“Inquiries” on my credit report – what are they?

By Jim Garnett

What Are “Inquiries” On My Credit Report?

Q: Can you explain what an “inquiry” is on a credit report?

A: An “inquiry” is the listing of the name of those who have accessed your credit file information. They have done so to “inquire” about your credit history.

Four Sources Of Inquiries
  1. One source for an inquiry could be a credit grantor that you have given permission to check your credit file in order to receive a loan or a credit card.
  2. A second source could be credit grantors who are checking to see if you qualify for pre-approved credit. The information they access is extremely limited. These “promotional inquiries” show up only on the credit file that you, yourself access. Other lenders do not see promotional inquiries.
  3. A third source for an inquiry can be another authorized user on any of your accounts who wish to check the history of those accounts.
  4. And last of all an inquiry can be generated by you, yourself. Inquiries made by the consumer do not show up on the credit report that others see.
Two General Types of Inquiries

1. Hard Inquiry

A record of a business request to see your credit report data for the purpose of an application for credit. Hard inquiries appear on your credit report each time you complete an application for a credit card, loan, cell phone, etc. Hard inquiries remain on your credit report for 2 years but are only included in your credit score for the first 12 months.

2. Soft Inquiry

A type of inquiry that does not harm your credit score. Soft inquiries are recorded when a business accesses your credit data for a purpose other than an application for credit. Soft inquiries include your request to see your own credit report and employment-related requests. This type of inquiry is recorded by the credit bureaus but does not usually appear on a credit report purchased by you or a business.

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Ask Chuck: Will Closing My Credit Cards Ruin My Credit Score?

Christian Credit Counselors

By Chuck Bentley

Dear Chuck,

My husband and I fell on rough times and as a result, ended up with a LOT of credit card debt. We have prayed, worked hard, and paid it down as much as we can but still have some left. Together we have approximately 15 credit card accounts but only two have balances on them. Would it be best to close the unused accounts or leave them available/open? How would this impact our credit score if we closed them or if we left them open?

Desperately Getting Out of Debt

Dear Desperately,

I’m sorry you have experienced hard times. There is always a good lesson the Lord teaches us through our pain and it sounds like you have been very motivated to escape the trap of credit card debt.

Paying down 13 credit cards so far is excellent! I admire your perseverance and the progress you have made. It is certainly harder paying it off than accumulating it. You now know what Proverbs 22:7 means:

The rich rules over the poor and the borrower is the slave of the lender.

You ask a very good question. Navigating the complicated world of credit scores and reports can be overwhelming. I’m sure you would like to be rid of any reminder of financial pain. Just know that closing your credit cards will not raise your score. In fact, your credit score could be negatively impacted, but we will talk more about that after some explanation.

The Basics

Consider this: If your open accounts have positive credit data, it can stay on your credit report indefinitely. However, zero balance, closed accounts without negative history can remain on the report 10 years from the date the accounts is closed. This allows the positive information to remain longer than most negative information. Bad marks, like late payments and foreclosures, will come off after seven years under the Fair Credit Reporting Act.

High credit scores come from having much more credit availability then you have used. Your balance-to-limit or “credit utilization ratio” is what lenders and credit bureaus are primarily interested in. A low ratio is usually a good credit risk. For example, a $1,000 balance on an account with a $10,000 limit equals a 10% ratio. This is much better than having a $1,000 balance on a $2,000 available limit or a 50% ratio. Thus when you close accounts, your “available credit” is greatly reduced so your ratio will likely increase and your credit score will decrease.  

Understanding Credit Scores

Here are 5 factors that affect your credit score:

  1. Bill payment history: 35%
  2. Credit utilization ratio (balance to limit ratio): 30%
  3. Age of credit: 15%
  4. Types of credit: 10%
  5. Number of credit inquiries: 10%

Once you get to a zero balance, you can close cards because your credit utilization ratio will be zero. If you’ve established good credit, the impact of card closure should be minimal and short-lived.

I recommend that you operate with only one credit card so long as you have the self-discipline to avoid running up a large balance. So, here is my advice for deciding which accounts to close.  

Don’t close these credit card accounts:

  • Any with a balance
  • Your only card with available credit
  • Your only card
  • Your oldest credit card account
  • Your credit card with the best terms

Which credit accounts to close:

  • One that’s newer, not being used, has no balance, but you have another available card
  • One that raises your interest rate or introduces an annual fee
  • One that creditors advise you to close due to identity theft and fraud
  • You have uncontrolled spending and temptation issues

The longer you and your husband can live without using credit cards, the less likely you will depend on them later. Managed wisely, a credit card can be very useful. People typically spend less when using cash and it may be a good idea for you to switch to an all-cash budget for the time being.

Your Credibility Score

While I understand your primary concern is your credit score, the most important asset you have is your character and integrity. By paying down these accounts, you have shown the diligence and strength to do the right thing. Your credibility score is high and pleasing to God.

To avoid mistakes like this in the future and to be prepared should more hard times come, I recommend that you establish an emergency savings account.

An emergency account will grant you the funds for unexpected expenses and prevent you from using your credit card in a crisis. If you have not already done so, open a savings account at your local bank that will be available to you immediately without penalty or cost for withdrawals. This money is for emergency use only.

Begin to save a portion of your gross income using automatic deductions from your paycheck until your fund reaches at least $1,000. Once you reach that, aim for three and then six months of living expenses.

God wants us to save and have extra resources to take care of our families and be in a position to serve Him and others so that He will be made known and glorified. It’s an opportunity to honor Him and experience His blessings.

In addition, make giving your first and most important financial priority. Commit a percentage of your income to tithe, and do it consistently. When you acknowledge that it’s all His, you can joyfully give to His work. It’s a matter of consciously paying Him first and will help you keep your overall priorities straight.

Remember these three basic rules for using credit cards in the future:

  1. Use your credit cards only for budgeted items. If something is not in your budget for the month, don’t buy it on credit.
  2. Pay your credit card off in full every month so you never pay interest.
  3. The first month that you cannot pay off your credit card bill, destroy the card and don’t obtain any others.

Knowing you worked hard to get your debt paid back, I hope you will make every effort to live differently. Aim to do as Paul wrote in Romans 13:8: Owe no one anything, except to love each other, for the one who loves another has fulfilled the law.

If you need expert advice regarding any of these accounts or a debt management plan to deal with your final two credit card accounts, please contact our friends at Christian Credit Counselors.

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3 Common Credit Issues and What You Can Do to Fix Them


Your credit history can determine if you can get a loan, and even where you live or work. Credit scores are built from your credit history and can determine how much you pay to borrow money for a car or house. Yet, many people don’t know where to start when it comes to building, improving, or protecting their credit history. Three common credit problems are:

  1. Lack of enough credit history
  2. Denied credit application
  3. Fraud and identity theft

Below are some tips on how to deal with these issues.

1. Lack of enough credit history

Many people may not know that having no credit history, or a limited credit history, can create issues similar to having negative information in your credit history. If you don’t currently have a credit history, you’re not alone. One in ten adults experiences “credit invisibility,” meaning they do not have any credit history with one of the three nationwide credit reporting companies. Many more don’t have enough of a credit history, sometimes referred to as having “thin” credit, to generate a credit score. People with thin or no credit history may find it difficult to apply for a loan or rent an apartment.

What you can do:
  • Take action to help build your credit history responsibly. There are a number of products considered helpful in establishing or rebuilding credit histories, and they provide you with the opportunity to practice making on-time payments that are reported to the credit reporting companies. These may include secured credit cards, credit builder loans, or retail store credit cards.
  • Use our Building credit from scratch checklist to learn more about these and other ways to build your credit history.

2. Denied credit application

If you’ve been denied an application for a loan or line of credit, there are steps you can take to improve your credit score or dispute inaccurate information on your credit report.

What you can do:

3. Fraud or identity theft

Identity theft occurs when someone uses your name, Social Security number, date of birth, or other identifying information, without authority, to commit fraud.

What you can do:

If you think you’ve been a victim of fraud or identity theft, there are several steps you can take to protect your personal information from being misused. These steps include:

  • Reviewing your credit reports each year to make sure they contain only information about you
  • Immediately reporting any inaccurate or suspicious information on your credit reports
  • Placing a fraud alert or security freeze on your credit reports
  • Consider signing up for identity monitoring or credit monitoring services. Some of these services are free, and others cost money. If you’re considering these services, be aware that there are other free and low-cost services to protect consumers, including a security freeze or fraud alert. If you are considering signing up for identity or credit monitoring services, make sure you fully understand the terms and conditions related to trial periods, fees, cancellation requirements, and other conditions so that you don’t face unexpected fees, charges, or other limitations.

If you were impacted by the Equifax data breach, we have additional information on the steps you can take to respond when your personal information is exposed in a data breach.

Next steps

Building or rebuilding your credit will take time and planning. The steps above can guide you on your journey.

If you want more help, consider talking to a credit counselor. Most reputable credit counseling organizations do provide free educational materials and workshops, though some do not. Building or improving on your credit won’t happen overnight. Anyone who claims to be able to do this for you may be scamming you.

To learn more about credit reports and scores, check out our tips and frequently asked questions.

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Debt Counseling

Debt Counseling Teaches You 4 Easy Ways to Get Out of Credit Card Debt RM

Credit card debt is a problem for people of all ages. Experts say cash-strapped college students often live on credit. Meanwhile, young couples use credit cards for miscellaneous wedding and honeymoon expenses. Retired people often use credit cards to supplement their Social Security income. With debt counseling, you learn about different ways to get out of credit card debt including debt consolidation. According to a recent article by U.S.A. Today, the average family in American owes about $15,000 in credit card debt. Paying off credit card debt once it surpasses your yearly income is especially difficult and feels impossible.

Consolidating debt the right way

Some people open a low-interest rate credit card to consolidate their credit card debt. In many cases, people with low credit scores can’t even get a low-interest credit card. Instead sign up for a debt management program that lets you pay off debt with a specific monthly plan. Your creditors get on board. Most consumers love the fact that they don’t have to negotiate a deal because credit counselors work behind the scenes to help you. If you have credit card debt that totals half or all of your yearly income, a debt management plan is ideal. Your creditors work with the income you have. They often lower the interest you owe and forgive late fees.

Making the minimum payment, for now

Continue to make the minimum payments on your credit card until you get everything set with a debt management plan. Another possibility with debt counseling is that you develop a budget and strategy to pay more than the minimum on some credit cards. The point of paying at least the minimum is to keep your credit score at a healthy level. With debt counseling, you learn all the tricks and tips for improving your score over time.

Asking for a better interest rate

Experts say if you have a credit score of 710 or higher, you can often ask creditors for a better interest rate. Of course, most people struggling with credit card debt also struggle with a low score. Receiving debt counseling gives you an edge because you find out about debt consolidation for a reduced interest rate on credit card debt. Boosting your score is key to better personal finances. Once you reach the 700 or 800 mark, it’s easier to get mortgages, car loans and lower interest rates.

Making two minimum payments a month

Another tip is to make two minimum payments a month on a particular credit card. By doing that, you reduce the balance owed and pay off the debt quicker. Making two minimum payments is a good holding strategy until you can pay off your debt completely with a debt management plan. If you get paid twice a month, you can often budget to make credit card payments with each paycheck.

At Christian Credit Counselors, we help consumers battling credit card debt and desiring a more positive financial future. For more tips on how to quickly improve your finances with debt counseling, please contact us.

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Christian Credit Counseling – A Better Way to Eliminate Debt RM

Credit Counseling Stands Out

Anyone who has ever struggled with debt knows how debilitating money problems are. Yet most people with debt don’t realize how widespread of a problem it is. Since the Great Recession, debt has skyrocketed among average Americans.

According to the Urban Institute, the average total debt for people with credit files is now $53,850. This number jumps to $209,768 for those people who have a mortgage. In addition, 35% of adults now have debt in collections, a total of 77 million Americans.

Why? Debt comes from sources as varied as credit card bills, child support, medical bills, and utility bills. However, the top 5 reasons people fall behind on financial obligations are medical expenses, job losses, too much use of credit, unexpected expenses and divorce.

The emotional results of financial problems are often just as devastating as the actual costs. People may end up experiencing anxiety and depression, major stress, sleep disturbances, and poor self-esteem, in addition to shame. These problems make it even more difficult to cope with financial burdens.

People with unmanageable debt should first and foremost realize they are not alone. With one in three people in the United States suffering from financial difficulties, it is hardly an isolated problem.

There are various debt consolidation programs that can help people avoid declaring bankruptcy, but credit counseling stands out for four significant reasons. These differences not only enable individuals to eliminate their debt faster but stay out of debt.

Manageable Payments

First, Christian credit counseling not only helps negotiate more manageable payments, it also helps those individuals struggling with financial problems to achieve a feeling of peace. Through reliance on Jesus Christ and trust in Him, you may eliminate the sense of hopelessness that often accompanies money troubles.

Acknowledging God’s Purpose

Second, when you receive Christian credit counseling, emphasis is also placed on acknowledging God’s purpose for you. This can help reduce your anxiety about the future and repeating financial mistakes.

Fellowship and Prayer

Third, through fellowship and prayer, those with financial burdens will feel that they do not stand alone, and have support in their time of need, both from the Christian community and the Lord.

Healing for Suffering

Finally, Christian credit counseling can help those suffering from financial problems to achieve a sense of healing. Instead of dwelling on self-loathing, they may accept God’s love for them and move on with their lives in a more constructive manner.

When you add Christian support to the more practical aspects of financial counseling, including reducing unnecessary spending, putting money aside in savings and practicing good stewardship, miracles can occur! In addition, reliance on better money management tips and on the Lord can help you more easily avoid the pitfalls of debt in the future.

Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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Christian Credit Counselors

Debt Settlement Scams – Asking the Right Questions RM

Avoiding Debt Settlement Scams

Unfortunately, there are plenty of companies out there that prey on those trying to get their debt under control. In most cases, these companies refer to themselves as debt management organizations. They often promise to act as the go-between with you and your creditors; promising a low monthly payment plan to help you pay off debt.

Though the idea sounds legitimate, what most people don’t know is that these companies tack on serious interest to your payment plan for profit. This can either inflate your monthly payment are extend you payback time considerably. Before committing to an agreement with one of these companies, be sure to seek credit counseling first to learn more about real, legitimate debt consolidation.

How to Determine if a DMP Company is Legitimate

  • Ask the representative if their company is an accredited non-profit credit counseling agency. The accreditation will usually be listed with the COA (Council on Accreditation) or the ISO (Organization for Standardization). Also do research on the company to find out if any consumer complaints or lawsuits have been filed against the organization.
  • Be sure to ask if counselors are certified for debt management. These certifications should encompass credit counseling, budgeting, and/or credit consumer laws.
  • Be prepared to ask representatives what information they will provide you with other than a debt management plan enrollment. For instance, will the agency teach you money management or budgeting skills? And if they do provide education materials, are they free?
  • If a DMP or Debt Management Plan is all the company offers, be sure to ask if part of the DMP is reserved for the credit counseling payment. In some cases, these companies will tack on additional fees to your DMP plan without your knowledge.

Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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