Hello everybody, I'm new here and have a couple of questions for the experts. Let me start by telling my situation. I haven't applied for any new credit in years. I had some problems in the 90s and swore I would never be in debt again. Anyway I have been thinking of purchasing a new vehicle and was thinking of financing it. Anyway I pulled my credit reports and although they aren't completely screwed they aren't great either. All 3 reports were in the 630 to 660 range. There are only about 3 negative items on each report and I am trying to fix them as soon as possible. One has already been deleted from all 3 reports due to the fact that it was completely bogus and as soon as I disputed it, it went away. I have 2 very small medical collections that I am trying to take care of right now. Both are for $100 or less and I hope the collection agencies will agree to delete them in exchange for payment. They are both about 6 years old and considering in 2002 between me and my insurance provider we paid over $1 million dollars in medical bills that year it strikes me funny that the doctors are crying over a couple hundred bucks. The only other negative on my reports was a car loan I paid off in Dec of 2001 that is showing a 90 day late payment way back then. The other problem I have is a lack of current credit. Once I got my finances in order in the early 2000's I refused to charge anything. Both my vehicles and my boat were purchased cash, I closed my credit cards and use only a debit card. The only thing I owe is about $30,000 left on my mortage. Little did I know this lack of active credit was killing my credit scores. Anyway I figure if I can get those 2 small medical collections off my credit reports all I will have left is that old car loan with a 90 day late payment notation. My first question is would it be advisable for me to try to get that off my record? My fear is if I dispute it for any reason, and they just delete it there goes one of the few pieces of credit history on my report. Would losing that credit history outweigh the one old 90 day late payment? Question 2 considering I have already had the 1 bogus collection removed and am thinking I may be able to get the 2 small medical collections removed do you think this could get me up at least in the 700 range? I realize the math is pretty complicated I was just wondering about how much weight each negative item carries. I realize it is going to take me a while to build my numbers back up as far as my credit history goes. I figure if I take out a car loan for the vehicle I am looking at now and slowly add a credit card here and there it won't take too long to get up in the excelent range. Any input would be greatly appreciated.
You might let the 90 day late on.Yes it's a neg,but lack of history is affecting your score.If you have a relative with a good credit card history have them add you to their cc as a authorized user no card just your name.You could try to get them collections off.
I don't know if I'd even worry about paying the medical bills. They may be out of SOL, and they'll be off your report shortly anyway. They aren't having that much negative impact. I doubt if you'll see more than a few points difference in your score. I'd leave the car loan alone as well. As jjgross pointed out, losing the history will probably hurt you more than the late. And again, it will drop off in a few months anyway. Your real problem is the lack of credit history. Unless you can get an authorized user account added, I doubt seriously that you're going to see a score near 700 anytime soon. If you have a relative who will add you to their account, that is ideal. They don't even have to give you the card, so there is no way you could mess them up. You just want the tradeline to report. It should be an account with a fairly long history, no lates, and a utilization of 30% or less. If you don't have a family member who can do this, there are companies that sell AU tradelines. One of them is a poster here under the name apexcrsrvc. You may want to contact him and see if he can help you.
Thanks for the referral Hedwig! That being said, we may be able to assist with the two old medical debts but, leave the car loan alone. You need that history in terms of installment accounts. If you would add one ten year old revolving account, I'd speculate you'd be around a 720 mid-score without much issue. Again though, see if you can get a relative to do it before coming to us. If you don't come to us, be sure to do your due diligence and make sure they're a Better Business Bureau member, licensed, bonded, registered, etc.
Thanks for the answers guys. Let me ask another quick question here. On the subject of building a credit history. I am not completely without history, I do have my mortage and a couple of old car loans showing on my report, I think the average age is around 10 yrs. That said my problem is no history whatsoever of credit cards and revolving accounts. I closed all of them in the 90s and they have since disapeared. I have been reading some of the posts advising not to open too many credit card accounts too quickly. My question is would it be as critical to me considering I do have some credit history even though it is not the same type of credit? Let's make this a 2 part question, I mentioned in my original post that the reason I pulled my credit report in the first place is I was thinking of buying a new truck and financing it. I do not really have to do that I could pay cash for it or even pay cash now and get financing a couple of years down the road if needed. Anyway considering I am in the position that I don't have to have a good credit score in the imediate future, would it hurt to go ahead and get 2 or 3 credit cards now? I guess what I am asking is if I were to opt to go ahead and take the hit of new credit now would my score increase quicker in say a year than if I did it slowly? I hope I explained it clearly, I know it is somewhat of a complicated question.
What i would do is get a couple of cards and sock drawer them.If you want to have a nice dinner use one then pay it off that way they increase your credit limit your score will go up if you keep what you owe under 20% of the cards limit it will raise your score.
Try adding the AU accounts first. That gets you history quickly. Then get the car loan. Then, since you won't need credit for a while, apply for a card or two. Start using them and paying each month (keep utilization below 30%) and you'll soon have your credit history built. That way you get the auto loan, then take the score hit for some new accounts, then start building again.
Leave it alone. Yes, likely losing the account in your situation would hurt you more than one random late. Since it has been paid off for some time, the law of credit bureaus screwing you says they will delete the whole account, rather than the late. If there from 2002, all things being equal, they are not hurting your score much - if you can get them both removed, then you might jump up, depends on how much you have open and active now. Good plan. Even though you must suffer with "toy" cards (ridiculously low credit limits) don't let them go over 50% of debt to limit, and 30% is ideal.
