Do You Need a Credit Check for Line of Credit?

Credit checks are standard when applying for lines of credit such as signature loans and home equity loans. A neighborhood store or hotel casino could extend a line of credit without a credit check, but those are unique examples. Banks, credit unions and similar lending institutions will certainly require a review of your credit.

Credit Scores

Credit scores range from 350 to 850, with a score of at least 620 usually needed for approval on lines of credit. Scores of 720 or higher are preferable and qualify you for lower interest rates and possibly higher credit limits. Credit scores are based on information on your credit report. People with the highest credit scores have very little negative information on their credit report such as late payments, charge-offs, collection accounts and judgments. They also pay their bills on time while keeping balances low.

Credit Reports

Credit reports are available for free through AnnualCreditReport.com, which is managed by major credit bureaus Experian, TransUnion and Equifax. The Federal Trade Commission endorses the site as the only government-approved source for obtaining credit reports for free. Other sites offer free reports but also try to sell you services. After viewing and printing your report from the website, follow included instructions for ordering your credit score separately for a fee. Review the score to determine how your credit score matches of with general standards for credit line approvals.

Credit Repair

Negative information usually cannot be removed from your credit report unless it is wrong or outdated. However, creditors and debt collectors have the authority to remove information that they place on reports. Occasionally, a credit card company will remove a late payment from the credit report of a longtime customer whose payment arrived a day late. Or a creditor may remove charge-off information in exchange for full payment on a defaulted account. Otherwise negative information that is accurate remains on reports for a minimum of seven years.

Contacting Credit Bureaus

The Fair Credit Reporting Act allows you to challenge any information on your credit report. Do so by writing the credit bureau at its address on the credit report. Or call the customer service number or visit the website. Federal law requires credit bureaus to respond to your correspondence within about 30 days. You are making a formal inquiry called a dispute when you challenge information on your report and the credit bureau is required to investigate before providing a response.