Need to improve your credit scores?

[Bytestream]

check out www.creditboards.com (http://www.creditboards.com)

It is to credit repair, as twoplustwo is to poker. In two months I've raised my Fico score over 70 points following the advice I got there.

Some highlights: prewritten dispute letters, database for new credit cards and what beauru they pull your report from, how to check your credit report everyday for next to nothing...

If you want to get a better rate for a new mortgate or refinance or get an auto loan or new credit card, check your credit reports and raise your score.. its as +EV as it gets.

Just thought I'd share this with the zoo as Im sure many can benefit.

[MicroBob]

I think you've posted this link before...but I was too lazy to get around to it.
Thanks for the reminder as my credit probably needs as much improvement as anyone out there.

[dogmeat]

Just a friendly notice to those of you interested in this - and keeping your score high:

Everytime you get a credit report, apply for any type of credit etc., it hurts your score. You see, the agencies lower your score every time your report is pulled!

If you move into a new home, you will have reports pulled (probably) by your new water company, power, cable, phone etc. and this seriously errodes your score.....

Dogmeat /images/graemlins/spade.gif

[BradleyT]

creditnet.com has been around longer and has more posts but is harder to navigate.

[DBowling]

From what i hear, and i could be wrong, is when you pull up your own score it is different than when a creditor does, and it only negatively affects your score when the creditor pulls it up.

[Bytestream]

from what I've learned, yes a "hard" inquiry will lower your scores, however the system takes into account "shopping around".. so if you apply for a mortgage or a new card within a 2 week period you will only be hit with the 1 inquiry not multiple. Checking your own credit report (such as online) is a "soft" inquiry and won't lower your score.. the reason behind this is that when people are going into bankrupcy they tend to feverishly look for any means of credit to help them out of the hole.. therefore applying for a lot of credit in a short time lowers your score and chances of being approved. 1 inquiry every six months or so has almost no effect on your score.

[moondogg]

[ QUOTE ]
From what i hear, and i could be wrong, is when you pull up your own score it is different than when a creditor does, and it only negatively affects your score when the creditor pulls it up.

[/ QUOTE ]

I spend a few years developing software for parsing credit reports (along with several other mortgage orignation third-party interfaces), so take my understanding for whatever you want:
- There used to be a general rule in the scoring engines which would decrease your score if three credit inquiries were made within a rolling six month period
- Recent changes were made (I beleive at the behest of the gov't) so that only "credit applications" (i.e. user authorized credit pulling for the sake of extending credit) were used in deducting your score. In other words, you can pull your own credit report without deducting your score.
- Noone is allowed to pull you credit report without your authorization. For this reason, it is important to check your credit report regularly (every six months) to ensure noone is pulling your credit report without your permission, as this can negatively impact your score.
- The whole idea of deducting your score does not seem to make much sense at first. However, if you have good credit and get into money trouble, you may over-leverage your good credit and get yourself into trouble. Therefore the idea is that if you have applied for several credit cards or loans withing the last six months, your credit may be taking a turn for the worse.

Nobody outside of TransUnion, Equifax, Experian knows exactly how your credit score is calculated. These are considered trade secrets, and the algorithm proprietary to each company.

Some other tips for credit:
- Maintain a reasonble ratio between your income and total available credit. Despite your solid standing, potential creditors don't like to see that you could rake up monstrous debt tomorrow if you max out your credit cards
- In the other direction, make sure that you have several lines of credit, such as several credit cards with relatively small limits. Multiple sources of credit improve your rating. Once any one of those sources hits the seven year mark, they become much more valuable to your score.
- This summar I applied for a mortgage. After one potential broker commented that my lack of debt was suprisingly good, she commented that I should sell my car (3 years old which I own outright) so that I can get another car with an auto loan. In this case, an additional credit account in good standing would be beneficial to my credit, but not nearly worth the amount of interest I would end up paying for the car loan. Needless to say, I fired her on the spot.
- There is absolutely no difference, as far as your credit report is concerned, between paying the minimum balance and paying your balance in full. In fact, in the standard EDI X12 credit reporting format that all 3 repositories adhere to, there is no way of reporting a difference. (This is not an endosement of carrying a balance, raking up interest on a credit card are one of the worst things you can do financially).

When in doubt, pull a tri-merge credit report from QSpace (pay the extra $10 for all three credit scores). It will tell you what you need to improve.

Get a few credit cards and pay them off in full each month. If you don't have enough credit to get a real credit card, get a secured card (for a $300 credit limit, you have to front the $300), they look the same on your report. If you can't afford what you are charing to your cards each month, you can't afford what you are buying. Credit cards paid in full each month are the best investment towards a good credit score, as it's one of the only credit-building items that you don't actually have to pay interest on.

If people are more interested in credit score rules, let me know and I can post some more detailed information. I'm pretty sure I have copies of the repositories' specs on my computer somewhere.

[Bytestream]

Very interesting and accurate.. While a lot of it common knowledge to the folks on the afformentioned board, Im sure they would scorch their shorts for a taste of your more detailed specs. You should post it there and see what kind of interest it generates. Revealing any proprietary or new info will give you demi-god status over there (the Sklansky of credit info).

The one thing any one of them would wholeheartedly disagree with, is DON'T spend the money for a trimerged report from Qspace or any of the like, they are not always as complete and accurate... always get your reports directly from the beareaus or from www.myfico.com (http://www.myfico.com) The myFico reports are excellent and give you your actual FICO score as well.

Lenders use your FICO score, scores by any other entity are reffered to as "FAKO". There are numerous affiliate codes for like 20% of your reports from myfico.com. If anyone is going to get their reports an quick online search should reveal a few.

Here's a hot tip: If you want a general idea of what is in your credit file, sign up at www.privacyguard.com (http://www.privacyguard.com) for thier two month trial for $1. You can pull a new "fako" trimerged reports every day. Folks like to do this when they start disputing the tradelines so they can monitor their progress daily. Anyway, cancel before the two months, and you've got your reports for $1. Highly reccommended.

[archmagi]

You should also check out www.experian.com (http://www.experian.com)
they hold the data that is used for your credit score.
they can provide you your credit report, and also they have a service which you subscribe to, and they track the changes in your credit records, and alert you if it starts heading in the wrong direction.

[jasonkm1]

My credit is terrible-- a few years ago in college I ran up two credit card bills that I haven't been able to pay back. They closed the accounts and were sending me notices but I was broke (and still am) so I had to ignore it. I've since moved but they always find me and are still sending me notices. It's been about 3 years of non payment. How screwed am I? Anybody been in this kind of situation before? I couldn't possibly pay it back right now as I'm not making enough to even get by. My friend told me to claim bankruptcy but another said it would be a waste of time since I only owe around $15,000.

[Bytestream]

The people on creditboards can answer you better then I can, but I know this. Don't pay your bills now. If its been over three years, the statue of limitations for them suing you is probably up. That means the agencies that bought your bad debt can continue collections, but they can't get a judgement to force you to pay it back.

Basically, those delinquent accounts can stay on your report for 7 years from the last activity. You've already cleared 3, but if you make any payments to the agencies, you can reset the clock.

Depending on when you need credit (i.e mortgage to buy a home etc) your best bet is to continue to wait them out. Find out exaclty if the SOL is up, and if it is, send out dispute letters to the CRA's. You will also be able to make them stop contacting you with a single letter. You can sue them if they do. Make them validate every debt. Most of the time, they won't bother and bam, its deleted off your report. Right now, you should definitely get a secured visa or two, like from American Pacific Bank, and never miss a payment. If you have any other open accounts, never miss a payment then, In two years you'll have better credit then 75% of the country. Point is, time and payment history will raise your school tremendously, and as those bad scores age, they will have much less impact on your score.

When you deal with the collection agency's you can negotiate deals to pay pennies on the dollar of what you owe, AND have them delete the derogatory credit remarks.

Read that forum and ask questions, to make sure you are doing it right. It could be the most important finacial work you ever do. The difference of 1 or 2% on a 30 year mortgage can mean hundreds of thousands of dollars in interest.

If you take the time to learn, the stuff you can do to fix your credit and get out this hole at little to no cost is amazing.

[jasonkm1]

Thanks for the info Bytestream, I'll check that site out now. I was suprised by your answer. I figured when I get settled and get a good job I would start repaying but now I'm now sure what to do. Who woulda thought I may be better off not paying!

[M.B.E.]

[ QUOTE ]
If its been over three years, the statue of limitations for them suing you is probably up.

[/ QUOTE ]
Where is that? In my jurisdiction, the limitation period for an action on a debt is six years, not three. Also, I wouldn't be surprised if some credit card companies put a choice-of-law clause in their terms and conditions, ensuring that the applicable law is that of a jurisdiction with a nice long limitation period.

[Voltron87]

Any advice for a youngster with a clean slate? I'm about to open credit card accounts and I want to do this right from the beginning.

Other than don't spend too much and don't leave bills unpaid.

[BradleyT]

Some states are 3 years, some are 6, some are in between. It's not up to the creditor to put in "clauses", it's up to them to follow federal laws and comply with the FDCPA (Fair Debt Collection Practices Act).

[ QUOTE ]
Legal debt collector actions under the section 811 allows debt collectors to sue consumers for the purpose of obtaining court judgements for debts but, only in the judicial district where the consumer resides or signed the contract, except that an action to enforce a security interest in real property which secures the obligation must be brought where the property is located.

[/ QUOTE ]

[kylemontero]

Who cares my rating is 780 is that good I have no idea?

[M.B.E.]

[ QUOTE ]
Some states are 3 years, some are 6, some are in between. It's not up to the creditor to put in "clauses", it's up to them to follow federal laws and comply with the FDCPA (Fair Debt Collection Practices Act).

[ QUOTE ]
Legal debt collector actions under the section 811 allows debt collectors to sue consumers for the purpose of obtaining court judgements for debts but, only in the judicial district where the consumer resides or signed the contract, except that an action to enforce a security interest in real property which secures the obligation must be brought where the property is located.

[/ QUOTE ]

[/ QUOTE ]
I'm not familiar with U.S. law, but it appears from this FTC commentary (http://www.ftc.gov/os/statutes/fdcpa/commentary.htm#803) that the term "debt collector" as used in section 811 of the FDCPA (defined in section 803) does not include a credit card issuer that collects its cardholder's account.

[brandon]

[ QUOTE ]
Who cares my rating is 780 is that good I have no idea?

[/ QUOTE ]

A+ credit is anything over 740

[BradleyT]

[ QUOTE ]
[ QUOTE ]
Some states are 3 years, some are 6, some are in between. It's not up to the creditor to put in "clauses", it's up to them to follow federal laws and comply with the FDCPA (Fair Debt Collection Practices Act).

[ QUOTE ]
Legal debt collector actions under the section 811 allows debt collectors to sue consumers for the purpose of obtaining court judgements for debts but, only in the judicial district where the consumer resides or signed the contract, except that an action to enforce a security interest in real property which secures the obligation must be brought where the property is located.

[/ QUOTE ]

[/ QUOTE ]
I'm not familiar with U.S. law, but it appears from this FTC commentary (http://www.ftc.gov/os/statutes/fdcpa/commentary.htm#803) that the term "debt collector" as used in section 811 of the FDCPA (defined in section 803) does not include a credit card issuer that collects its cardholder's account.

[/ QUOTE ]

Yes, the FDCPA applies to 3rd party collection agencies - not original creditors (the entity you owe the debt to). However OC's rarely ever go after you, they almost always pass the debt to a collection agency.

[Bytestream]

[ QUOTE ]
Yes, the FDCPA applies to 3rd party collection agencies - not original creditors (the entity you owe the debt to). However OC's rarely ever go after you, they almost always pass the debt to a collection agency.

[/ QUOTE ]

Once the OC writes off the bad debt and sells it a CA, they no longer have any claim to it. The SOL (statue of limitations) applies, and depending on the area may, the CA may be SOL (shiit outta luck) for obtaining a judgement.

The OP claimed about 15k in bad debt from a few creditors, Im sure every account has been sold and no longer can be sued for by the original creditor, who has no interest in it anymore anyway.