Page 15 - Everything You Need To Know About Personal and Business Credit by Adrean Yancy

Everything You Need To Know About Personal & Business Credit

· Credit Inquiry
The general guideline is not to apply for or open too many credit cards over a short

time within a year. The reason for this is that for every application you make for a new
credit card, the lender makes a "hard inquiry," and it does harm to your
creditworthiness.

Both FICO and VantageScore will have you penalized if you attract multiple hard
inquiries within a short period. FICO and VantageScore view and address this as
deduplication, but they both have di erent timelines for this.

FICO score uses 45 days to dedupe one's credit score, while VantageScore uses a 14-
day deduplication window. Also, while FICO considers mortgages, auto, and student
loans for multiple hard inquiries, VantageScore does with all types of credit, credit card
inclusive.

· Collections Account
The in uence of account collection is another variable where both FICO and

VantageScore di er. Both will penalize any account sent to collections agencies, but if
you have a low-amount collection account, there is a high chance that FICO will decide
to give you a break.

Also, if your original balance is less than $100 or your account has been paid o , FICO
will disregard such collections.

VantageScore (version 3.0 and 4.0) disregards only paid-o accounts regardless of
your original account balance.

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