Credit Inquiries-How They Affect Your Credit Report
There
are two types of inquiries: Internal and External.
Internal
Inquiries are completely harmless. They
occur whenever
your
existing creditors check up on you and also when you request a copy of your own credit report.
Internal inquiries are never seen by potential creditors.
But
"External
inquiries" are
another matter entirely.
An
"external inquiry" is triggered when a consumer applies for a credit
card, line of credit, loan or mortgage or gives permission to a potential
employer to make a credit check. Frequent external inquiries may be viewed as a sign of iffy credit.
See How
To
Erase
Credit Inquiries
The
reason is that
lenders won't know the exact details
of this inquiry for
the next 90 days. All they see is that something else is going on, something
that may perhaps make you a greater risk
Their thoughts may go something like this: "I don't know what this
is on John's credit report but I bet he's applied for more credit. If he's got a new credit card, I bet he's also got into more debt!
And with more debt then he's less likely to pay us back if we give him a loan. Let's reject his application and play it safe."
Of course,
the creditor could wait the 90 days to see what John
had applied for, but usually, they won't. In this case, John had merely applied
for a credit card and been rejected.
But paranoia got the better of them and now John's out of luck.
To avoid this trap, make sure there are no external credit checks within 90 days of
when you're ready to apply for a mortgage or loan.
To ensure no inquiries are made without your permission, you'll want to
put a stop to unsolicited "pre-approved" credit-card offers and the
like. Shred the ones you
receive before throwing them away. For More Details see How
To Erase
Credit Inquiries
Return
To Credit Reports
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Time Limit
On Collecting A Debt and the Maximum Amount You Can Be Charged
State by State Statutes of Limitation For Credit Card Debt (50 States &
DC)
Collectors have a limited time to file
lawsuits over unpaid card debts. They can still "ask" for payment, but after
the deadline, they cannot threaten to sue as you have no legal obligation to
pay. The chart shows the time limit on written contracts or
open-ended, revolving credit accounts such as credit card agreements. Many
state laws and codes do not refer specifically to "credit cards" or "credit
card agreements." Instead, the statutes may use the general terms "written
contracts" or "open accounts."
How Long Do Various Negative Items Stay On Your Bad Credit Report?
Inquiries=2
years, delinquencies=7 years from last payment, unpaid tax liens=15 years,
Chapter 7 bankruptcies=10 years, Chapter 13=7 years,
paid tax liens=7 years.
What state should I use in
figuring out the statute of limitations?
According to Ron Opher, of www.ron4law.com: the
FDCPA applies when a 3rd party debt collector is involved. Thus, the only
relevant jurisdictions are where the consumer signed the loan application and
where the consumer currently lives (bank location is irrelevant). If those
states are different, I believe the creditor has the choice of where to sue
and can select from the state with the longer SOL. There may also be an argument
that the contract was signed "under seal" which might lead to a longer Statute
of Limitations than an ordinary contract.
Note: The FDCPA
(Federal Debt Collections Practice Act) applies only to third parties who
collect debts for others. This law governs some law firms, debt collectors and
collection agencies. It does not govern the actions of the original creditor
such as the bank or store who you directly owed the money to.
Normally credit cards have agreements which state that in the
event of a dispute, the laws of State ________ will apply. While the contract
may or may not be binding as to which SOL applies, play it safe. Look for the
credit laws and SOL in the state listed in your original agreement or loan
application.
Other Frequently Asked Questions On Debt Collection
Mr. Smith,
From what I
understand,
You have a credit card bill that goes back eleven years. Your original bill was
for $600.00 and now a collection agency wants 1800.00 from you. You've asked me if there's a limit to how long they can
collect on past due bills and if there's a legal limit on what they can charge
you.
I see three issues here that may relate to your
situation. However, I make no promises I'm right. I suggest you call your
local Federal Trade Commission or Attorney General's Consumer Protection
Division to confirm anything I tell you.
ISSUE#1
Can They Charge Me So Much Over the Original
Amount of The Bill? My original debt was $600 and they're now asking me for
$1800!
The fact is that they can charge anything they want unless they're in
violation of the applicable State and Federal Usury Laws (Laws On Charging
Excessive Interest Rates). The real question is whether or not you're
required to pay it at all. See Issue #3
ISSUE#2
How long can they keep this debt on my credit report?
I believe the answer is only 7 years from the date you stopped making
any payments. Check your credit report
and complain to the proper authorities below if it's still being reported past
the 7 year date.
ISSUE #3
Even If they can't keep reporting it, can they
still sue me? This is where the state Statute of Limitations comes
in. SOL's vary from state to state and are also based on the type of debt you
have.
Thus, it's important to know which state's SOL applies
and whether it's a court judgment, credit card debt, or if you signed a
promissory note, etc. Here's what I found at the link below. Please read what
it says very carefully and be sure to look at the STATE SOL Chart. It is
possible the SOL Chart is outdated and I cannot vouch for the accuracy of any
link listed here. Note: Most credit card debts are considered "OPEN ENDED
ACCOUNTS, which is the last column on the chart.
