Credit and Credit Scores: A short lesson

[Dave I]

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What are valid reasons to dispute a mark that will actually work?

I had a roomie eff me hardcore a couple years back and leave me with a huge gas bill to pay off myself. The gas company put me on a payment plan, which I didn't pay because I was trying to pay them off in one lump sum. Apparently, missing my payment plan payment led them to put a mark on my credit for past due 60 days (which there was no way in hell I went 2 months without sending them a payment, I just figured they used the 60 days from the back sum I owed). My account with them was soon paid in full and I moved away from that place shortly after.

I once again have an account with the same place for the last year and a half with no problems.

Do I have any chance?

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Not likely. Maybe if the 60 days was truly incorrect. But, if it was still 30 days late and was changed to that it probably wouldn't make much of a difference as far as your credit score goes.

[Dave I]

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I don't think that's totally correct. while payment "history" drops off after 7 years, the standing in which the account was closed stays on forever. In other words, it will say "Account closed by grantor" until he dies.

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It is correct. The history is not permanent. Even "good" records of closed accounts fall off after 10 years.

EDIT: Not positive on the 10 years, but I am positive records will fall off completely.

[IggyWH]

I just did a credit report and here's what it says :

">Maximum delinquency of 60 days occurred in 06/2004 for $ 49<"

Does amount matter when people look at your credit history? I can't imagine a $49 past due 60 days is as big of a deal as say $2k past due 60 days.

Not that it matters much though because I won't be buying a home or getting a loan for anything anytime soon.

[jman220]

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You deposit $5000 (arbitrary amount) into a 6 month Certificate of Deposit earning 6%. You go for a secured loan at a lower interest rate (may need a cosigner). You pay off the loan, and earn some small interest in the process, and increase your credit.


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Please point me to a bank that loans money at a lower interest rate than their CD's.

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I was waiting for someone to say this. If you could get a bank loan at lower interest than they're paying you, well then.......... Step 3: Profit.

Also, BBV: I just checked and my credit score is 744, can I get anything with that, like maybe a free pony?

[Dave I]

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I just did a credit report and here's what it says :

">Maximum delinquency of 60 days occurred in 06/2004 for $ 49<"

Does amount matter when people look at your credit history? I can't imagine a $49 past due 60 days is as big of a deal as say $2k past due 60 days.

Not that it matters much though because I won't be buying a home or getting a loan for anything anytime soon.

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One delinquency will not "ruin" you. Not sure on the amount past due mattering but I would think it does a little.

Also, the weight of any negative mark drops over time. Take 2 of the same delinquencies, one 4 years old and one 6 months old. The 6 month old one will weigh much more heavily on your score.


One more thing, almost nobody is looking at these things physically anymore. It is also computerized and based on the F.I.C.O. scoring model or some similar derivative.

[TiK]

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You are entitled to 1 free credit report per year from each agency (obtainable at annualcreditreport.com), therefore, the smart consumer pulls his credit once every 4 months, each time from a different agency.

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I've gotten this report, and it gives me a credit history, but no actual "credit score". There are links though to get a score by paying money. Is there a way to get the credit score for free as well? Or is the free part only the history?

-Tik

[BradleyT]

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They will be removed automatically after 7 years starting from the date they went to collections.

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Actually the removal date is 180 days after last deliquency + 7 years but close enough.

One thing people should avoid is re-aging bad accounts. Like if ASU found his old collection letter from ~2000 and contacted them and said, "I'll pay you $200 for this $1200 I owe" it would show as a paid collection for seven years from TODAY.

If someone for some reason felt obligated to pay, get the collection agency to agree in writing that they will delete the tradelines from your credit report in exchange for payment.

If your accounts are 3-4 years old and you don't need major credit in the next 3-4 years you can pretty safely ignore all your collections. I got a car loan at the best rate available and I had 3 collection/never paid items on my report (but mine were 6 years old).

[BradleyT]

Your score usually costs money.

Just go to www.myfico.com and do the free 30 day thing and BE SURE TO CANCEL IN TIME.

[A S U]

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They will be removed automatically after 7 years starting from the date they went to collections.

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Actually the removal date is 180 days after last deliquency + 7 years but close enough.

One thing people should avoid is re-aging bad accounts. Like if ASU found his old collection letter from ~2000 and contacted them and said, "I'll pay you $200 for this $1200 I owe" it would show as a paid collection for seven years from TODAY.

If someone for some reason felt obligated to pay, get the collection agency to agree in writing that they will delete the tradelines from your credit report in exchange for payment.

If your accounts are 3-4 years old and you don't need major credit in the next 3-4 years you can pretty safely ignore all your collections. I got a car loan at the best rate available and I had 3 collection/never paid items on my report (but mine were 6 years old).

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I got a car loan in 12/03 that was terrible. Like really terrible, but I needed the car. I paid it off by 1/06. That was my only line of credit from late 99 - early 00 till about 7/06. All my delinquencies are 6-7 years old. So I plan on pulling my report soon and waiting until stuff just goes away. I did recently get a 2.1K credit line from Chase, which was pretty surprising, so I think my score is improving alot.

[Bartman387]

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Who gives a crap about your credit score? Pay cash for all, live without debt, and you're set. This is one of the craziest thongs out there. Being concerned about your credit score so you can be in debt forever.

Anyone heard of Dave Ramsey?

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For most of us, we need a good credit score to get good home loans, car loans

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Why not buy a car with cash? Why not live within your means and save up? why make monthly payments on something that does nothing but lose value?