I'm planning to apply for a car loan. am currently rebuilding my credit. after going through a credit counseling program for about 2 yrs, I have paid off all 10 out of 3 credit cards in my name. the remaining 3 are new ones and were not included when i went through the credit counseling program. i have a copy of my equifax credit report. the account status says PAYS AS AGREED to all of my credit cards. i called equifax and they've explained to me that this is actually a positive term. however, as i was reading the detailed summary, the description says, PAID ACCOUNT/ZERO BALANCE -ACCOUNT CLOSED BY CREDIT GRANTOR. Is this bad? Plus, in one of my cards, the description says, CHARGE. I heard that CHARGE-OFF is bad, but what about CHARGE? Can somebody explain this to me. I really need this car loan but i don't want to apply yet until i have all these straightened out. Thanks...
another thing, if PAYS AS AGREED is good, how come am still being turned down by some credit card companies? i don't want to be turned down for a car loan. what do i need to do?
Do any of the accounts have any numbers associated with a "wage earners or similiar arrangement plan"? See the explaination page that came with the report. This shows you got into finacial trouble even though you paid them all off. The credit people tell me that's a bad sign, just as much as a BK7 or BK13 is. Go figure. A "credit closed at credit grantor's request" notation is viewed as bad. You want them all to show "closed at consumer's request." You might want to try contacting those creditors and asking that they change the listing, as it is negatively affecting your ability to obtain credit. If they won't, try disputing with the credit bureaus. Mind you, I'm no expert here and I am basing this on what I've read/heard. Perhaps others will have other suggestions.
I am like you and I know for a fact that whoever answers the phone at these credit bureaus doesn't know what the hell they are talking about. So don't rely on them. Closed by grantor is VERY negative and is a coded way of saying that you suck as a credit risk. That one thing alone will keep you paying ridiculous interest rates on whatever car you eventually purchase. I also think (though I'm not certain) that "Paid or paying as agreed" is not negative at all but I have only seen this language in TransUnion reports. Experian says "Open/never late" and Equifax uses a rank score with "1" being good and "9" denoting the worst such as a charge off. What I would do (and what I'm actually doing) is save money, alot of money - say, about 20% of the purchase price of the car you want) and while you are saving this send letters disputing each item on your credit report one by one by one until you get it all taken care of. I had alot of negative stuff on my credit report and did a blitzkrieg of disputes by certified letter and return receipt. I paid some off, got some deleted on procedural grounds (they failed to verify the debt within 30 days as requested), and some just fell off due to old age. In any case, I am literally waiting another year before I seek a car loan to replace my 89 buick. I currently have only a year long history of good credit and have heard from reliable sources that two years is pretty much the threshold before I should expect to get prime credit offers.
A little updated information: Closed at Credit Grantor's request used to carry negative connotations for your credit, but no longer does. The reason is that today's marketplace is much different than the one that was manually inspected years ago. The wildly popular advent of credit scoring and the explosion of credit vendors essentially changed the entire landscape for the "willy-nilly" coming and going of creditor/debtor relationships. In years past, about the only explanation for a creditor closing an account was because the debtor did something bad (missed payments, etc.). In today's marketplace, it's all about making the creditor money. If Visa X credit card has a customer who charges $1,000 per month and pays it off within the grace period, never goes over the limit, and buys no ancillary services (you know...all the crap they try to sell), then that customer is not very profitable. Such vendors can and do close such unprofitable accounts, even though, by all reason, the customer is a very worthy and responsible credit risk. So, the Closed By Credit Grantor has no bearing anymore, neither in the FICO score, nor by manual inspection, UNLESS there is something such as late pays, behind it. It is not something to worry about.
Some cards, such as American Express, are labeled "Charge" as opposed to "Credit" such as a Visa. It's a distinction between an obligation that is satisfied in full each month versus a revolving credit line. The term "Charge off" is very bad...it indicates a bad debt. "Pays or Paying as agreed" is very good. It's the same thing as R1 on Equifax or "Open/Never Late" on Experian. Bear in mind that you are getting interpretations of the same data from three businesses that display it to you in a different manner. For, example, If you have a Visa that you've kept current for three years, you'll see the following: TU -Pays or PAying as agreed EQ - R1 EX -Open/Never Late If you had a late 2 years ago, but since then you were current , you would see: TU -Pays or Paying a Agreed. In the past 36 months reviewed, one time 30-day late EQ -The designation of R1 would still be there, but there would be a notice that says, "one time 30 days late, R2, 5/98" EX -would say, "Open, pays as agreed, except for one time 30-day late, 5/98" So you see they are all working from the same data as reported by the creditor, but they are simply giving it to you in a "user friendly" form, and they each have their own version of that. The data that is used in scoring models, etc is just a collection of delimited fields that is interpreted by various computer programs, and as such, would be very hard for a layman, using visual insepection, to understand.
