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in the middle of your effort to find a good loan! This sabotages all except your first loan application. Your score will bounce back up, three months from now, but by then you're done shopping. In sum, the system is still broken, and you still need to know which lender you prefer BEFORE you apply.

There is another way to avoid multiple credit inquiries when shopping for a loan, and that is to use a broker. Mortgage brokers have gotten a lot of bad press lately for unethical business practices, so be wary. But they can still be useful. They check your credit score once and share the results with many different lenders - effectively shopping around for you. This is a good way to get the best rate. There are also car loan brokers, such as USAA (if you are a veteran or related to a veteran).

FIFTH MAJOR SCORING FACTOR: OVERALL CREDIT LIMIT
Having many credit cards with high limits slightly lowers your credit score. If you keep low balances on those cards, as I suggested above, then the "damage" of having high limits is likely outweighed by the benefit of having low balance-to-limit ratios. So don't worry too much about this factor. Just keep your balances low.

SIXTH MAJOR SCORING FACTOR: COLLECTIONS, BANKRUPTCIES, JUDGMENTS, ETC.
This factor actually has the biggest impact on your credit, and it will outweigh absolutely everything else. A person with stellar payment history, low ratios, and no inquiries will still be scored as a delinquent if he has a collection or bankruptcy on his credit report. These are special events with their own special section on your report. You want this section of your report to be empty, as it is for most people. If you have one of these on your report, you are in the credit doghouse and need to get it off your report ASAP.

Most collections on credit reports are errors or outright frauds committed by unscrupulous "collection agencies." These are sophisticated, abusive, borderline-criminal businesses that exploit the power and complexity of credit reports to hold people's financial lives for ransom. You are entirely justified in disputing an error on your credit report and fighting these bottom-feeders to the bitter end. They make their money from people who don't fight back - people who would rather pay hundreds of dollars just to erase this headache from their credit history. They do not follow through on their promises, however. They take the money and don't correct their errors, leaving people's credit scores in ruin. If you have a fraudulent

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