A “hard” credit inquiry occurs when you apply for a credit card or loan. This is different from a “soft” inquiry which is part of a background check or pre-approval and does not affect your score. If you apply for several loans or credit cards in a short amount of time, lenders will suspect that you can’t qualify, you may not get the credit you need, and your credit will take a hit.
Your credit usage, which is represented by your Credit Utilization ratio, is calculated by dividing the total revolving credit you are using by the total of all your credit limits. If the ratio is above 30%, it will start to hurt your credit score. Paying off credit cards can begin improving your credit score quickly.
Making on-time payments to your credit cards and other accounts (such as utilities, mobile phones and vehicles) is one of the easiest steps to fixing your credit. Consecutive late payments will negatively impact your credit score; however, by paying on time, your score will eventually improve. Late payments on utilities, rent, and phone bill may also have a negative impact.
We’re here for you! If you’re struggling to rebuild your credit, we want to help you. Contact us today!