Credit report/debt question?

[amg35]

So I am now at $0.00 debt! I own my car and I rent my apartment. I don't have credit cards. My credit report shows all debt paid.

Even though I have no debt anymore, my credit score isn't all that wonderful. How do you go about establishing good credit again? I don't just want to wait for things to fall off my report, or is that all I really can do?

thanks.

 

[amg35]

Also, I'm not bragging about being debt free, believe me! It took a long time, and I'm still paying for my mistakes with my not so great credit. The reason I don't have any credit cards is because that's why I got in this trouble in the first place! (years ago)

 

[pyrxtc]

You have to wait for stuff to fall off your report and/or pay off anything that was charged off on any accounts you owed and they will take it off your report.

 

[DisneyBamaFan]

You also have to start showing good credit. I would talk to someone like a mortgage broker and ask them what you can do to bring up your score. As I said in another thread, we had to begin using our credit cards to bring up our score. Even though we had a great debt to income ratio and had no late payments, we were hurt by not using credit. Having a mortgage, car loan and student loan wasn't enough...

 

[golfgal]

Being debt free is actually a negative on your credit report. Your credit report is there to show that you can take out credit (a loan or use a credit card) and pay it back responsibly. I would get a credit card and use it for necessities only-groceries and gas and pay it off monthly. I would also get a small unsecured line of credit at your bank, generally you can get $5000 or so. Take some of the money out of that and put it into your savings each month $100-200), then pay it back out of your checking account or whatever. Again, show that you can use credit responsibly. If you have no credit on your credit report there is nothing to rate.

 

[amg35]

You have to wait for stuff to fall off your report and/or pay off anything that was charged off on any accounts you owed and they will take it off your report.

I did pay everything off. So I can ask them to take it off my report? I though it had to stay on even if it was paid. The accounts are still on there, they just say paid as agreed.

 

[amg35]

Being debt free is actually a negative on your credit report. Your credit report is there to show that you can take out credit (a loan or use a credit card) and pay it back responsibly. I would get a credit card and use it for necessities only-groceries and gas and pay it off monthly. I would also get a small unsecured line of credit at your bank, generally you can get $5000 or so. Take some of the money out of that and put it into your savings each month $100-200), then pay it back out of your checking account or whatever. Again, show that you can use credit responsibly. If you have no credit on your credit report there is nothing to rate.

My debt free isn't a negative! It was a charged off account.

So I'll try and get a credit card, I'm just not sure I can get one.

 

[golfgal]

My debt free isn't a negative! It was a charged off account.

So I'll try and get a credit card, I'm just not sure I can get one.

You are misunderstanding what I am saying-not having any credit on your credit report is a negative. If you have a charge off on your credit report it will take a couple years of good credit history to offset that. No, they won't take it off unless it was an error and it will stay on there for 7 years BUT if you are good over the next few years and don't have anything else negative on there-late payments, etc. your number will begin to climb.

 

[onelilspark]

It's like when you're first starting out, you need to prove that you can handle credit. When you're 18 (for example) you don't have any debt. Which means the creditors don't know how you'll handle it. So you get a low-balance credit card, and start making payments monthly. It's actually good to pay a little interest now and then because it shows you using credit. So if you spend $100 on your credit card one month, pay $90 and then the next month pay off the $10+interest. Doing that once/year will help.

It sounds silly, but it's the way it works.

And right now, the only thing you can do besides things like that is just wait. It takes time for your credit score to bounce back.

 

[wvjules]

1. Have the balances updated on your credit report to show as zero?

2. Do you have any recent late payments or charge offs?

3. Do you have a bankruptcy, judgement, collection account?

Positive accounts will remain on your report for 10 years.

Negative accounts will fall off 7 years after last date of activity.

 

[Planogirl]

You can ask the companies to remove the bad accounts but they don't have to. Some people seem to work out agreements but that is usually before they pay. If these accounts stay they do remain for 7 years from the date of delinquency (not the open date - so many people don't get that!) but usually they count against you less and less as they age. If you have a revolving account showing delinquency, the delinquency itself will fall off after 7 years not the account itself.

It's definitely a good idea to have a few revolving accounts to build up credit. These accounts will remain forever if they're open and for 10 years from the closing date if you decide to close them.

 

[amg35]

1. Have the balances updated on your credit report to show as zero?

2. Do you have any recent late payments or charge offs?

3. Do you have a bankruptcy, judgement, collection account?

Positive accounts will remain on your report for 10 years.

Negative accounts will fall off 7 years after last date of activity.

1. Yes

2. It was a charge off a year ago, but I paid the payment arrangement on time every month.

3. No


thanks everyone, I'll just have to slowly rebuild my credit.

 

[wvjules]

1. Yes

2. It was a charge off a year ago, but I paid the payment arrangement on time every month.

3. No


thanks everyone, I'll just have to slowly rebuild my credit.

The problem is the payment arrangement. Every time you make a payment the account updates. That makes it look like a new charge-off every time you make a payment. The original charge-off maybe 1 year old but the way it is reported makes it look new every month. It sucks that you are penalized for doing the right thing but that seems to be how the system works.

What I would do is get a secured card to start reestabilishing your credit. Also, join a credit union. They are usually good to their members.

 

[kt_mom]

1. Yes

2. It was a charge off a year ago, but I paid the payment arrangement on time every month.

3. No


thanks everyone, I'll just have to slowly rebuild my credit.

If you have a charge off but you paid it off either in full or through an agreement with them then you can probably dispute the wording in your credit report to show paid in full as agreed for the less than the origonal amount.

We did that with a car last year. We had a buyer for it but it was less than what we owed so I called the bank. They agreed to take the lesser amount. When I checked my credit report later on it showed as a charge off. I called the bank back as well as filed a dispute through equifax and it was resolved to show that it was paid in full as agreed for less than the origonal amount.


Now that's a hit to my credit as well but not as bad as the charge off is. So it's worth looking into disputing the wording depending on what your circumstances were.

 

[Bren's Mom]

There ARE some things you can do to up your credit score.

Go to creditboards.com and read, read, read, read, read. Read everything on the credit forum. You will learn alot. After you've read some you might want to make a post about your specific situation and get some feedback.

Some of the things you can do are:

To send a letter (you can find this letter on CB) asking the creditor to remove the negative marks on the account since it's paid. This does sometimes work, believe it or not@

You can also dispute everything negative on your credit report. Creditors have 30 days to respond (verify) the info. If they fail to do so, the account comes off. This actually does happen as well, perhaps not often but it happens.

Establish selective positive credit. CB can help you determine which cc to apply for with your credit score that you have a good chance of getting and will give you the highest credit line. Use sparingly.

To give you an idea, I was able to get my now dh's credit score up 100 points in just a couple of months using some of these tecniques. This was over 5 years ago now. And it was alot of research beforehand and then alot of work to do...but totally worth it!

 

[Planogirl]

You can dispute the chargeoff wording and it might work but the company is under no obligation to remove it. They can say that they placed the account in chargeoff status and there it will remain no matter how much you pay. Unfortunately it's within their rights to do this.

True that you can dispute and the creditor has 30 (or 45 in the case of free annual reports) days to respond. If they don't respond the account either comes off OR is changed to reflect whatever your dispute is. For example, if you dispute a delinquency and the company doesn't respond, the account won't be removed but the delinquency will be.

 

[Lisa loves Pooh]

To quote Dave Ramsey--your credit score is an "I love debt score" and there are two places to be--"nul" (or zero as he erroneously claims his is) or very high.

The only way to get your score higher is to borrow money and pay it.

If you have bad stuff on your report--it only comes off if it is in error.

I had a few negative hits (legit, though one techinically was not, but legally was). I had an attorney come put a note on it for me. But they were paid.

It didn't harm my ability to get a car loan or home loan later on. But I'm not sure if it was b/c the amounts were not very high. One was an erroneous phone bill (in my name, but complex paid it per lease--odd, weird--but fixed). The other was a bill that a hospital decided to not bill me and instead send it straight to collections. Once discovered, both were taken care of promptly. The phone bill required an attorney to intervene. At the time I was a student at UF and I utilized student legal services for free.

 

[DisneyBamaFan]

To quote Dave Ramsey--your credit score is an "I love debt score" and there are two places to be--"nul" (or zero as he erroneously claims his is) or very high...

Agreed. It is a system that encourages people to accumulate bad debt...

 

[golfgal]

Agreed. It is a system that encourages people to accumulate bad debt...

No it is not. The idea is to show you can handle installment debt and revolving debt. If you have a mortgage and a credit card and make your mortgage payment on time every month and pay your credit card bill in full every month you will have excellent credit. If you have too many credit cards, too many loans your score goes down. It in no way shape or for encourages having debt.

Keep in mind that a lot of things are tied to your credit report. If you have bad credit you are probably paying a LOT more in car insurance rates then someone with good credit for one example.

 

[DisneyBamaFan]

No it is not. The idea is to show you can handle installment debt and revolving debt. If you have a mortgage and a credit card and make your mortgage payment on time every month and pay your credit card bill in full every month you will have excellent credit. If you have too many credit cards, too many loans your score goes down. It in no way shape or for encourages having debt.

Keep in mind that a lot of things are tied to your credit report. If you have bad credit you are probably paying a LOT more in car insurance rates then someone with good credit for one example.

But why would a person need to have a single credit card to have good credit? Why would a long history of paying your mortgage, car payment and student loans not be enough?

The answer is very, very simple - because the banks have rigged the system. The need you to borrow money at higher interest rates, so they require it. Sure, they say that you don't have to carry a balance - but they know that people will slip up eventually.

It is a system manipulated by the banks...