month, is it better to ask them to lower my limit, or is it better to keep it high - for credit rating purposes?

Thanks

 

[csplice]

The conversation about the points system didn't go beyond what is typically known with regards to the poor-good-excellent range. The enlightening part of the conversation was that a mortgage and a HELOC are treated totally different when it comes to credit score. A 100K mortage barely affects your score, where a 100K HELOC has a significant impact. The why was not clear to either of us, and the how much is dependant on the rest of your financial picture.

IMHO your limit is too high based on your usage. There are several good reasons to keep your limit low. The main one is that it affects your TDSR (total debt service ratio). TDSR is a number the banks use to determine how much debt you can support. For credit cards they use the limit of the card not the balance on the card. For every dollar you have in available credit on you credit card is a dollar you can not borrow for a house/car/investment loan/etc. As for your credit rating being affected by your credit card limit I would assume the lower the limit the better the score.

 

[CuriousReader]

Thanks, I thought so too that it's better to have lower credit limit - but someone told me before that it's also a good thing when I have high credit limit and maintain the payment all the time.

Anyone else have advice on whether high or low credit limit on credit card is better?

 

[MoneyGal]

Another factor is your utilization ratio. Here's an article on credit card limits, balances, and the impacts on your credit rating. (Full disclosure: I wrote the article.)

 

[CuriousReader]

MoneyGal's article pretty much reinforced that keeping the limit high is a good idea - now I am confused

 

[Shayne]

It is impossible to figure out the best way to boost your score as it is a proprietory formula they use.

If you pay your debts on time and have a history of credit your score will be fine.

 

[dcaron]

I was told that checking your credit rating will lower your score. Is this true? Even if I check my own rating?

Thanks

You are allowed to order your credit report from the two main agencies (TRANSUNION and EQUIFAX) twice a year, to review it and ask for corrections. This is regarded as a SOFT lookup with no effect on your score. Asking for any type of loan is a HARD lookup and will affect your score. Shopping for car insurance and calling several insurers will show up as SOFT lookups on your CREDIT report.

There are a ton of articles on the net on how to increase your score. Not missing any payments is key, as well as job stability (how long you keep your jobs), dwelling history (how often you move), your debt/income ratio (hopefully under 40%), etc.