Hello all, first post here. I am a Computer guy at a Big 10 college and I make a decent wage of about 60,000. I recenlty started getting into the "looking for a home" game and started doing some applications to see what I could get pre-approved for and the rates and such. When I didn't get any immediate approval type situations I started feeling like something weird was going on so I got my credit report and FICO score from teh agencies and I was SHOCKED to see that it had dropped to 635! I know it was over 700 the last time I checked it (maybe 1-2 years ago?) I think I may have hamstrung myself by thinking I was doing somethign smart but actually didn't. Here's the deal: I had about 6 revolving credit cards with random balances and intrest rates ranging from 8-20%. This seemed bad to me because I was paying a lot in intrest every month and not so much on the principals. So when I got into this "fiscal responsibility" phase I got a Discover card that had around a 4500 limit but ZERO% intrest for 12 months. So my strategy was to close out my other accounts and transfer all the balances so that I could pay off the amounts with 0% intrest instead 6 accounts with 20% intrest or whatever. The problem is that I think this screwed me because my FICO score thing says "revolving credit is too near revolving limits" and "revoloving history is too new". So did I screw myself there and what can be done? This seems so stupid because fiscally this was MUCH more responsibly and effective than the prior situation but it GAINED me the NEGATIVES listed above! The other thing listed was a collection which turned out to be a $279 phone bill I didn't pay when I moved that got sent to a collection agency which tracked me down and I paid it immedaitely--it was only 279$ which of course is nothing but I think that $279 has had a big negative impact on me. The bookend to this is that it says "the time since collection on your record is too short". I assume there is nothing I can do about this because I DID pay it but I can't make time move any faster! Does anyone know how long this collection will stay on there and when the "too soon" flag might disappear? So I guess I'm looking for advice/answers on the stuff above and maybe any other advice you all might have to get that FICO score up and how long it might take me! Also it lists 3 inquires in the last 12 months, one by Discover (when I consolidating my revolving accounts), one from someone called "FACTUAL DATA" and a third one from "GECC" which will be one year old on 7/10 so that one is about to fall off. Is this number bad? I am just really mad about that stupid collection and that stupid revolving thing because I thought I was being smart but I may have screwed myself. Do you think mortgage lenders accept any of these explanations or do they not really care about anything other than the score? Thanks in advance and sorry for my rambling! I am just shocked by that number and want to get on top of this as fast and aggressivly as I can with a good strategy!
were the cards paid off or closed? As far as mortgages go, your credit score isnt bad. If you can pay for delete the collection, it should go back up. Have a mortgage professional review your situation and advise you if anything else needs to be done. But from this mortgage lender, i think you'll be in fine shape once that collection gets deleted. Happy 4th!
"If you can pay for delete the collection, it should go back up" Is ther a way I can get this to get off my report? I did pay this on 4/1 so in the "Collections Section" it says Balance Date: 4/2005 Balance Owed: $0 Last Payment Date: 6/4/2005 [I don't know what this date means because I paid that thing on 4/1] And I closed all those 5 revolving accounts I had before I consolidated onto the Discover card. The yall say "account closed at consumer's request" So am I on the right track here? Just pay down that Discover card so that it *appears* like I am not near my credit limit on revolving accounts? Is there some mathematical point at which the weighting computer gets less worried? Like if you limit was $100 and you had a 31$ balance would getting it to 30$ be some sort of magic dropoff? That collection really bothers me because I paid it instantly but it is still on there; is it just a stupid thing where it stays on there for a set amount of time? Can I get it removed faster somehow? Like contesting it or something? And finally, does your current income appear anywhere on a credit report? My employer is listed on there but nothing more than that. Thanks again!
I'm pretty new here, but from what I understand from reading the boards here (and Finance section on FatWallet), you: a) probably shouldn't have closed the other credit accounts (that's why bad cards go into "sock drawer"); b) never settle for paying CA (do some searching on this); As for other questions, I am not sure so I'll let the pros answer them
Sometimes Credit Card companies will allow you to reopen your account, if it is within 60 or 90 days. See if you can do, and that might fix some of the problem. BUT, don't let them do a hard inquiry on your credit report to re-open. Otherwise, you could be hurt a lot more. You also don't need to open all of them, but reopen the oldest account if possible.
Good advice from everyone. FYIâ?¦ the collection will stay for 7 years unless you can have it deleted. You might try calling the CA and asking them to delete it. They may do it since you did pay right away. Otherwise, it may be tough to win a dispute with the CRA since it is paid. To answer your question on a â??mathematical pointâ? of the debt ratioâ?¦ There is no magic drop off point, and many factors go into the FICO calculation. But the experts say to keep your balance to credit limit ratio in the neighborhood of 10% or less utilization. Your story is indicative of how FICO scoring is NOT all about just paying your bills on time. One must know how to pay their bills in order to maximize their score. Good luck.
yes I agree FICO score is like looking at the wake of a boat to determine the direction of the boat. FICO score is like the best time to borrow money is when you don't really need it. FICO score is like a mad house run by mad men. FICO score is a wonderful method that lenders can use to extort every possible drop of interest from consumers. FICO score is one giant game. Funny, you will never hear your lender say, "hey you are way over quailfied for that product or loan!" Dog
First, I understand how you feel about your score, and it not representing how you view yourself. But, to a course of action: 1) Try for removal of the collection item. Call the collection agency re: the $279.00 phone bill, and request that they delete (make sure you say delete) the listing from ALL credit reporting agencies. 2) Call the original phone company, and see if they will help in removal of the listing with the collection agency. 2) If the collection agency does not, or will not delete, then review for the boards for how to request "Validation of the item", and concurrently dispute the tradeline. 3) Try to pay down the Discover card to 50% of your credit limit. Your original plan of paying 0% interest on your debt made sense for pure financial reasons, but the credit game is another story. 4) Review the boards, and the website www.fico.com for how your FICO score is calculated. Forewarned is forearmed! 5) If you can wait for your home purchase, try to get your scores up first; it will make a huge difference in the interest rate you end up paying.
Well, I have to disagree with you about FICO. The problem we have as consumers with our FICO scores is strictly a matter of perspective. We view our FICO scores as erroneous because we feel they do not represent how we rate our own characters. But FICO was not developed for us; it was "engineered" for lenders to assist them in a financial decision making process. If you look at FICO scores, and the scoring model, from the perspective of someone lending money, then maybe the scores make sense. Would you lend money to someone you knew had "blown off a debt"? Think about it from the point if it were your own money you were lending out...what wold you base your decision on? Would you want to loan money to someone who "needs it because they're in financial trouble"? Or would you be more comfortable lending it to someone who has money, and is responsible, who "doesn't need it"? Perception is everything; if you look at your FICO score from that perspective, you'll understand it and manage it that much better.
Did you provide the phone company with your new address to send the final bill to? Did you open a new account with the same phone company at your new address? In other words, is there a reason to claim that it was sent to collection due to an error on the part of the original creditor? Under FCBA, creditors of "revolving accounts" are required to send statements in a timely manner (so many days before due) to the address indicated by the consumer, and they must process and use new addresses provided by the consumer within a certain period of time. If you give them a legal basis for correcting, it may help you get it removed. If this doesn't help directly, a complaint to your public utilities commission might get the decision made in a different part of the phone company to get you off their backs.
Thanks for the education on my FICO score. <snip> In general and most of the time I try to post in general, to avoid being misunderstood as possibly a personal rant being viewed a personal attack. As far as the general unknowing population or maybe some new members to credit net, FICO scoring might as well we speaking in Latin. I personally understand FICO scoring all too well and exploit every weakness and flaw in the system that I can to the full my advantage. As far as FICO scoring being a good predictor of defaults, there are no double blind or control tests to prove this either way. I would prefer to err on the side of caution, and will assume that it in general it is a poor predictor of future defaults. Having a car accident, losing your job, divorce, are probably events that when they happen (and they could happen to anyone for any reason!) are better at predicting defaults then what your FICO score is at any given time. dog
