Credit Help

[MightyQuinn]

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!

[RedefinedDiva]

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.

[MightyQuinn]

Originally posted by RedefinedDiva
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.

[Exquisite5]

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.

[MightyQuinn]

Originally posted by Exquisite5
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 . Thank you Exquisite5!

[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.

[Alouette]

they end up getting screwed anyway?

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.

[soft&beautiful]

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.

[Missam05]

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!

[soft&beautiful]

Originally posted by Missam05
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.

[mccoyred]

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.

[Boom_Quack13]

This is a GREAT thread.

[MightyQuinn]

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!

[soft&beautiful]

Originally posted by mccoyred
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.

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.

[_Opi_]

Originally posted by Exquisite5
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.

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