Unknown Additional Account: How will it affect my score?

Question by SilasB: Unknown Additional Account: How will it affect my score?
I currently have the following scores (Experian: 686, Equifax: 698, TransUnion: 646) which still don’t include the fact that I have paid the remaining balances on my credit cards.

Recently I was checking my credit report for this month and it showed I had an extra account which looks like a duplicate. I was looking carefully and I noticed my Wachovia student loan of $ 5,500 is posted into two accounts with the same three credit agencies, so my total debt now “increased” to $ 12,600 from $ 7,100 in the previous report. I have checked with Wachovia and I confirmed I only have one loan for $ 5,500.

I have already taken steps to fix this error, but I was wondering how will it affect my score since I was planning to get an auto loan next month as my credit cards have been paid off?

P.S. I just noticed in one account with Equifax it says “ACCOUNT TRANSFERRED OR SOLD
STUDENT LOAN”, but I haven’t done anything with it.

Best answer:

Answer by jpocia03
If it shows that the account has been transferred or sold, the previous creditor might not have reported it to the credit bureaus.

So to answer your question, this does appear to be a duplicate account. Normally, creditors can determine this by the similiar account numbers. It would require a Letter of Explaination (aka LOX), from you to explain to them what has happened.

At the same time, the only thing creditors are more concerned about is the “ability to repay”, so no matter how many accounts are open, if your gross monthly income covers these with room to spare, don’t sweat it.

In some cases a duplicate reporting account, helps your credit if paid on time. So changing this or anything on your report could potentially hurt or help your score. You don’t know until it’s done, and there isn’t any way to reverse what you have done.

So just move ahead as planned, and the creditor if they have any questions will let you know.

P.S. it’s also important to shop around a bit for an auto loan as well. If you read myfico.com (The free pdf), it will show you that you do have a shopping period. What this means to you is if you have 5 lenders pull your credit within 15 days, it will only count as one credit pull.

The way a finance manager for a dealership makes his/her money is similiar to a mortgage broker. They pull your credit and provide all your personal information to the lenders. A lender may approve you for 6.25%, but this is a par rate (which means that the 6.25% is at cost. And the finance manager makes nothing). So this manager offers you the rate at 6.50% sometimes 8.25%, and makes a commission from the bank on the difference.

I would check with local credit unions, and banks to see if they are offering a promotional rate and if you qualify. At the same time let the finance manager do his/her thing. A go with the best deal. However, do not tell them that you are working to obtain other financing, until you have settled on a purchase price of the vehicle.

Hope this helps.

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Tags: Account, affect, Score, Student Loan, Unknown