Credit Repair Companies
June 17th, 2009 at 12:00am
Under Credit Repair Companies
Question:
Here’s my question: a few years ago I had a DirecTV account which was
automatically being billed to my credit card each month. I was out of
the country for a while, lost my credit card, and DirecTV couldn’t
bill me (at some point along the way, they cancelled my service too,
which didn’t matter much because I wasn’t around anyway). I eventually
got back & paid the bill.
Here’s the kicker though: the incident now appears as “collection
activity” on my credit report. This seems a bit dumb because I really
didn’t have any credit relationship with them. Is DirecTV really
allowed to report me to a credit reporting agency in this situation?
Answer:
DirecTV is a service billed monthly until *YOU* cancel (much like
many other services such as telephone service or Internet service).
If you “cancel” by just letting a charge or check bounce, they have
a legitimate reason to put a ding on your credit report. You’re
supposed to contact them and cancel the account. And in your case,
it sounds like you paid the final bill WAY late.
I don’t know whether your DirecTV bill was billed ahead (you’re
paying for NEXT month) or behind (you’re paying for LAST month).
In any case I doubt they bill for Pay-Per-View movies in advance.
And even if you were supposed to pay the bill ahead, it sounds like
you paid it way behind. I don’t think this is true. But it costs money to set up a
relationship with a credit agency, and most people you lend $20 are
not mad enough at you to spend $500 dinging your credit over a $20
debt. But as far as I know, if it’s a real debt (and they may need
proof of this to cover their butt), they can report it.
If this hypothetical guy happened to be a landlord or store owner
with an already established relationship with a credit agency,
and if he had something in writing about this $20 and when it
was actually due, he might very well report it.
By admin
June 15th, 2009 at 12:00am
Under Credit Repair Companies
Question:
If I wanted to make a $5000 purchase but only had $3000 cash, could I
just pay the $3000 upfront and pay off the remaining $2000 monthly?
Answer:
It’s common on large purchases for a store to accept multiple means
of payment (e.g. some cash, a paycheck, a gift certificate, his
credit card, his other credit card, his check, her credit card, her
father’s credit card, and part of it financed on a used car or a
major furniture purchase). Ask the store and they’ll probably be
glad to do it for such a large purchase.
Or, if you have the credit limit, you could charge the whole thing,
then pay off the $3000 right away, but it looks bad on a credit
report to come close to maxing out your card (or even more than 50%
of max), and you’ll get dinged for interest between the charge and
the payment.
Some stores have problems with this: it took me about 45 minutes
to pay for a small purchase with a smaller gift certificate and the
rest on a Discover card at Sears, largely because the cashier didn’t
know how to do that (not that I couldn’t do that). This was a $50
purchase and that department probably wasn’t used to this. “Or, if you have the credit limit, you could charge the whole thing,
then pay off the $3000 right away, but it looks bad on a credit
report to come close to maxing out your card (or even more than 50%
of max), and you’ll get dinged for interest between the charge and
the payment.”
We OFTEN charge send large purchases through our credit card when we
have plenty of cash in our account to pay with cash. Our credit score
is nearly 800, had not been reduced by the practice nor do we pay
interest since we issue the payment with days of making the charge.
Hense, a zero balance by the time the statement is produced and no
interest charge.
Why do we do this? We get 1-5% cashback on purchases depending on the
store when we use our credit card. If we put that $5,000 on our card
and pay it immediately we STILL get between $50 - $250 in cashback or
points for simply directing the purchase towards the card. Well worth
doing it that way if you have a credit card with rewards and pay right
away.
By admin
June 15th, 2009 at 12:00am
Under Credit Repair Companies
Question:
On a credit union loan, I just found out that I was in the “B”
category. Outraged (I have perfect credit), I asked why. The
employee said one “negative” was that I had had 3 “inquiries” within
6 months. What is an inquiry? Turns out it’s when you open a credit
card account or when somebody checks your credit. Who knew?
In the period in question, I opened (and immediately
closed!!!) one of those low-interest solicitations from USA Bank.
I must been out of my mind, because I — and plenty other others on
the consumer NGs — have been shafted by those ***holes.
OK, that’s one “inquiry”.
I bought a car in Sept ‘00. The Toyota dealer ran an
on-the-spot credit check which, as I well knew, came up perfect.
The credit union person (see para 1) told me there had been
*another* inquiry from Bank of America, which financed the car loan.
Question: Why did the bank have to run another credit check,
from the same places that the Toyota dealer had just done?
This, apparently, is what shoved me over the edge, into
paying more for my credit union loan.
I want to raise some hell. Where do I start? I thought of
asking B of A why they had to run a separate credit check.
Would appreciate input from experienced consumers.
Answer:
Which credit report did they pull? If it’s Experian you can dispute the
inquiry online and possibly have it deleted from your report. Since your
loan is from BofA, dispute the inquiry from the dealership, not the BofA
one. They’re bullshiting you. If you want to know the truth, go order your
FICO score through www.equifax.com or www.qspace.com . It only costs
$13 and you will learn exactly what’s wrong with your credit history.
Qspace also gets you a free full credit report for this price.
The reason I say that the CU employee was full of it, is that 3
inquiries cannot hurt you. I have 7 inquiries in the last 6 months and
18 in the last 12 months and yet my score is 793 (excellent), which is
in the 85th percentile.
By admin
June 14th, 2009 at 12:00am
Under Credit Repair Companies
Question:
I am planning on close about 23 credit accounts - gas cards, department
store cards, etc. All have zero balances, no lates on any of them, I
just dont need them and seldom use them. Im wondering what the credit
score ramifications might be. Ive heard from some its not a good idea
to close so many accounts. My FICO hangs around 800, and I’m still
planning on keeping 1 MC, 1 Visa and AMEX. Does anyone know how this
will affect my score. Thanks
Answer:
If your FICO is around 800, close only the most recent cards, close
departmental store and gas cards.
I’d do this gradually too (close 8, check score, then close 8 more, and then
keep 8 open). My guess is that anywhere between 5-8 open accounts is a
good thing. If your score is around 800, I don’t think you have too many
credit score worries. Anything above 720 is basically an A,
and anything over 760 is pretty much unheard of. I think it
is more important to do your clean up than it is to worry about
the hit you will take on your FICO score.
I did a cleanup like a few months ago. I had something like
43 cards and accounts that I closed. I found that many of them
were either out of business, or sold so many times that I could
not track down anyone to talk to. I found a number more where
I had multiple accounts, and all the older accounts were already
closed when the company changed credit programs. I found that
many of the unused gas cards were also closed already.
In the accounts that you do close, make sure that you ask to
have the account marked “closed by consumer”. That way, they
know you asked to close the account, and the account was not
closed due to bad behavior.
I like to keep a few more cards than just one each. You
never know when you will have an issue with a card, and
you don’t want to be stuck with no cards while you are
traveling. For example, I stopped at motel in Oklahoma
City a few weeks ago. The night desk clerk sold my credit
card info, and that card was maxed out the next day due to
fraud. It was lucky I had a backup card with me.
I never use a card for more than one thing. For example,
all my autopays are on a card that doesn’t leave the house.
I don’t want an autopay to fail, and get a late pay due to
someone doing fraud on me. I use another card just for
E-commerce orders. It has a lower credit limit. Then I
use yet another card just for everyday use. Finally, I
have a pair of cards I use for travel.
By admin
June 13th, 2009 at 12:00am
Under Credit Repair Companies
Question:
I have a car loan with 22 payments to go. About 2 years ago, I went
through a divorce and because of this I had a period of 8 months where
I was constantly 1 month behind on the payment. Due to this period, I
now have 8 30 day late payments showing up on my credit report. After
the divorce was final, I was able to catch back up and I have now made
14 consecutive payments on time. The apr is currently 15.99% which is
ridiculous, but I needed a car and rushed into the deal. My current
credit score with experian is 646. In order to maximize the effect on
the score, should I refinance the car and get a lower apr or continue
to make the payments on the existing loan? Is there any possibility of
getting those late payments removed if I continue paying on time or by
some other means?
Answer:
Those late payments are going to show on your report for YEARS,
unfortunately. I had a friend who had a period he was out of work 5
years ago and his late payments are STILL listed and hurting his score
even today although everything since has been on time.
That said, I would go to an online site like capitaloneautofianance.com
and apply for a refinance. They will tell you if you are approved the
rate right away. You then, I believe, can decide to not use the payoff
check they send you and forget the whole thing. But, you may be able
to reduce your rate even if it doesn’t help your score right off. You’ll be fine. Geesh it is just a little car payment. It won’t be
worth the time and finance charges to worry about it. Just pay it on
time and make you other payments on time and next time you finance a
car pay more attention. Don’t have more then 5 credit lines unless they
are for business use. Dont let your debt to income ratio exceed 45%.
You will be back in the 700’s in no time.
By admin
June 10th, 2009 at 12:00am
Under Credit Repair Companies
Question:
I know that applying for a credit card lowers your credit score
(because when you apply they run a check)
Basically whenever you have someone run a check on your score, it
lowers.
Couple of questions:
1. How much does it affect the score?
2. How long does it affect it for?
I remember the last time I check my score, it was about 780? but it
said it was lowered because I applied for a card that year. (true)
I have been doing a lot of traveling for work, and have been staying in
Marriott hotels, so I was thinking of getting a Marriott rewards credit
card. (I am already part of the Marriott rewards plan)
But I am thinking of buying a home in the next year or two, so I am
concerned that applying the card will affect my rating.
So, my question is basically how much of an impact and for how long.
My friend said it lowers the score, but only for a few months.
Answer:
It may ding you a bit, but not enough to worry about. The
problems happen when you apply for a lot of different credit
in a short period of time. With your score, people will be
drooling to give you credit. Even if it does cost you a
few points, you will more than make up for it with the
rewards card that you are considering. Well, I dont use credit cards much. Maybe 100 to 200 a month.
So it wont give me THAT much stuff. lol.
Should I order my credit report again?
I heard there is a new law that says everyone can get a copy of their
report for free from the 3 major places. That would save me some
money, I think it was 30 bucks for the report and the fico score.
I am in New York if that makes a difference.
By admin
June 10th, 2009 at 12:00am
Under Credit Repair Companies
Question:
I replace 15,000 credit card debt with a low
interest 15,000 secured loan. My dad is securing
a loan for 4.9 percent to pay my credit cards
(it’s still my loan).
Answer:
Your credit score should go up over time as you establish
a track record of paying the loan. But, the end results
depend on you changing behavior. First, you have to ditch
the credit cards. If not, you may end up in the same place
$15K in debt, but this time, you already have the loan
payments, and no more options to get a sweetheart bail-out
loan. Second, make darned sure you can pay this back. If
by secure you mean that your dad had co-signed, then you
realize that if you don’t pay, your dad’s credit record
gets nailed, and then he has to pay it back. Don’t screw
over your dad by taking this loan if there is any chance
that you will not make 100% of the payments 100% on time. Oops, I didn’t realize who wrote this message–we were
through this before. One thing to keep in mind is that
the credit agencies move slowly. It often takes 60 to
90 days for items to be reported to start with, then the
credit report agencies take another 60 days or so to update
their records. The credit score itself takes at last 6
months to start moving once things improve. So don’t be
surprised to see much of a year pass before anything
significant shows up on the FICO score. Then again, you
don’t want much more credit right now, not until you are
ready for a house, so FICO doesn’t mean that much for you.
By admin
June 4th, 2009 at 12:00am
Under Credit Repair Companies
Question:
I got my credit reports and FICO scores from different companies to
compare them. On the same weekend day, within a few minutes of each
other, I got my Experian score from both Experian and Myfico.com to
make sure they agreed with each other. But they don’t. My score
from Experian directly is 59 points higher than my Experian score from
Myfico.
I also got my Equifax score from both Equifax and Myfico, and those 2
agree with each other, and are between the 2 Experian scores.
Myfico’s reports seem to contradict each other in other ways. Showing
positive and negative factors for scores, it says my Experian score is
hurt by a short credit history, and my Equifax score is helped by a
long credit history. But the actual credit history length it shows is
longer for Experian than for Equifax.
On my Equifax report, my accounts are mostly accurate and up to date.
On my Experian report, there are some old accounts I closed years ago,
and some of my present accounts are missing.
My number one complaint about credit reports in the USA is the fact
that we’re forced to deal with 3 different credit reporting agencies.
Everyone should have the freedom to choose which agency they want to
use, and should be able to keep their information out of the hands of
all other agencies than the one they choose. Logically and ethically,
that would make a lot more sense. For example, what if there were 100
agencies instead of 3? Would it make logical and ethical sense that
we should have to pay 100 agencies for our credit reports and scores
to make sure there were no errors or ID theft against us? How would
we even know about the existence of all 100? Are we even sure there
are only 3 now? With just 3, it’s possible for us to cope, but that’s
no excuse for stealing our freedom from us. Freedom is stolen in
small increments, which, year after year, keep adding up, till
sometime in the distant future, the whole concept of freedom will be
considered a quaint philosophy of ancient history. There may come a
time when everyone is employed by the government, and your boss can
get you thrown in jail on a whim. All it takes is a gradual loss of
freedom, year after year, in small increments such as losing your
rights to control who has access to your credit information. People
will still be able to cope, by sucking up to their bosses to not get
thrown in jail, just like they can cope now, by getting their credit
reports from 3 different agencies. It’s all a matter of degree, and
which year you’re in, in the long slide down the slippery slope from
freedom to no freedom.
Answer:
well he’s complaining that the score from mifico.com who went through
Experian was different than the score he got straight from Experian. Odd
to someone who doesn’t realize that the more times you look at your
score, the more it affects it.
YOU do know that the more you look at your Credit score, the more you
affect it. Twice in one day can affect your score. I don’t believe that’s correct.
My understanding is that a query from the person in the file counts
the same as a query from a credit marketer: i.e. not at all.
It’s loan applications or other applications for credit that can
lower your score, in my understanding.
Can someone with actual knowledge confirm or correct this, please?
By admin
June 3rd, 2009 at 12:00am
Under Credit Repair Companies
Question:
How do the 3 companies (TransUnion, Experian and Equifax) come up with
uneven FICO numbers for consumers. I had some medical expenses that
entered into my credit reports year ago (while I was getting divorced
and lost my job). I have paid off these debts on the credit reports.
However, the score of each company is different. TransUnion still has
my paid debts as “Unpaid” and gives me a high score. Equifax lists my
debts “Paid off” but gives me a low score. ????
I do use my credit card minimally (as opposed to extravagantly) for
normal expenses. Now, to improve my credit score, do I use all the 5
credit cards evenly or just focus on using one card and keep paying it
off on time?
Thank you in advance for any information or advice.
Answer:
They’re different companies. Competitors.
Every lender reports to a different subset of credit bureaus so they all
score off different credit reports.
And scores by a given algorithm will differ for the same reason different
reviewers give different scores to the same movie. Everyone has different
ideas about how to weigh the info in your credit report. A FICO score is a formula applied to a credit report. You have 3
different credit reports. The reports can have lots of differences,
including different card balances because the balances may be
reported at different times of the month to different credit reporting
agencies. You may have some cards show up only on some reports.
Some cards (Capital One is infamous for this) don’t report high
balances so a lower balance may look like a lower credit limit.
Also, if you got 3 scores, did you get them all at the same time?
Your credit report can change in an hour (or more likely, several
days). They are different, well, because they *are* different. FICO aka “Fair
Issac” is a company that compiles data on you. Each credit agency takes
that information and computes their own score, based on their own
computations and criteria. If you will actually read the individual
“score” reports from each company you will note that they *do not* use
the same numeric scale.
I have my “VantageScore from Experian” right in front of me. It nowhere
says on the report that it is a “FICO” score. It specifically says the
“Range of possible credit scores is between 501 - 990.” If you compare
that to the “scores” from other credit reporting agencies you will find
that other agencies use a different low-high range for their scoring.
They are different, becaue they are different. READ the report, besides
just looking at a three digit number on it.
By admin
June 1st, 2009 at 12:00am
Under Credit Repair Companies
Question:
My credit rating droped from a fantastic 765 to an abysmal 645 in one
month! The reason; I just found out I owe $60 to the power company, and
they refered me to a collection agency. I have $150,000 in debt (mostly
student loans) on which I have NEVER been late, and they are destroying
my credit rating over $60! Is this normal? I can pay off the $60 easily
as soon as the collection agency opens on Monday, and I will, but will
this really stay on my report for 7 years!?
The only reason I didn’t pay the $60 is that there has been some
problems forwarding mail to my new address. I honestly thought I had
payed off all my old utilites (heck, the phone company still owes me
$200! Maybe I should report them). Can I do anything to set things
right other than pay off the debt? Will my credit card company cut my
limit over $60?
Answer:
With a total debt of $ 150,000 you are worrying way too much about
the effect of a late $ 60 payment. If your income were high enough
proportionally to have the FICO score you mentioned, you wouldn’t
need to worry about borrowing right now. You may have come to the
wrong conclusion about why your credit score dropped. With $150,000 in debut, you don’t need any more loans or new
credit. As a result, the FICO score is irrelevant to you. Ignore
it, and focus on earning money to pay off that enormous debt load.
By admin
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