Ask me anything about your Credit Score

[SossMan]

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First off, many thanks for taking the time to keep this thread up and help all of us out.

I'm almost 25. My credit scores range from 640 to 646. My credit history from one beureau includes a $1600 outstanding balance (from a $1000 charge off) which is still in collections from irresponsible use back when I was 20. I now have a 20 hour a week minimum wage job at the local bookstore and am making about $600-1000 more per week playing poker, so I can afford to pay it off. Should I? If so, how do I go about contacting them?

I am also considering applying for an auto loan/other credit cards to improve my score (and because I need a car). Is my current bank the best place to go for this, based on my current score and income situation?

Thanks in advance for any advice.

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Well, the honorable thing to do would be to pay it off.

However, from a score perspective, it could be suicide. Here's why.
It's not currently affecting your score that much. I know this because your range is so tight and you said that it's only reporting to one of the bureaus. If it were hurting you, then that bureau would be a lot lower than the other two. By paying it off, you would force the collection company to report to the bureau that it is now paid off and it would update the DLA (date last active) and it would look like it's a NEW COLLECTION ACCOUNT! The bureaus can't distinguish between a new collection and just an old one that got paid off. If you just want it off your record though, you can pay it, then a few months later dispute it on www.annualcreditreport.com and it might come of.

Getting a card/auto loan would certainly help. I'm a fan of credit unions for the consumer debt stuff. Many times, they are not fico driven.

[Warik]

Last time I checked my credit score, it was in the mid 700s - don't remember the exact number because it was over a year ago. I'm 25 now.

I've never had a late payment and have always paid my CC bills in full each month.

I know that having old credit is one of the best ways for me to improve my score right now, so closing unused accounts would be bad. However, I also know that having too many cards and too much available credit is also bad - I have over a dozen credit cards and my total available credit exceeds my annual salary. This credit has never been used irresponsibly and I never really had a need for so many cards, but they're there and I should do something. All accounts are in good standing and I really only use 2-3 of them regularly (AMEX when I can, DISCOVER when I can't, Mastercard when they don't take AMEX/DISCOVER).

So... having all of those open lines of credit and high credit line is bad for my score, but so is closing all the unused cards because the youngest one is 4 years old. That's a lot considering my credit history is only 7 years old.

What can/should I do to improve my score even further? Heck, is there anything I can do or should I just chop up all these unused cards and keep the accounts open?

[SossMan]

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I know that having old credit is one of the best ways for me to improve my score right now, so closing unused accounts would be bad. However, I also know that having too many cards and too much available credit is also bad - I have over a dozen credit cards and my total available credit exceeds my annual salary. This credit has never been used irresponsibly and I never really had a need for so many cards, but they're there and I should do something. All accounts are in good standing and I really only use 2-3 of them regularly (AMEX when I can, DISCOVER when I can't, Mastercard when they don't take AMEX/DISCOVER).

So... having all of those open lines of credit and high credit line is bad for my score, but so is closing all the unused cards because the youngest one is 4 years old. That's a lot considering my credit history is only 7 years old.

What can/should I do to improve my score even further? Heck, is there anything I can do or should I just chop up all these unused cards and keep the accounts open?

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The bolded part is not true. In an above post I detail what does and doesn't affect your score and salary is one of them. If used responsibly, having a bunch of accounts only helps you.
If you never use them, they are probably not helping you much, but closing them would hurt you because of the length of credit history with them.

So, I will give you two choices:

1. Use them a bit so that they start reporting activity again and your score will go through the roof.
2. Chop up the cards and keep the acocunts open and they will not hurt nor help you.

You don't really need the score improvement if you are in the mid 700s and I wouldn't want to take the chance that you make your bills too complicated and accidentally miss a payment and it hurts your score much more than you would have helped it...so I go with #2 in your situation.

If you had a 690 or so, I would reccomend #1 to get your score a bit higher, especially if you planned on making a major purchase in the next few years.

Mid 700s by age 25 is very good. Keep on track.

[eastbay]

How do you ultimately resolve a charge that you dispute and that the other party will not remove that is on your credit report and hurting your score?

Sue? For what? The amount is about $1600. Can I do this myself in small claims?

eastbay

[SossMan]

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How do you ultimately resolve a charge that you dispute and that the other party will not remove that is on your credit report and hurting your score?

Sue? For what? The amount is about $1600. Can I do this myself in small claims?

eastbay

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If you file a claim with the credit bureaus via www.annualcreditreport.com , the other party will be required to prove that the collection is valid. If they fail to do this, the account is automatically removed. If you have proof that it has been resolved (from them or from your records) a credit pulling company can take it up with the bureaus.

I use www.calcoastcredit.com

Mainly because Nadia is my rep.

www.nadiakunich.com

[eastbay]

[ QUOTE ]
[ QUOTE ]
How do you ultimately resolve a charge that you dispute and that the other party will not remove that is on your credit report and hurting your score?

Sue? For what? The amount is about $1600. Can I do this myself in small claims?

eastbay

[/ QUOTE ]

If you file a claim with the credit bureaus via www.annualcreditreport.com , the other party will be required to prove that the collection is valid. If they fail to do this, the account is automatically removed. If you have proof that it has been resolved (from them or from your records) a credit pulling company can take it up with the bureaus.


[/ QUOTE ]

It's not that simple.

The issue is a recurring gym membership charge which was canceled six years ago. I kept it for a year or two, but have moved twice and cannot produce written proof of the cancellation. They have collected no money from me in that time. They have not once contacted me ever in that time, either, despite having a valid phone number the entire time.

I do not believe that it is reasonable for a consumer to retain written records of all canceled subscriptions in writing for the rest of their lives to defend against these bogus claims, or be held liable. Nor is it enforceable under CA law to collect gym fees if you move more than 25 miles away and there is no branch at your new residence, which is the case here. So I believe the law is on my side even if legally I am supposed to keep the written cancellation notice indefinitely (which would be absurd).

So they claim it's valid. I know it isn't. Now what?

eastbay

[squiffy]

Thanks again for your help and this great thread.

I was able to obtain my free credit REPORT from Experian at the website you gave. Apparently, consumers are entitled to one free report each year, from each of the three credit reporting agencies. So apparently you can request one report every four months, as long as you rotate among them.

My question is whether we can get a FREE credit SCORE somewhere. It's been 3-4 years since I obtained my SCORE. And the report does not appear to come with a SCORE.

[squiffy]

SossMan thanks again for all your great work on this!!! It's been a tremendous help.

Good News and Bad News.

First, the good news is that my credit score is 734, according to Experian. That's much higher than I thought. Last time I checked in 6/03 it was only about 700 or 701. But I have been paying all my credit card balances in full and on time, and I have been paying the mortgages on my CA home for 5 years and my TX rental home for 14 years without any delinquencies.

Second, Experian is offering both a free credit SCORE and REPORT if you sign up for their $9.95 per month credit management plan. But there is a 30 day free trial, so if you cancel within the trial period, it's supposedly free.

Third, I still want to raise my score from 734 to 830. This is because my penis is rather small and flaccid. So it would be nice, at least, to pump up my credit score to compensate.

Fourth, I will keep you all posted on my adventures in credit card arbitrage. Over the past month, I have been able to get 72K in free balance transfers at 0% interest until Aug/Sept./Nov. 2007 ( And I got one additional card offering a limit of 20K on all purchases at 0% interest until Feb. 08. So that's a total of 92K so far, and the lenders are still sending me offers. It's pretty wild.

My concern is that this is going to hurt my credit score a lot, just to squibble out a few thousand dollars in arbitrage interest at 5%.

So I want to understand how to try to maintain a high score, or at least help my score recover after it takes a hit.

Hopefully I won't get hit by a car, go into a coma, and wake up 2 years from now, with empty bank accounts and ruined credit.

I currently have 9 separate cards with total credit limits of $129,800. They are from 5 different issuers, with one issuer offering me 4 cards. It's weird how they keep trying to push more credit on you.

But I am not using two of those cards with about 32,500 in credit because they have no 0% balance or purchase offers. But I won't close them. Just let them sit for now.

[HoosierAlum]

I was also wondering how my credit score is impacted when I apply for a credit card and/or someone looks up my credit file.

[MrX]

Soss, ty, informative thread.

Is it true that nothing greater than 7 years old is seen on your credit report (specifically late payments)? This is assuming you have never had a bankruptcy.