Parents borrowed under my name

Was this loan opened under your name and identifying information, or are your names similar, and it has been erroneously posted to your report? Was the loan taken out by both your parents?

Can you trust them to not do this again in the future? If their credit is fragile, they are setting you up to pay their debts if they do. If their credit is fragile, and their finances are too, they should not be borrowing additional amounts, even under their own name. What effect would it have on them to have their credit history accurately reported?

 

For what dates are the lates posted? Since the 7 year reporting period starts from that time, that will determine how long they stay on your reports if you do nothing.

Never mind. I see it is July 2004.

What does your credit history show, separate from the negatively reporting loan? How many accounts, how much available credit, how old is your oldest account?

Have you considered buying a used car, and saving the presumably outragous interest payments? At least bank your misfortune.

 

Re: Re: Parents borrowed under my n

I would go to the credit union and speak to one of the loan officers. Credit unions will often work with you more than a bank or finance company. Tell them what your situation is and see what you qualify for. Ask them what, if anything, you can do to improve your chances.

My credit union uses a different scoring model, at least for car loans. When I went to get a loan several years ago, they told me my score was 3somehing. I couldn't believe that, because the scores I pulled were in the high 600s and low 700s. But they said they had a different system and low scores were better.

So you never know until you ask.

 

Re: Re: Parents borrowed under my n

What is outstanding balance, compared to total available credit? What are total of revolving credit accounts?

With a balance of $6000, if your total available credit is only 10k to 15k, your utilization would likely depress FICO. It is not clear, however, if just opening an additional $5k account, and not using it, would improve this within 6 months, since initially the inquiry to open the account, and its short payment history, would likely pull scores down. Do you have any hard inquiries in the last 6 months?

Somewhere around 6 months to a year, with no lates, a new account would likely pull scores up. That is why you apply for credit when you don't need it, when you can shop for best terms, not when you are in a jam.

Having a small amount of credit, and using it all, is bad. Having a lot of credit, and using the same amount, is good.

 

Re: Re: Re: Parents borrowed under

In effect, you are using $5100 out of $11000 available credit. (I am ignoring the difference between the loan and revolving accounts. I am not sure how FICO scores that.)

This is nearing 50% debt to available credit, so it is probably depressing FICO. The account with lates probably magnifies this effect. Reducing the CC debt should reduce this effect, but alternatively you can use cash toward reducing a loan on the car, and both FICO and loan to value affect your loan terms.

One erroneous loan is affecting you positively. One is presumably affecting you negatively, due to lates.

If the above CCs, and loan, are your whole history other than the errors, and if they don't go back more than a few years, you might not have much difference removing both good and bad erroneous loans, compared to now, due to a thin credit history.

You want to at least get the bad erroneous loan off. Removing the good erroneous account, but failing to remove the bad one, would lower FICO.

You might see if you could run these few variations thru a FICO calculator, to see how much difference it makes. There are both positive and negative effects. A lender with experience in auto lending would also clarify where you stand.


Can you dispute the accounts? Sure. They might come off, or they might verify with the CRAs, based on the SSN on file, particularly if you had other accounts at that address.

They might fail to verify, in which case one or both accounts might be deleted. Since the accounts are paid and closed, they might not regularly update.

Are the erroneous accounts on all your reports? If not, disputing might result in them being posted to the other CRAs.

What type of lender were these two loans with?

How many inquiries do you have with each CRA in the last 6 months? What sort of CC offers are you getting?

 

Re: Re: Re: Parents borrowed under

From a human lender's perspective, I would imagine X months of payments on a lease, vs. X months of the same payments on a loan, would have similar effect on available cash flow per month for other uses. Both are legal commitments obligating the consumer to pay out the same cash flow stream.

A lease on a house I would consider equivalent to the same rent on a house. A lease on a car I would consider equivalent to that same payment stream on a loan, but at the end of the lease, you don't own it. But that's just my perspective.

I am not sure how the lease is considered by FICO. What is this lease for? How is it reported on your CR, since that is all FICO scoring has to go by?

How did your parents access a loan from Beneficial, applied for in your name?
Did they open it in your name, but get a check made out to them?
Did they get checks with your name on them to access the loan account?
Did they get a CC with your name to access it?
Did Beneficial make out a check to some other creditor of theirs, and it was sent directly there?

Also, how was this loan applied for? By filling out and mailing in an application, by applying at a loan office (presenting what id?), or by using an unsolicited loan check received in the mail?

A government issued, picture ID may be proof of identity, to the extent you can at least check the picture against the person standing in front of you, but providing numbers, even DL, SSN, or DOB, proves nothing a thousand people couldn't have faked.


Beneficial has been in the business for some time of sending out unsolicited loan checks (at outrageous terms, such as 29% APR) to people who have never been customers (based on CRA PRM inquiries), that if cashed or deposited, become the instrument documenting the loan agreement.

Supposedly, whoever you deposit this with "verifies" you are the party named on the loan check, and the banks doing this have argued that this is sufficient protection, and that if someone stole a check, the consumer is not legally obligated so no additional federal regulation is justified. See, for example, the Congressional hearings in 1997.

But this process really puts the unsolicited check lender in the intentional position of claiming up front that some party other than they are responsible and liable for a diverted check, whether it is the bank or other party accepting, or the consumer whose name was on it, never expected it, and never received it. At the same time, they claim the practice is not irresponsible since the consumer supposedly bears no legal risk.

Yea, right! As a consumer, I really enjoy encouraging meth addicts to pilfer my mail, and cleaning up the legal mess is free, since my time is worth nothing.

 

Re: Re: Re: Parents borrowed under

Quitollis, I enjoyed reading this thread, but I don't think your fundamental question was answered. So here goes... Dispute the bad loan as not mine. The creditor is really the only party that could go after your parents and they probably won't, given the fact that it is paid off. The law does not burden you with proving who's loan it is, but it places the burden on the creditor.

Lastly, your scores are probabaly as low due to lack of longer creditory and lack of having a better "blend" of types of accounts. Ideally, you probably need a few more open credit cards and a couple of "installment" loans. You can order your FICO scores from myfico.com and read the positive and negative factors most affecting your score. This will help you raise the scores, it's not always just making payments on time.

Good luck

 

Re: Re: Re: Parents borrowed under

The car lease may be reporting as an installment loan. That's why you need to get hard copies of each report and see what's there.

I say hard copies because the online trimerge reports don't show all of the information that the hard copies do.

The loans your parents had may also be installment loans, so that may be sufficient. If you don't have a store credit card you may want to get one. That's also good for the mix.

 

Re: Re: Re: Parents borrowed under

An installment loan is a loan in which you finance money or a loan on something for a set period of time (car loan for 36 months, personal loan for 12 months etc), generally from a bank. Unfortunately, your timeline to purchase the car doesn't give you the needed time to do this for score impact (6months to one year of the loan reporting).

 

Re: Re: Re: Parents borrowed under

Your future car loan will be an installment loan. Additional installment loans in the intervening period will more likely hurt you.

 

Re: Re: Re: Parents borrowed under

At this point, the CRA is not going to look beyond whether the lender says their information matches you. The CRA will never even see an application or signature, and if you didn't apply, why would you have a copy to compare signatures?

The lender may or may not verify. If they don't, it should come off. If they do, you might make use of your records (apartment rental agreement, etc.) showing you didn't live at that address when the loan was applied for. The CRA may also have your other legitimate creditors reporting your current address from that time period.

You will just have to see whether that works if you don't want to go the full distance with a fraud report.

Is there any possibility of clerical error, such as name similarities, that may provide a plausible justification for correcting the reporting to your parents file?