ARE YOU FUNDABLE, OR DO YOU JUST HAVE A GOOD SCORE? MERRILL CHANDLER
The third area of a highquality credit profile is your installment loan portfolio. As with your revolving account portfolio, you can have a Tier 1, 100 % quality loan, and you can have a Tier 4, 40 % quality loan. The quality of the loan contributes to or detracts from the quality of your credit profile and the quality of your credit profile determines your fundability.
The next contributor to a highquality credit profile are your inquiries. Inquiries count against your credit score for 12 months, but what we were not told is that the inquiries count against underwriting and fundability for 24 months. FICO ® and lender underwriting software downgrade your fundability significantly when you have too many inquiries. How many is too many? FICO ® allows one inquiry per six months without a
significant degradation of your credit score or fundability.
After one inquiry per six months, there is a steep pointloss curve as you incur more inquiries. Additionally the quality of the accounts you are applying for will impact your credit profile. Finance companies, mall store cards, and other lowgrade credit instruments have a greater negative impact against your score than higher tiered credit instruments.
Finally, the most powerful negative contribution to your profile and fundability is the presence of derogatory accounts or other negative indicators. The credit repair industry has increased borrower awareness about the negative impact of bad credit. Unfortunately, credit repair is not a solution that will help your fundability. Credit repair companies offer a meager dispute letter writing campaign in the hopes of removing a few negative accounts. While the removal of these accounts may improve your score a little, it does not improve the essential nature of your fundability as we ' ve described in this section— credit repair does not help you build a powerful FUNDABLE credit profile.