Credit Help
 

I have been trying for years to get a charged off credit card debt corrected with no success! To make a long and probably familiar story short, when I was an 18 year old freshman I got a Visa credit card, charged it to it's limit, graduated, paid the minimum payment for a while then stopped paying it. It's been soooooooooo long that it hasn't been on my credit report for years! I've tried to get in contact with Visa about the matter and they said they had no record of the debt so right now I'm at a complete loss as to what my next step should be. Luckily for me that was the only credit card I had in college and the only credit card I've had in my life that has a bad payment history attached to it. My credit rating is good but I can't seem to get it any higher lately. The only way I remembered I even had that card was when my financial planner recommended that I get a credit card because I didn't have one at the time. Visa sent me an offer in the mail but I was denied a credit line and wasn't given a reason as to why. It was then that I remembered about the card in college and figured that had to be the reason why. My husband and I have successfully financed quite a few big items over the years and his credit rating is great so this seems to be the only road block for me. If you have any good advice please help a sister out because I am truly at my wits end! :(

Have you attempted disputing it with the credit bureaus? If it has been the required seven years, they will take it off. Also, if Visa has no record of the account, when the bureaus contact them to verify it and they can't, they may delete it from your report. Try that if you already haven't.

It's not on my credit report anymore but I have a feeling it is causing some behind the scenes problems with my rating. I was told that just because it no longer shows up on your credit report doesn't mean it is no longer a problem. I've only had 3 other credit cards, 2 of them were majors and both I paid off. It wasn't until I applied for a Visa and was denied that I was trippin' because I have never gotten denied for any type of credit and it just struck me as odd. My husband had rental property when I met him and we are trying to buy more when we return to the States and I don't want a $300 charge off to sneak up on me all of a sudden. Besides, regardless of how young and stupid I was back then it is a debt I owe and would like to settle it if possible.

You are an upstanding woman and I understand your desire to settle your debt; however there is one problem IF you do ANYTHING with this charge it will REAPPEAR on your credit report. Then it will not be a behind the scenes problem with Visa, but on the report problem for all to see.

What many people don't understand is that items are nto removed from your credit report 7 yrs from the last charge but rather 7 years from the last activity on the account. The last activity is often someone trying to do what is right and pay off the debt. However, this effort often ends up restarting the 7 year period, as it would in your situaiton.

Hypo:

Flyy Freshman gets credit card in 2000.
Flyy Freshman charges $5000 on credit card on July 5, 2000.
Flyy Freshman NEVER pays any money on her card-- not once.
July 5, 2006 collections agencies start calling Flyy Freshman offering for her to pay $500 and settle her debt.
Flyy Freshman does nothing.
July 5, 2007 the credit issue is removed from her credit report.

VICE

Flyy Freshman gets credit card in 2000.
Flyy Freshman charges $5000 on credit card on July 5, 2000.
Flyy Freshman NEVER pays any money on her card-- not once.
July 5, 2006 collections agencies start calling Flyy Freshman offering for her to pay $500 and settle her debt.
Flyy Freshman takes offer and pays $500 charge off on July 30, 2006.
ISSUE NOT REMOVED FROM FLYY'S CREDIT REPORT UNTIL JULY 30, 2013.

MightyQuinn your situation may be treated a little differently because the charge off is already off your credit report, but I highly doubt it. I have seen many friends who try to do what it is right and now suddenly they are haunted by a charge off for 7 MORE years. This is why the creditors start offering charge offs about year 5 and 6- they know in 1-2 short years you will be beyond their reproach.

What has likely occurred in your situation is that yes the charge off is truly "off" of your credit report, but because Visa is the lender you defaulted on, I am sure they know in their records that you defaulted on them. Remember, off your credit report means not published to OTHER WOULD-BE LENDERS not that each creditor purges its records every 7 years. Because Visa "knows" you they are likely reluctant to give you credit again because you already got the best of them once. I would think you could easily get an equivalent Mastercard, but you may never get Visa to offer you credit again.

Girl, I would kiss you right now if I didn't think you would press charges! ( Or if I wasn't so far away)- This is news to me and I'm wondering why my financial planner didn't know this or tell me this! Someone else sent me a PM with some terrific advice but she needs to clean out her inbox so she can receive my thank-you reply :D. Thank you Exquisite5!

No problem- glad to be of service.

Like I said, your situation could be different since the charge off is already off of your report, but I really do think by paying it now, you would re-activate it and it will show back up on your credit report...for 7 more years. But still you should check this out and make sure.

Isn't it sad when people try to do right....
 

they end up getting screwed anyway? :confused:

Just as another FYI, I heard on the radio yesterday an ancedotal episode about a husband and his wife who were flagged down by HOMELAND SECURITY because they tried to pay off a credit card with one large lump sum payment!!!

Basically they had been making minimum payments for a while, until they came into some money from a family estate or something like that. They decided to pay off their credit card (about $6000 worth of debt I believe). For some reason that activity flagged them with DHS, who then began spying on them!!! I guess DHS wanted to know where the money came from, to make sure it wasn't 'terra-ist' money or drug money or something, who knows.

This Patriot Act stuff creeps me out. I know banks monitor activity on transactions larger than $10K (wire transfers, withdrawals, etc.) because I briefly worked at a bank.

Just a word to the wise! Watch your back.

MQ, first getting an increase on your FICO is tricky. You are given a score between 300 and 850 depending on a number of factors taken into account by the credit rating agencies. In the same vein, get a copy of your free credit report at www.annualcreditreport.com. Don't assume that each agencies report contains the same information. These agencies get their information from lenders and different lenders report to different agencies. Mistakes are also made, so getting a credit report from each one is the best way to make sure that everything is accurate.

If you desire to get say a 700+ score, there are some factors you must look at;for example,

1. You (and your husband) may have been able to obtain credit fairly easily;however, always, always, pay your bills on time. Late payments and collections can have serious consequences on your credit score. Your payment history is a major factor as it represents 35% of your credit score.

2. Do not apply for credit too frequently. This will decrease your credit score because this is a characteristic of high credit risk groups.

3. Keep your credit-card balances low. If you're "maxed" out on your credit cards, this will affect your credit score negatively. A good rule of thumb I've heard several times is to keep your credit card balances at or below 25% of your credit limits.

4. Fix any mistakes you have with the major credit bureaus right away because it can take time and have significant impacts. This entails getting in touch with the lender to verify that the information is accurate. If the lender can't confirm or doesn't respond, then the information is removed from your credit report. Also, if you have paperwork proving that the information on your account is false, send it to the credit bureaus and keep copies of everything.

You mentioned this,
"I've only had 3 other credit cards, 2 of them were majors and both I paid off."

Believe it or not not good. 15% of your credit score is based on the length of your credit history, and that includes the age of your oldest account as well as the average age of all your accounts. In other words, lenders want customers who will stay around and not move their accounts to whoever has the lowest current introductory offer.

So when you paid it off, you removed your revolving credit that showed how well you pay debt.
5.Lastly, don't bother to close accounts that have had missed payments or have had collections. Open or closed, they will be part of your past credit history for some time.
So in effect, don't worry about the Visa.

Wow this thread has been enlightening. Last semester I wasn't able to work or find a job and therefore was unable to pay most of my bills. Now my credit card payments are out of the water and I really don't know what to do. They offered some kind of payment plan but my bank account was just as bad. (Really rough semester.) Anywho I'm debating whether to keep paying the small payments weekly or save up what I can to try and reach the already high minimum amount due. For example..I paid my Visa bill 2 payments totally $100 and the amount due was $230 or something. Not enough they say, I still got charged a LATE fee and an over the limit fee.. It's getting to where I don't want to pay them anything at all if it's doing no good. There's no way on this chicken head salary I can scrape up $221 for two credit companies. Any advice here. I did enroll in a Credit monitoring program who sent me a report from all the bureaus. My credit is fair only b/c of these credit cards being late and really close to the limit.

HELP!

FYI , there is legislation being introduced to increase the minimum payment due so beware! Back to the cc's, first Missam you will be charge a late fee when balances are not paid on time. So make sure you make the minimum payments (normally, 2% of the balance) ASAP! If you spent the limit, say 1000, and you don't pay by the due date you will be charged a late fee which puts you over the limit then a over the limit fee will be assessed.

Also, beware of credit monitoring programs because all do NOT show your true FICO they show a FAKO. Use www.myfico.com for FICO scores online. If you want to improve your credit pay your balance down not completely off UNLESS if after you pay it offf you charge again but no more than 30% of the card limit. Anything over the 30% yields high utilization which simply means you have too much debt-- a strike against your FICO.

If you want to pay down your credit card, double your minimum payment. STOP charging! Esp. for small items like gum, pop, hosiery, etc..

A good way to increase your score through credit use is buy enough gas to fill up your tank once a month then pay it off. This is a good but cheap way to use your cc's without ruining your credit and building your score.

I was just thinking about this the other day.

First, why are there 3 credit bureaus? One big credit bureau would be easier for creditors and consumers to deal with.

Secondly, why is the formula for determining your FICO score so darn convoluted? If the average consumer could determine how each action would definitively affect their score and, in turn, what their score would affect, I am sure more people would and could do the right thing.

Maybe some entrepreneur could create some type of credit score program like TurboTax is for taxes. Consumers could put in their credit activity, even hypothetical scenarios, then out pops the resulting credit score! We all know an educated consumer is the best consumer.

This is a GREAT thread. :)

Thanks!
 

Thanks for all the great advice and for those of you asking questions keep it coming because I'm sure someone else is having the same problem as you are! :D

There a three for equity and fairness....as if, but anyway, the formula for FICO's are different for each bureau and in some cases each credit entity. That's why when you look at your FICO's each score may be different. For example, Ford Motor Company may use what is called an auto-enhanced credit score to determine credit worthiness whereas Toyota may use Transunion. Now Suze Orzman, has come up with a program called Scorewatcher and for 79.95 per year or 49.95 for a one-time use, it will monitor your score and tell you what you need to do to improve it.

I am in the process of getting my credit score up and I was faced with these two hypotheticals. To be honest with you, I am morally conflicted. I have 4 more years before my credit card debt is totally off the account so that by 2010, I am in the clear. However, I believe that if you owe debt, you must pay it back! If I do that, then I am cursed for the next 7 years :(

Yeah I heard about the legislation and thought it had already been passed. That's the problem though..the minimum balance has gotten so high to where I CAN'T afford them with the other obligations I have. I just got my first check from my 2nd job and I will file this week. So I hope to get those cards back on track. Thanks for the info though!!

after a while the credit company writes everything off... since you went so long without paying it (5 or more years) .. it kind of "goes away"....


until you try to get credit with them again.

this same thing happened to my friend. she wouldn't pay and she told the company this... lol and she also told them that she knew they would write it off...

This has already happened to me for my last 2 cycles. The way Bank of America explained it to me was this way they are getting the minimum + the finance charge which will help folks pay their cards down faster. I was already paying way over so I lucked out but I know there are some for who their old minimum was high and the new one is impossible.

Sometimes I feel like saying "Get yo' hand outta my pocket" (a la Malcolm X) :mad:

That DOES work too! I disputed some things and got 3 of them removed in 2005. I started looking more in depth at my report and was about to get one of those companies that claim to "clean up" your report. However, I realized that I could do the same thing for free, but it is very time consuming.

maybe I can help you Missam, pm me. Now you mentioned something about filing....I hope it is NOT bankruptcy. If you didn't file before October 16th 2005, the type of bankrupcy that will be allowed will be based on your income.......

Whatever you do, don't go to those credit repair agencies, it's just like filing bankruptcy.

The mean score is 720 in America, if you aren't in the 700's you have average to below average credit, which simply means your rates may be higher because you are considered a higher risk.

Good thread
 

This is a great thread. I pull my credit report more often these days because of identity theft. I even put an alert on there in case some new line of credit is requested, the merchant must contact me and ask certain questions.

I was also able to dispute quite a few items and they were removed. In addition, my name was misspelled and there were a few names on my report that were not me. Those were removed also. I was able to do 95% of my corrections and disputes online.

Re: Good thread
 

If possible, it's actually best to pursue disputes around November. Around Nov, credit card companies are so busy focused on consumers spending money for X-Mas that they usually forget to respond to disputes. For your dispute to be removed, the creditor can't reply within 30 days.

FICO Score
 

I pulled my credit reports again. FYI: https://www.annualcreditreport.com/cra/index.jsp <------get it free!
Anywho, I got my FICO score, and it is in the lowest range, I have paid off my debts (which I found out afterwards may have lowered it being it was so far gone), disputed and got some removed, and only have a student loan (still in deferment). Any ideas on how to make the score go up? I know when I start paying on my loan it will go up. how fast will it rise?

Sharla

not very....it will go up over time say 3 -6 months.....If you really want to see change get a secured cc and utilize only 30% of the cc loam limit and pay it off on time...Your FICO depends on the lines of positive credit you have reporting. Since, you have paid off old debt which in effect lowers your score you must get more credit (to show how well you pay debt) since the debt you paid off was factored into the scoring model as a slow payer/risk.

Agencies Adopt New Credit Scoring System
 

NEW YORK - The nation's three major consumer credit bureaus have created a new credit scoring system designed to make it easier for financial institutions to evaluate loan applications and to give consumers a better way of measuring their financial health.


The credit reporting agencies — Equifax, Experian and TransUnion — announced Tuesday that they're introducing "VantageScore" to banks, mortgage lenders and credit card companies immediately. The new scores will be available to consumers after the lender rollout, probably later this year.

"There's clearly been a need out there to have a consistent scoring model that works across all three reporting agencies' data," said Kerry Williams, group president of Experian's credit services division. "And consumers need a consistent score that they can understand and use in their own financial lives."

Credit scores traditionally have been three-digit numbers that lenders used to evaluate the creditworthiness of borrowers. The scores reflect how much debt a consumer is carrying, how good they've been at paying back loans and how many credit applications they have outstanding.

They're important because lenders use them to determine if they'll loan money to consumers and at what rate. The higher the score, the more creditworthy the consumer is considered and the lower the interest rate the consumer will be charged.

The agencies in the past each used their own proprietary formulas to generate their own scores, meaning that a lender dealing with a consumer's application for a credit card or a mortgage might have to reconcile three widely different scores.

With the new system, a single methodology will be used to create the scores for all three credit bureaus, the agencies said.

As a result, scores will be "virtually the same across all three of the national credit reporting companies," said Experian spokesman Donald Girard. Any difference in the scores provided by each agency will reflect differences in the data they've collected in consumers' files, he said.

The credit reporting agencies said in their announcement that VantageScore "will provide consumers and businesses with a highly predictive, consistent score that is easy to understand and apply."

Consumer advocacy groups expressed concern that the new scoring system would not eliminate one of the biggest problems in the industry which is incorrect information in consumers' credit files.

"That means it's a new recipe, but the same old ingredients," said Jean Ann Fox, director of consumer protection with the nonprofit Consumer Federation of America in Washington, D.C. "It doesn't address the underlying accuracy of the credit reports on which the scores are based."

In addition to the credit agency scores, some large lenders generate their own internal scores, often using credit bureau data. And many lenders, especially those in the mortgage business, use FICO scores, which are named for the Minneapolis-based Fair, Isaac Corp. that developed them.

Thomas G. Grudnowski, the chief executive officer of Fair, Isaac, said that "for the past 20 years, we've been both cooperating and competing with the credit bureaus ... and that will continue." He added that it could take a long time to establish a competing system.

"Do the customers ... really want to go through the pain of converting to another system?" he asked. "I think only time will tell."

Dana Wiklund, senior vice president for predictive sciences at Equifax, said that VantageScore "is a new, competitive product to give lenders greater choice, and hopefully greater accuracy, in credit scoring." He added: "The rate of adoption will determine ultimately if the (new) score replaces any in-house or generic scores in the market."

Executives at the credit agencies said that the bureaus did not need to consult with federal regulators before developing their new scoring process. But a number of executives, including Wiklund, traveled to Washington, D.C., on Monday to brief bank, savings bank and credit union regulators on the new scoring process.

"The role of the regulators is to look at the safety and soundness of the institutions they oversee," Wiklund said. "They're very keenly interested so that models don't have disparate impact ... on low income vs. high income individuals, minority vs. non-minority, that kind of thing."

VantageScore ratings will range from 501 to 990. The top end is slightly higher than scores currently in use.

In a separate statement, Experian said the new scores will be grouped on "the familiar academic scale." Experian gave these groupings, with A and B being the best potential borrowers and D and F being the weakest:

A — 901-990

B — 801-900

C — 701-800

D — 601-700

F — 501-600

Colleen Tunney, spokeswoman for TransUnion, told a conference call with reporters and credit industry representatives that the new score was created by looking at millions of consumer files at the same time to ensure consistent readings across the three bureaus' data.

David Rubinger, spokesman for Equifax, said the new score was expected to reduce the variance in a consumer's scores by about 30 percent compared with what it was under the old system.

He said the score would reflect a consumer's frequency of borrowing, delinquency in paying bills and other "file content." But Rubinger and other credit bureau spokesmen said it was too soon to provide the specific weights for the components.

VantageScore is being independently marketed and sold separately through each of the three national credit reporting companies through licensing agreements with VantageScore Solutions LLC, the joint announcement said. The spokesmen said that VantageScore was jointly owned by the three credit bureaus. They said it did not yet have a headquarters, although an informational Web site had been set up at http://www.vantagescore.com.

The credit reporting agencies are operated by Equifax Inc. of Atlanta, Experian Information Solutions Inc. of Costa Mesa, Calif., and TransUnion LLC of Chicago.

Tips to Building Your Credit Score
 

I just graduated from Graduate School and I am working on repairing my credit and raising my credit score. Are there any tips that I can get that will lead me back on the right path. My goal is to be above 600.

Also, I am looking to get my credit score without it affected my actual score. I have heard people say that when you check your score it usually reduces it to maybe 5-8 points. Can I get some help?

Thanks in advance!

Don't open up store credit cards. Just use your Visa/Mastercard/Amex/Discover. Having a lot of credit cards lowers your credit score. Also pay your bills on time and in full. That increases your score.

www.creditboards.com is a GREAT credit resource.

^^^Creditboards is an okay resource if you want to repair your credit by letterwriting, but the best source if you want to take the litigation route and really sock it to 'em, is artofcredit.com (currently offline for maintenance, will return soon).

I can only speak for myself and say the I got great results following what I learned on CB. To each their own.

Oh, don't get me wrong. I am not saying that creditboards is a bad means of getting credit repair advice. Not at all. Matter of fact, it was the first board I surfed for credit repair advice.

I found Art of Credit by accident, matter of fact after surfing a collection industry board and the one board the collection agents always mentioned as their worst enemy was AoC. So I checked them out and it appealed to me moreso because as a man, I tend to take the more aggresive routes. When someone crosses me, I like to put a foot in a nucca's tail, if you will.

But you're right, that's just me. Indeed, to each their own.

Kudos to CB for them helping get you get your credit back on track. :)

You are not penalized when you pull your credit report/score. If you have too many other people pulling your score for you or making inquiries then your score can go down a couple of points. However, after 2 years, multiple inquires drop off of your report.

i.e. I was buying my first home and with all of the loan officers and mortgage companies pulling my credit, it reduced 10 points. So at one point, I had to write a letter stating that I was trying to purchase a home and why my score dropped in such a short period of time.

Also, you are allowed to pull your credit from all three credit agencies at least once a year for free. I don't have the website, but I think it was posted by someone else. However, if you want the FICO score associated with it, you might have to pay an additional $5.95, but it is worth it and you have access to your score and report for 30 days.

What may work for you is if you call the original lender and ask if you can pay for a deletion. I've heard that this is difficult and some companies will not budge, but it has worked for many others. Don't contact any third party collection agencies, contact the OL directly and offer them a lump sum of 50% if they will delete the negative item from your credit report. If they agree, be sure to get it in writing.

I concur! This site has helped me TREMENDOUSLY. There is a wealth of information there that I would have never known. :)

I pulled my report at the beginning of the year. So now how can I get the FICO score? I thought the score would have been on the report but it wasn't.

Thank you for replying to my initial question.

Another site I found helpful (and found on GC in another thread on credit) www.creditinfocenter.com

Diovanka8, you can go back and pull your credit report again, unfortunately this time you will probably have to pay. Make sure you pull all three reports and at some point you will be given the option to obtain your FICO score. Choose that options and then you will have the three respective scores from the three agencies.

It is important to pull all three scores because they can vary between the three.:( However, that is supposed to be changing soon.

Good Luck and kudos to you for trying to take control of your situation. Many people become so overwhelmed that they take the "outta sight, outta mind" approach.

You can sign up at Myfico.com or join a site sponsered by one of the bureaus. I am a member of truecredit.com. It is only $14.95 per month. I can access all three reports whenever I want plus all 3 scores. They also alert you of any changes to your credit report.

Does anyone know how to reduce the effect of student loans on the fico score? I am told by mortgage lenders that lots of student loans do not adversely affect the credit, however, when I pull my credit, I have fairly good scores but one negative rating provided at myfico.com for my scores is "balances too high on installment accounts." I only have student loans and do not have any other installment accounts that are not paid off so these student loan balances are clearly affecting my credit score, which will affect my mortgage interest rate even if my debt to income ratio is fine.

Does anyone know what might be done? There are about three different loans from the same lender b/c each year I got a loan, they listed it separately on the credit report. Would it help if I asked the lender to put all three loans together? The balance would still be just as high obviously.

I'm annoyed b/c a sister can't even take loans to get an education! I have lots of student loans and due to the low interest rate, it doesn't make sense for me to pile a ton of money into paying them off over the next ten years or so when I could invest the money or pay off my credit card bill, use the extra money to purchase a home, etc.

Anyone got any tips?

SC

Also, I know that lenders typically look at the *middle* score so you want to know all three scores.

SC