Ask me anything about your Credit Score

[latefordinner]

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I don't understand this post. You are wondering why you are considered a credit risk? You regularly pay late, you had a car repossessed, and you have 17 traffic tickets.

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I didn't say I don't understand it - I simply said that I don't think late payment persay correlates as strongly with risk of default as the FICO score makes it and that given the easy computations involved separating out someone that has had credit for 10+ years and never defaulted but has a history of late payments vs someone that has late payments and is at a higher risk of default would be possible if they wanted them too.

[latefordinner]

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They aren't just going to stop sending notices they will eventually issue a warrant for your arrest if you don't get those tickets resolved.

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nah doubtful, first off the state that they are in, i'm almost positive, doesn't issue arrests for unpaid parking fines (other sorts of fines would be different) and secondly they were paid off the year i got them. (and thirdly they have already been referred to a collection agency - collection agencies can't arrest you to get debt from you) the fact that they just now popped into someone's computer 5+ years later and they are demanding that I show them my copy of any checks that i wrote to pay them off is rather ludicrous. it is clearly some computer error somewhere where these just popped back up and I prefer to think that if I wait long enough the computer error will fix itself. ostrich. head in sand. my approach to dealing with beaureaucratic messes

if i still lived in that state they could probably seize my state tax return or deny me car registration. as i don't, i'm not concerned. [censored] em.

[SossMan]

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Is it true that to get a great credit score u have to take out actual loans and not just use and pay your credit cards?

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Somewhat. They are looking for good credit mix. Having an auto loan, two credit cards, a mortgage, and a student loan all paid on time and not just recently opened is close to ideal. Every situation is different, though. In general, it will help if you get a good mix of obligations without overdoing it (after the initial dip for having a new account).

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I never ever had a real loan until I got a mortgage two years ago. Paid for the cars with cash. Never had checked my credit score. All I had was >20 years of credit card debt that I always paid off monthly and essentially never carried a balance on ('cept for like the 0% APR for 9mo offer). My credit score ranged from 790 to 820 from the three agencies.

So no, you don't have to have real loans to have a good credit score. But I'd wager a mix of credit that you've handled responsibly will get you there faster.

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That's correct.

[The4Aces]

In August 06 i got a phone with veriozen. I canceled it withen 14 days becuase of poor service where I live. If i canceld withen those 14 days I was not supposed to have to pay anything. They keep sending me a bill for $15. Is this eventually going to end up on my credit report? If i dont pay this?

[johnnybeef]

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If my credit is busto... How do I fix is ASAP?

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you don't.

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Ok, so for those of us who were stupid in our 20's; what is the best way to restore one's credit? For instance, let's look at a hypothetical person named Ronny the Chief. Ronny applies for and uses a few credit cards in college (like many other students do.) Since Ronny is a student and doesn't have any income coming in, he uses credit cards for the majority of his purchases. Lets say that he maxes out all of said credit cards, and then makes a few minimum payments on several of them. After a few months, Ronny stops making payments on a few of them, and before you know it, Ronny stops paying credit card bills all together. Ronny's parents come to the rescue and pay off a few (maybe all) of these cards which have been defaulted on. Ronny thinks that he learns his lesson, but 3-4 years later, Ronny opens up a few more cards and maxes them out. Ronny makes a few payments here and there, and then starts to default on them once again. Ronny has a few student loans (which are in good standing) and all of his credit cards have now gone to collections. Ronny talks to collection agency employees about settling the debt, and has the intent of paying off his debt, he just wants to get it paid off for a reasonable price. Now that Ronny is almost 27 and wants to get his finances in the right direction, how long will Ronny have to wait before his credit gets to average? What steps besides paying off the collections should Ronny take to get his score from the high 400s to the 700 and above range? How long will this process take, and if Ronny has ~20k in debt on his credit report, would bankruptcy be something worth considering?

[Dazarath]

Ok, so you say credit cards, auto loans, mortgages, and student loans (paid on time) are good for the credit score. Is there anything else that would help? I have a couple CCs, which I pay the full balance every month. I'm a bit too young to be buying a house or a car, and I don't receive financial aid. Are there other things I could do to make sure I have an awesome credit score (or at least increase the chances of it) when I finally decide to buy a house/car? I think my score is somewhere around low-mid 700s last I checked.

Oh, and thanks a ton for doing this thread. I'm sure many of us really appreciate it.

[Ron_Mexico]

What is my credit score

[SossMan]

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In August 06 i got a phone with veriozen. I canceled it withen 14 days becuase of poor service where I live. If i canceld withen those 14 days I was not supposed to have to pay anything. They keep sending me a bill for $15. Is this eventually going to end up on my credit report? If i dont pay this?

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Only if it goes to collection. I would try to get it cleared up with them since collection agencies are notoriously bad at letting go. Do you have the evidence that you cancelled?
I have had good luck w/ Verizon customer service on issues with my bill in the past, so it probably won't be the typical customer service center ratrace.

[The4Aces]

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In August 06 i got a phone with veriozen. I canceled it withen 14 days becuase of poor service where I live. If i canceld withen those 14 days I was not supposed to have to pay anything. They keep sending me a bill for $15. Is this eventually going to end up on my credit report? If i dont pay this?

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Their is no doubt on either of our sides that I canceled.

Only if it goes to collection. I would try to get it cleared up with them since collection agencies are notoriously bad at letting go. Do you have the evidence that you cancelled?
I have had good luck w/ Verizon customer service on issues with my bill in the past, so it probably won't be the typical customer service center ratrace.

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They are charging me $14 for data useage during that period. I was under the impression (as the guy told me at the store) if i canceld withen 14 days I would not have to pay anything.

What is the likelyhood a $14 bill would go to collections?

[SossMan]

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If my credit is busto... How do I fix is ASAP?

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you don't.

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Ok, so for those of us who were stupid in our 20's; what is the best way to restore one's credit? For instance, let's look at a hypothetical person named Ronny the Chief. Ronny applies for and uses a few credit cards in college (like many other students do.) Since Ronny is a student and doesn't have any income coming in, he uses credit cards for the majority of his purchases. Lets say that he maxes out all of said credit cards, and then makes a few minimum payments on several of them. After a few months, Ronny stops making payments on a few of them, and before you know it, Ronny stops paying credit card bills all together. Ronny's parents come to the rescue and pay off a few (maybe all) of these cards which have been defaulted on. Ronny thinks that he learns his lesson, but 3-4 years later, Ronny opens up a few more cards and maxes them out. Ronny makes a few payments here and there, and then starts to default on them once again. Ronny has a few student loans (which are in good standing) and all of his credit cards have now gone to collections. Ronny talks to collection agency employees about settling the debt, and has the intent of paying off his debt, he just wants to get it paid off for a reasonable price. Now that Ronny is almost 27 and wants to get his finances in the right direction, how long will Ronny have to wait before his credit gets to average? What steps besides paying off the collections should Ronny take to get his score from the high 400s to the 700 and above range? How long will this process take, and if Ronny has ~20k in debt on his credit report, would bankruptcy be something worth considering?

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Well Ronny...err...Johnny,

Paying off in full is always better from a credit standpoint than settling for less than the amount due. When you settle, there is a note on the report that shows this and it will stay with you for 7 years. If you pay off in full, the defaulted lates will still hurt you from the original creditor, but the collection agencies will stop reporting. They will still be on your report, but they will cease to be active accounts. What this means is that in a year or two after you pay off the collection agency in full, you can file a dispute and they will likely not respond within the 30 days since they have nothing more to gain from you and it can come off (again, this is borderline illegal, definitely unethical). This is precicely what a credit clean up company would do for you, but again, you can do it yourself at www.annualcreditreport.com

Bankruptcy might actually be a good option for you, but I'm not versed enough in the laws to recommend one way or another. Talk to a BK attorney.