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Personal Finances / Credit Cards and Consumer Debt
|Subject: Re: Shotgunning a credit report||Date: 8/22/2008 3:46 PM|
|Author: Mark12547||Number: 277528 of 309185|
Bull, bull, bull, after five times there is no further effect on FICO.
There are different scoring methods, even several that are called FICO. Even within a given FICO scoring algorithm, there are zones where different factors have different weights.
Generally, all car inquiries within 15 days or all mortgage inquiries within 30 days count against the FICO score as if it were a single inquiry.
The problem, however, is that these inquiries must be properly coded. If they are miscoded (consumer installment loans instead of car loans, for example), each one can lower the credit score. I am told that when a car dealer sends a credit application to a bunch of lenders, it isn't that unusual for half of them to miscode the inquiry.
Even when coded correctly, some scoring models might not "lump" multiple inquiries for a car or house loan as one inquiry for scoring purposes, or a manual or automated review might specifically look at the number of inquiries in addition to the credit score.
Even in the best of circumstances, 25 inquiries are excessive, and adverse impact based on the credit score should have caused a letter to be generated to inform the borrower of the credit bureau(s) involved in coming up with the adverse action (in this case, the increased interest rates from the dropped scores).
I hope the court case succeeds because we don't need shady car dealers needlessly driving down people's credit scores.
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