Credit report info. Long but helpful

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audtatious — 2009-08-07T08:47:09-08:00

You will not have a credit rating if you have never been in the "system" before. I would start with a credit card to start establishing credit. If you need a car then that may be another good 1st jump but may be difficult with no established time here and no prior credit history. I know a friend of mine (US citizen) moved to S. Africa right after high school and when he came back he had a difficult time getting appropriate credit as the agencies wondered why a US citizen in his early 30's had no established credit. May be different in your case, I don't know.

topseed66 — 2009-08-07T05:36:11-08:00

Well great explanation on credit rating. Well my doubt is, as a person migrating to America soon, DO I start with a credit rating? How the credit rating is done? Is it on the basis of experience?

J-Owner — 2007-11-12T06:53:29-08:00

Vaxmap,

Regarding:

#1. It depends entirely on your situation as far as how much you have in credit card and installment balances. If you carry high balances it can lower your score. If you do not carry hardly any balances then for a small installment loan of $4K I would say that it would not make much of a difference in your score. You say you have already been approved for the loan, which means they have already pulled your credit resulting in an inquiry on your report. If you take the loan and repay it on time with no late pays then this will show that you are being responsible with your credit. As worst the car loan may lower your score slightly in the first year. After the first year it is basically immaterial so long as you continue to pay on-time. The inquiry on that loan will stay on your report for two years form the post date and then drop off.

If you have the cash to pay for it that is certainly an option but to pay cash would mean you would miss out on the chance to show a solid payment history on that loan for 2 or 3 years. The other side of the coin is how much do you carry in credit and installment balances on your report. My guess is assuming that the interest rate on the loan is acceptable to you and not a "raping offer" then the bank was obviously comfortable making you the loan which means things shouldn't be that bad. If the interest rate is like 10% or above then I would be cautious. Review your report and see what it reflects. If you have a revolving availability below 50% (ex. $1,000 credit limit with a $500 balance = a revolving availability of 50%) then I would say things are getting tight for you.

#2. If you are referring to accounts with late pays, etc., these items will stay on your report and show as negative accounts for seven years but it is not uncommon to see them up to 10 years. Once you hit the seven year mark you need to ride the bureau to drop it.

If you are referring to how long accounts stay on the report in general they stay on there forever to show your payment history.

#3. Yes. If you bug them enough and you are persistent you will lilkely be successful in getting them to drop the negative items. The Bureaus are required by law to verify the accuracy of a disputed account within 30 days. If it is not verified within that time they are required, again by law, to remove the item from the report. Now if the reason they removed the negative items is because they did not hear from the account holder like Sears, Best Buy, Citibank whoever, within the 30 days and those cardholder's then verify the accuracy of the late pays say in 45 days that item can be put back onto your account. The trick here is to continue to dispute. The more you bug them and the more you bog them down the more likely the Bureaus are of dropping the issue altogether and removing the negative items to be done with it.

FYI - If you get a letter from the Bureau's staing that you have already disputed something do not let that stop you. If it remains continue to dipsute it. This letter is the Bureaus way of try to trick you into complacency. They think by sending you a letter that you will give up. They are required by law to dispute anything you send them as many times as you send it so don't let them tell you otherwise.

Hope this helps.

Re: (J-Owner) Car Loan & Credit

vaxmap — 2007-11-10T12:38:15-08:00

J-Owner,

Your posts have been very helpful. I have three questions, hopefully you'll be able to answer.

1. I am thinking of getting a small car loan (about $4000) for a used car. Does opening up a loan lower your credit? I don't have the greatest credit history and was hoping that since I've been approved for the loan, I would get it to help build better credit, but then I read somewhere that the more debt I have on my credit report lowers my score. Should I not bother, and just pay cash, if I can?

2. I have a number of accounts on my credit report (foolish mistakes I also made in college) that I paid off, and then closed. How long will they stay on my credit report?

3. Are you saying that if I bother the credit card companies enough about past delinquencies, that they may erase them from my credit history?

Thank you!

J-Owner — 2007-11-08T08:33:34-08:00

I clearly haven't checked this thread in quite sometime. If anyone has any credit questions I would be happy to answer them.

I haven't had this thread tied to my e-mail reminder so I haven't kept up with it. If you have questions ask away.

Thanks,
B

Re: Credit report info. Long but helpful (swtaznsorjai)

supertomcat — 2007-08-17T21:33:26-08:00

j-owner i have a few questions to ask you about rebuilding credit. i have a stundent loan that was marked on my credit report and i was wondering can you please give me some advise on how to build up my credit up. thanx alot for the help.

Re: Credit report info. Long but helpful (audtatious)

swtaznsorjai — 2007-07-16T12:40:03-08:00

wow, thats took a while to read. Thanks for the great info.

Re: Credit report info. Long but helpful (0wn3r)

audtatious — 2006-12-03T11:13:36-08:00

If it is a credit card that is in good standing for a long time, it could hurt your score to cancel it and keep the "new" credit card. The older credit card extends your credit history more.

Re: Credit report info. Long but helpful (CustomJ30)

0wn3r — 2006-12-03T10:21:29-08:00

If you close an account you will never use again that is in perfect standing, are you saying that is a bad thing?

I thought this would free up some of your credit line to other places?

Re: Credit report info. Long but helpful (J-Owner)

CustomJ30 — 2006-07-24T21:57:46-08:00

Hello J-Owner.

I know this is an old topic, but I really need some credit help. If possible, please email me at mike690003@hotmail.com so I can tell you my (very long) problem.

Thank You

Re: (lean)

Zion8561 — 2006-04-05T23:23:11-08:00

Excellent post.

http://www.annualcreditreport.com

This is where to get one free credit report from each agency every 12 months. you have to pay like $10 to get your score, but at least you can make sure no one is opening new accounts under your name for free.

So you could check one every 4 months, or get all three every 12. Up to you.

Re: (s13ofdoom)

lean — 2005-03-30T13:39:07-08:00

Just wanted to point out new legislation has pasted this year that eliminates your numerical credit score from declining from a credit �hit.� Like stated above, a hit is when your credit is pulled at say, the dealership, credit union or bank.

Now, your credit score is only a part of your credit rating. Banks don�t only look at your credit score when determining your ability to repay your loan, and while it�s possible for legislation to prevent a hit from declining your numerical score, it�s impossible for legislation to eliminate the subjective side of your credit rating (which many bankers consider an art). It�s possible for a 20 year old to have a score of 750, but the creditor will notice that�s only based on a small limit credit card and a cell phone. That 20 year-old�s �750� score won�t get as far as a middle-aged person�s 750 rating.

s13ofdoom - One of the best ways to build credit while you're young is with a cell phone company that reports your statements, a credit card used to buy only groceries and a small car loan (most people can handle $50/month, even if you're out of a job for a while). Don't overload yourself with debt. It's really easy to look at a $60/month payment for that sweet pool table, but how many times has that extra $60 saved your butt when it's time to pay insurance, car, cell, rent, utilities, etc.

Edit: Did it again! Next time I'll pay attention to how old these posts are.

s13ofdoom — 2003-06-18T09:04:28-08:00

hey J im 18 and want to start building credit what would you advise me to do, I know what not to do :)

spinmaster — 2003-06-18T09:04:28-08:00

Congratulations J, thank you for spreading the CLEAR word and enlightening most of us simple mortals.

J-Owner — 2003-06-18T09:04:28-08:00

I would be cautious of such companies. They do not do anything that you cannot do yourself. These companies will charge you a monthly fee and in some cases an extra "retainer" for there services to basically dispute the negative items on your report.

You can do the exact same thing they do for free. It may take more time on your own because it can be an exhausting experience but it can be done.

These companies cannot guarantee you anything. If they tell you they can then they are liars. I would be leary of such companies.

expertrm — 2003-06-18T09:04:28-08:00

What about these companies that say they can fix bad credit and get things removed from you credit report?

Thanks
Ramon

J-Owner — 2003-06-18T09:04:28-08:00

Q45Viper - No to both your questions. You can check your report once a month if you want you have that right. It will not lower your score. As for the second question, that will not lower it either because those are called permissable inquiries, meaning it won't count as a hit on your credit, only new credit inquiries, like applying for credit counts.

AZ94Q - If you want to pay the debt then that is ok, it is personal preference. You are right that the bad history does not go away but it costs you time. If you pay that bad debt 6 years from the time it was charged off then you have reset that seven year time period. Also, keep in mind that settling is not a good idea either. Settlement on your credit report is just as bad as a charge-off so by changing the flag you are not accomplishing anything for the better. Also, paying off the debt may raise his score a little but not enough to make a difference because the flags "Settled" or "charge-off" that is on the report will offset any FICO score that would have increased if his bills were paid off and his balances were zero without the flags.

Like I say you can pay it off if you want to but if I had a charge-off I wouldn't pay a dime. Like I say personal preference.

Hope that answers the questions.

Thanks!

AZ94Q — 2003-06-18T09:04:28-08:00

I would disagree regarding not paying back charge off accounts. In certain situations, it is preferable. Let's say someone has 20k in charge offs, and now has the money to pay them back. Assuming a typical 50% negotiation rate, he would have to pay ten thousand. Now, while they won't disappear they will at least show as settled, with 0 balances. If he can reduce his debt to 0, his credit score will improve soley on this fact.

Q45Viper — 2003-06-18T09:04:28-08:00

J-owner..excellent report, a couple questions.
1. If I keep checking my report as suggested does that lower the score?
2. Credit card companies routinely check these so that they can raise rates if they find something wrong. Does this count as a credit check that lowers the FICO or is it only NEW crdit checks that do this?
Thanks

J-Owner — 2003-06-18T09:04:28-08:00

Everytime you write the bureaus to do an investifation you will get a FREE copy of the report after the 60-90 day time period they have to investigate. One way to keep getting FREE reports is to reinvestigate things that remain. That is how I kept getting free reports without ever having to purchase them.

Also, here is a secret. When you write them for investigations, ok say you WERE late four times on your Citicard, the bureaus don't know that. Maybe those late pays were the result of unemployment, change of address, CC company didn't post it in time. They don't know this. Make them investigate all of the items over and over again. If you are lucky some of your creditors might not respond to the investigation and if they don't guess what? Automatic delete from your report. Or they get sick of your disputes and delete them to get rid of you or you get some computer geek that works for your credit card company and is in charge of verifying your history and refuses to forget about it and let the bureaus delete it. In this case it may be a long 7 years for you to get that one deleted. I had this happen with SEARS, the worst company on the planet. No matter what I did I could not get that one removed, good news is my 7 years was up last year. Deleted! Yeah.

J-Owner — 2003-06-18T09:04:28-08:00

Let me also add that I think you can request a copy of your reports once a year for free. I will have to check on that as I can't remember. I do know that this WILL NOT give you your credit score you WILL have to purchase that. Also, if you are declined for credit from someone and they sent you a letter of decline it should tell you which bureau they pulled from and you can request a copy from that bureau for free with in I believe 60 days. Just wanted to add that tidbit.

Credit report info. Long but helpful

J-Owner — 2003-06-18T09:04:28-08:00

Hey Everyone,
I thought I would share my knowledge of credit reports with everyone since there are some new threads out there about FICO scores. First let me say that I am a commercial loan officer and credit underwriter so I am very knowledgable about the bureaus. First FICO is Fair Isaac Credit Organization, a company based in California. The highest FICO score is 850. 800-850 is excellent credit. 700-800 is good. 650-700 is ok but could be better. Anything below a 620 and typically you cannot get a loan or a mortgage and likely not even a credit card. There is also what is called a New Risk score. Depending on where you are in the country they may either use FICO or New Risk. With FICO the higher the score the better. With New Risk it is the opposite. The lower the better.

The three bureaus are Experian, Equifax, and Trans Union. I am in Dallas and Experian is headquartered here so almost everything in Texas is pulled through Experian. If you do not check your reports often you should. You should check them once every 6 months by logging on to any of the bureau websites. You can buy a copy of all three reports and your credit score for like $35. It is important that you check all three as there may be items on one that do not show on the other two. The only way to see everything is to have all three reports.

Now there are alot of things that can effect you score such as inquiries, late payments, collections, charge-offs, settlements, balance to limit ratios, public records, etc.

Lets first take inquiries. Everytime you apply for credit somewhere you get hit with an inquiry. Too many can lower your score so you have to be informed about how many are on your reports. If you have alot and some result in declines it shows that you are out there trying desperately to get credit. It looks bad. Inquiries stay on your report for two years from the date and then drop off.

Now lets take late payments, collections, charge-offs, settlements and public records. All of these are bad but the one that hurts you the least is a late payment. Public records are like tax liens, liens filed for child support, lawsuits, etc. Collections, charge-offs and settlements are basically the equivalent of filing personal bankruptcy and will absolutely destroy your credit rating. These items stay on your reports for at least 7 years and then should drop off but it is not uncommon to have them remain for up to ten years.

Next is balance to limit ratios. This one heavily effects your credit rating. Lets say you have $10K in limits on your cards and you have a balance on your cards of $5k, then you have a 50% revolving availability. Once you fall below 50% in this ratio it WILL get harder for you to get credit approvals. To fall below 50% means you are maxing out your cards or getting dangerously close to the max. So keep this in mind.

Also, closing old credit relationships can hurt your score as well. If you have a Citibank card you opened in 1990 and have never had a late payment on and you have an AMEX card you opened in 2000 that you have been late on four times and you want to close one, close the AMEX account. While those late pays will still remain, you have not erased your excellent payment history dating back 13 years. Close your newest accounts first if you have to close something.

For anyone that does have a charge-off on there account. If it is charged off then do not ever make another payment on these accounts. Charge-off accounts are aften sold to other companies for a premium and then the new company attempts to collect on the charged-off debt by nagging the hell out of you nightly. Lets say you have a citibank account that was charged off in 2000 for $1,000. This will remain on your report for the 7 year time period. You have 3 years of the 7 years under your belt already. Lets say you give in to these nagging collectors that call you and agree to pay off the debt now or just pay a little. If you do from that point of payment you have just reset that 7 year time period. That three years you had under your belt to get it erased is now gone and you start over.

Now, what can you do to clean up your reports. You do have options. First get a copy of your reports. Sometimes the quickest clean ups will be accounts are your reports that aren't yours or accounts that are duplicated on your report. Look for these. The main way to clean it up is to dispute any false items with the bureaus in writing. You have the right to write the bureaus about any inaccuracies on your reports. While this is a pian to do it does work. When you dispute an item on your report the bureau has 30 days to verify the accuracy of this item with the creditor. If after 30 days, the creditor does not respond then the bureau MUST remove the item from your report. NOTE - If that creditor responds to the bureau lets say 45 days later instead of the 30 days, that item that was just removed can then be put back on the report. This does happen occasionally. Anyway, the bureaus will then send you a free copy of your report after about 60-90 days showing you the result of your investigation, whether the item was deleted or remains. If you do not get it removed then send another letter to re-investigate this item. They may tell you that they can't because it was already investigated. Don't let that stop you because it is an attempt to get you to stop making the bureau's do extra work to investigate your items. Keep sending these letters over and over and over. I promise you, at least in my experience doing this that they will get so sick of investigating the same items that they will remove them just to get you out of there hair. I have cleaned up over 20 negative items on all three of my reports by this method. Items resulting from my irresponsible days in college and in the frat house where I ran up my credit cards.

Anyway, you do have options to clean up your reports so that when you go in to get a loan to buy that Q or M or G you won't have to worry about if you will be declined or not. Know about your credit before they do and do what you can to make sure it is as clean as possible.

Also, while some people may recommend credit repair companies and debt consolidators I say RUN LIKE HELL FROM THESE PEOPLE!!! Do not do it. You can do the same things they do and not have to pay them a fee to do it. Plus, if you use a debt consolidator they require you to close all of your accounts. In doing so they will flag your accounts to say "closed at credit grantors request" instead of "closed at consumers request". This is an automatic red flag to banks and anyone looking at your credit that you have indeed done debt consolidating.

Today, bankers don't take the time to listen to your reasons for bad credit like a terminally ill child, unemplyment, etc. They look at that damn credit score and if it isn't above there requirements it is an automatic NO with no explanation. KNOW YOUR CREDIT BEFORE THEY DO AND CLEAN IT UP. It will take time but it can be done.

Ok, I apologize for the novel here guys but I thought this might help some people out there about how the system works and how to screw the system. For those of you who already know all of this sorry to be redundant, for those that never chekc their credit and this is all new to them then I hope this helps you. If anyone has any questions. Lemme know.

Take care NICO bros,
Brandon