Online Credit Checks

Written by Jessica Duquette
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Online credit checks can provide you with an instant listing of your credit history. For many people, this process uncovers many mistakes and inaccuracies. If you rarely have your credit check run, you could be putting your credit at risk. The longer mistakes sit on your report the more damage they can do.

Potential Debt Vs. Actual Debt

Many of us like to take advantage of the no payments; no interest deals that furniture stores are continuously offering. Three years ago you spent $1,200 on a new living room set. You have since paid that purchase completely off, but the account still sits active on your report. With a credit limit of $8,000 you are still exposing yourself to potential debt.

When lenders check your credit history they are not just checking for current debt, late payments and active accounts. Each account you have open whether you use it or not, is listed on your credit report. The bank will total the amount of possible debt you can occur. That means if you have an $8,000 limit, you could potentially max out your card. This is considered additional risk to a lender.

Maintenance Before Online Credit Checks

To avoid these risks, be sure to close any inactive accounts before running online credit checks. This will not only improve your FICO score, but it will limit the temptation to refurnish your new home when you first move in. You've just committed to a thirty year mortgage, so you don't want to incur any additional, avoidable debt.

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