are a few questions you need to ask your lender.
Most banks and credit unions want to help you, but
some are unintentionally, (I hope) damaging your credit.
FIRST: "When you pull my credit report, will
you tell the credit bureau the purpose or reason
for the inquiry?"
Any answer other then YES and you should start to
worry. (This question should also be asked before a
car dealer pulls your report)
Fair Isaac (FICO) says that 10% of your score is based
on inquiries. If the credit grantor is not telling the
credit bureau why you are applying, FICO can not
score your credit file correctly.
Go to another institution!
_ _ _
SECOND: "Will you report my account to the credit bureaus?"
YES, is the answer you want to hear.
There are three national repositories, Experian, TransUnion
and Equifax. Most local banks and credit unions in Central
Illinois report their accounts to Experian
If they say NO and you plan on paying your account on
time (as agreed), get up and go to another lender.
FICO says that 75% of the credit score is based on how you
pay, what you owe and types of credit you have.
If your creditor does not report your good payments,
40 to 60 points are not being added to your score.
_ _ _
The next question should be asked if you are applying for
or already have a revolving account, line of credit or home
equity line of credit.
THIRD: "Do you report, to the credit bureaus, the
Line of Credit or Credit Limit?"
Yes, should be the answer.
FICO compares the Balance on your account to your Line
or Credit Limit.
If the creditor does not report the Credit Line or Credit
Limit, FICO uses the highest balance as the Line of Credit.
The more you owe, over 40% of the Line of Credit, the
more points FICO deducts from your score.
"Do you use Credit Scores to accept or
There is no right or wrong answer here.
Not all banks and credit unions, use credit scores.
Some, still use the time tested system called the "Three Cs:
"Character, Capacity and Collateral, to make a decision.
It is just nice to know if they will make the decision based
on you or if they will use a mathematical formula.
_ _ _
This next question should be asked, only if they use a
credit score to make the decision or if they use a score to determine the
interest rate. Yes, some banks and credit unions use the credit score to
decide what interest rate they will charge you.
FIFTH: "Have you ever attended a class or seminar explaining credit scores?"
If the answer is NO, leave, and go somewhere else!
Really, do you want a loan officer who doesn't understand
credit scores, making a decision on your loan, based
on a credit score?
_ _ _
The last question you may wish to ask is:
SIXTH: "Do you get your reports locally or do you
get them from a credit bureau, out of state?"
If your bank or credit union answered YES to this and
the other questions, they are helping your credit report
to accurately reflect your credit score and they are
probably pulling their reports through us.
KCB Information Services is the only local full service
Credit Bureau in Central Illinois.
We have been providing credit reports to financial
institutions, other businesses, land lords, municipalities
and employers credit since 1928.
We offer programs and classes on credit reports, credit
scores and I D Theft, for service clubs, employers and
We can review your credit report and, if possible, we can
tell you how you can increase your credit score.
Call us today: 309-696-1890
Money Smart Week classes on credit reports are free.