Credit Scores - Fact or Fiction Part 2

Real Estate Agent with Coldwell Banker Gundaker-St. Louis, MO

Credit Scores - Fact or Fiction  Part 2

Fiction:  There are 6 inquiries from “Mortgage Services” on the credit report all on the same day.  Did your credit really get pulled 6 times in one day? 

Fact:  No.  Typically, mortgage lenders order a tri-merged credit report for each borrower on the loan.  The bureau is required to display a “footprint” of each bureau from which credit was requested for each borrower on the loan.  So, if you have 2 borrowers on the loan, and you order a joint or individual credit report for each, you will see 6 footprints, 3 bureaus for 2 customers.  Although you will see 6 footprints, it will only register as one inquiry for each customer. 

Fiction:  Paying old collection accounts will improve my credit score.

Fact:  In most cases, paying an old collection account will not increase your credit score.  It is more likely to decrease a customer’s credit score because a collection is viewed the same, whether it is paid or unpaid.  The difference is the last activity date.  The older the date, the less impact it has on the current credit score.  If old and the collection is paid, the last activity date is updated and now the account is viewed as recent and will have a negative impact on the overall credit rating.  More weight is given to the recent accounts on the report. 

Posted by



Linda Graves Arnold, ABR, CRS, GRI, e-PRO
Coldwell Banker Gundaker
"Bringing Families Home"
Cell phone:  314-422-2762
Office:  636-391-1122


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Ann Christopher
Crye-Leike Brown Realty - Jamestown, TN

Thanks for this information, Linda! I was under the assumption that paying collection improved credit scores. I wasn't aware that the date of the activity, whether good or bad had a negative effect on scores. myrtle

Jan 26, 2011 02:06 PM #1
Billie Hillier - North Las Vegas, NV
Savvy Home Realty Solutions

Great informtation on credit scores!

Jan 26, 2011 03:05 PM #2
Ellie Penaranda
239.776.5077 Downing-Frye Realty - Naples, FL
Naples Florida Real Estate - Waterfront & Beach Co

Linda, a great subject to cover.  I find a lot of people are still very confused about how credit scoring happens.  And addressing "Paying old collection accounts" is definitely one that needs to be repeated regularly.

Jan 26, 2011 03:11 PM #3
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Linda Graves Arnold

St. Louis Real Estate Pro - 314-422-2762 - Referr
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