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.