Credit Questions and Answers

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  • Frequently Asked Questions About Credit
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Credit Questions and Answers

Below are some frequently asked credit questions and answers that will help you make smarter decisions about your credit. If you have additional credit questions, feel free to Ask Bill.

What are the different types of credit?

Generally, credit is organized into three major buckets: Revolving credit: where a consumer borrows money from a lender and pays it back at the end or makes partial monthly payments (e.g., Visa and MasterCard). Charge credit: where the lender provides the consumer with a loan under the presumption that it is going to be paid in full at the end of the month (American Express). Installment credit: occurs when the consumer agrees to finance a debt with monthly payments over a predetermined period of time (e.g. mortgage).

How do you begin to establish credit?

Consumers desirous of establishing a good credit record should start off by applying for a credit card. The companies that monitor credit history compile information based on your payments and responsible consumers build up a good credit report by promptly paying off what they owe. A second consideration, especially if the consumer did not qualify for a conventional credit card, is to apply for secured credit. This method lessens the lender's risk by having access to some kind of guaranty from the borrower in case of default. An alternative way is to have a person with a proven history of good credit co-sign a loan. These co-signers are a form of guarantee diminishing the lender's risk of non-payment.

What happens if your request for credit is denied?

There are a variety of reasons dictating why credit may not have been extended. Reasons ranging from insufficient income, short-time at a job or address, and/or poor credit history. You should evaluate your situation and know that you are entitled to receive a credit report delineating your denial. You should also know that the credit bureau is obligated to investigate and correct whatever legitimate errors you find therein.

What type of bad credit loans can I get?

A short term loan (a.k.a. payday/cash advance loans) is one common type of bad credit loan that is available to you. This type of loan requires no credit check or co-signer. However, you do need collateral to qualify for a short term loan and a checking account for the funds to be transferred to.

Why do unsecured credit cards for bad credit have higher interest rates?

When creditors provide unsecured credit to those individuals with bad credit, the credit issuers face higher financial risks. So, to protect themselves, creditors set higher interest rates and fees for those with bad credit.

Why should I pay a company to repair my bad credit if everything is going to reappear after a few months?

If you use a reliable credit repair service, everything WON’T reappear after a few months -- if you have been the victim of identity theft, all of the wrong information should be removed. Most reputable bad credit repair services correct your entire credit file and stick with it until all issues are resolved and cleared. Your bad credit might have a long and deep trail, so it could take time to completely clear your credit file of all issues.

When do I need debt counseling?

There is no established debt amount or situation that dictates the need for credit counseling. Whenever you feel overwhelmed by debt, regardless of the amount, and need assistant with your credit debt, credit counseling can help you steer clear of huge financial troubles.

How do I know if a Credit Counseling Service is Legit?

When selecting a credit counseling service, make sure the credit counselor you will be working with is certified. Many credit counselors are required to have and maintain a Consumer Credit Counselor certification. The certification process involves specialized and comprehensive credit counseling training as well as the passage of the certification exam. Also, check with the Better Business Bureau.

How will Credit Counseling Affect my Credit Rating?

The existing condition of your credit report will influence how credit counseling will affect your credit; however, there is no hard and fast rule regarding credit counseling and your credit. Most creditors will report your usage of a credit counselor while other may not; and there’s no predicting how future creditors will interpret it. Many lenders perceive credit counseling as a consumer "work-out" program. Credit counseling will NOT impact your FICO score.

Is Credit Repair Illegal?

Credit repair is LEGAL. You may have heard some mention that credit repair is actually illegal; but the fact of the matter is there is nothing illegal about credit repair and disputing inaccurate information about your credit file. The Fair Credit Reporting Act (FCRA) actually encourages people to dispute inaccurate information.

What can be taken off my credit report?

Any inaccurate, unverifiable accounts such as inquiries, old addresses, additional names on the report (you must have at least one name on your report), unpaid collections, charge-offs, repossessions, bankruptcies, medical bills, credit card debt, and divorce debts.

What can't be taken off my credit report?

There are certain things that just can’t be removed from you’re your credit report. If accurate, those things are federal and state tax liens, child support, new student loans, and any bankruptcies reported by the bankruptcy court.

What is a Good Score?

The higher your credit score, the better; however, there is no real industry standard. Credit scores range from 350-850. Each creditor/lender judges your credit score differently and takes other factors into consideration when determining your eligibility and/or risk. Typically, anything above 690 is considered a great score. Below a 620 is frequently referred to as "sub-prime."

How often do Credit Scores Change?

Your credit score is fluid; it changes as your credit information changes. Anytime new information is added to your credit report, your credit score can change. The credit reporting agencies (TransUnion, Equifax, Experian) usually update their credit data every 90 days.

I have a Number of Credit Cards. Will that Affect my Credit Score?

Your overall credit history will determine how your credit is affected by having numerous credit cards. However, having an overabundance of credit cards with high balances or credit availability can negatively impact risk scores if your credit history is questionable.

How do I begin to establish credit?

Consumers desirous of establishing a good credit record should start off by applying for a credit card. The companies that monitor credit history compile information based on your payments and responsible consumers build up a good credit report by promptly paying off what they owe. A second consideration, especially if the consumer did not qualify for a conventional credit card, is to apply for secured credit. This method lessens the lender's risk by having access to some kind of guaranty from the borrower in case of default. An alternative way is to have a person with a proven history of good credit co-sign a loan. These co-signers are a form of guarantee diminishing the lender's risk of non-payment.

Is There a Rule of Thumb Regarding the Number of Credit Cards to Have?

In general, it is better to have a few credit cards with high credit limits than a large number of cards with limited credit limits. Having credit cards with high credit limits demonstrates that you are responsible enough to carry a high credit limit on multiple cards.

Is it a Good Idea to Transfer my High Credit Card Balance to a New Card with a Rock-bottom Rate?

If you want to transfer your credit card debt to a different card, you need to make sure that there are no catches with the introductory rate of the new card. For example, sometimes the low introductory interest rate on a card is only for a very limited time and then it skyrockets to an exuberant amount. You also need to ask if there are annual fees, late charges, or any other stipulations that might make transferring your credit card debt to a new card counter-productive.

So what is Credit Monitoring?

Credit monitoring is the automated process of keeping an eye on your credit. Credit monitoring helps protect you against identity theft and monitors any changes and/or inquiries made to your credit file by alerting you within approximately 24 hours of any major changes made to your credit file.

Will Credit Monitoring Hurt My Credit Score?

No. Credit monitoring has no affect on your credit score. It’s simply a service that keeps your credit in check. The only time it affects your credit is when you ask a creditor to inquire about your credit.

Does Credit Monitoring Monitor my Credit with all Three Bureaus?

The specific credit monitoring service you use will determine which credit bureau is referenced in monitoring your credit. Each credit monitoring service uses only one of the three bureaus to monitor your credit; however, since the activity you’re looking out for affects your credit across the board, it won’t matter which bureau your credit monitoring service uses. They’ll still be able to identify unexpected changes or discrepancies in your credit report.

How do I get a Hold of My Credit Report?

Three major credit bureaus offer credit reports:

Equifax Experian TransUnion
800-685-1111 888-397-3742 800-916-8800
Equifax.com Experian.com TransUnion.com
File a credit dispute online at Equifax File a credit dispute online at Experian File a credit dispute online at TransUnion

To get a hold of your credit report, contact one of these three credit reporting agencies or AnnualCreditReport.com. Each bureau interprets your credit information differently, so you might want to get a report from all three.

Can I get a Copy of My Credit Report at Any Time?

By law, you're entitled to one free credit report annually from the credit bureaus. This can be accessed at: AnnualCreditReport.com. You can also request a no-cost copy of your credit report if you were denied credit; however, you can only request a copy from the specific credit bureau that supplied the credit report to the creditor who denied you.

What Information do Credit Bureaus Collect about Me?

Credit bureaus collect your identification information, employment history, credit inquiries, and any additional public records and data.

Will Requesting a Credit Report Affect My Credit?

No. Requesting a credit report will NOT affect your credit. You have the right to look at your credit report without it affecting your credit or score. When you request your credit report it's called a "consumer pull" and has no affect on your credit. The only time when requesting a credit report can affect your credit is when you ask a possible creditor to inquire about your credit. This is because it implies that you're possibly opening a new line of credit.

Should I Consolidate my Credit Card Debt?

If you have multiple credit cards, each with their own increasing debt, credit card debt consolidation might be just the thing you need. Consolidating your credit debt will allow you to make just one payment to a consolidator, instead of numerous smaller payments to multiple credit card companies. Frequently, you can also obtain a lower monthly payment.

Can I Get Arrested for Not Paying my Debt?

As long as fraud and theft are not involved, you cannot be arrested and jailed for failing to pay your debt. However, creditors can pursue civil monetarily to reclaim the amount owed to them.

Do Joint Credit Cards Help Build Good Credit?

Joint credit cards can work both ways. Since the credit card account is placed on both holders' credit accounts, the activity on the card as a whole affects both parties equally. So, if the card is maintained properly, it can help improve credit. However, if one of the card holders abuses the card and ranks up thousands of dollars in debt, it can adversely affect the other holder's credit rating.

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65 Comments

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  • 35x35
    Oct, 2012
    Michael
    I applied for a credit card and was approved, but when I received it in the mail it was for a different card. I called and was told that because I wasn't approved for my original card, they found one that they thought best suited my needs and that doing this is standard. I did not ask for this other card, nor want it. I called and closed my account seconds after activating (apparently you can't do one with out the other). Will this effect my score, history or report at all? They also continued to tell me that I should just apply for another card (they did forget to mention that there is a 45 waiting period to do that). I'm just concerned that I had "jumped the gun" with closing my card right away. I don't want it to effect my history. Will it?
    1 Votes

    • 35x35
      Nov, 2012
      Bill
      Will opening and closing a credit card in rapid succession without using it impact a person's credit history? Yes, the opening and closing of the card will appear on the person's credit history, which a credit report contains.

      Will opening and closing a credit card in rapid succession without using it impact a person's credit score? No. However, applying for credit has a slight negative impact on a person's FICO score.
      0 Votes

  • 35x35
    Sep, 2012
    Mike
    I have a 50/50 ratio with debt vs. credit at the moment, with a credit score of 750 and 5 credit cards. If I were to close the highest card with $8500 limit but $6000 balance, would that affect my score what-so-ever considering the debt ratio is higher now due to low credit availability closing the account?
    0 Votes

    • 35x35
      Sep, 2012
      Bill
      Closing a credit card account does not alter your debt-to-income (DTI) ratio. Your closing the $6,000/$8,500 account will not alter your DTI at all.

      The only ways you can alter your DTI are to:
      • Pay the balances down
      • Increase your income
      • Discharge your debt in bankruptcy
      0 Votes

  • 35x35
    Apr, 2012
    Ali
    I had a credit card and also 2 different car loans that went unpaid. All 3 were paid off and closed to Financial 21 Credit Union. Each loan is on my credit report twice. Each under both Financial 21 AND California Coast Credit Union. One loan shows under Financial 21 as Current. but the same loan under California coast credit union shows current closed. The second loan shows financial 21 current closed but the same loan under California Credit union shows potentially Negative. The third loan shows under financial 21 as being current closed, but the same loan under California credit union shows potentially negative closed.I recently found out that Financial 21 no longer exists and that California Credit Union took over. How are they reporting to my credit report when I paid the loan off prior to the merge? Is this affecting my credit score having it listed on my credit report multiple times with different categories? Should I have something removed?
    0 Votes

    • 35x35
      Apr, 2012
      Bill
      Consider writing three separate Credit Report Dispute letters to the credit reporting agencies about the three Financial 21 accounts. Write one letter per month about one of the accounts, and send this letter to each of the three credit reporting agencies. Why one letter about one account per month? If you send too many disputes at once, the credit reporting agencies can consider your disputes frivolous, and reject them all. By spacing them out, you remove this potential objection.

      Why dispute the Financial 21 accounts? The institution no longer exists. It is unlikely the successor to Financial 21 will care about your disputes, and will probably ignore them. If this occurs, then the credit reporting agencies must remove the accounts from your credit report.

      If you can remove the Financial 21 accounts from your credit report, get another credit score. Is the new score higher than the old score? If so, then the old Financial 21 accounts were dragging you down. If not, then focus your attention on disputing the erroneous California Credit notations.
      0 Votes

    • 35x35
      Apr, 2012
      Allison
      Thank you, however my concern with Financial 21 vs California coast is that Financial 21 is all positive while California coast is negative. I don't even know how that is even possible.
      0 Votes

  • 35x35
    Feb, 2012
    Bruno
    Hello, I finished Consumer Proposal couple months ago. When I checked my credit file, it says: "Making regular payments under consolidation order". Why, when I already repaid it? Thank you, Bruno
    0 Votes

    • 35x35
      Feb, 2012
      Bill
      I am most familiar with the term "Consumer Proposal" as an alternative to bankruptcy in Canada. I can't give you much information, as Canadian credit reporting rules are not an area in which I have great knowledge. I did some quick research and it appears that once you complete your Consumer Proposal payments that there will be a notation on your credit report for a three year period.

      Whether the notation that shows on your report is proper, I can't say. I suggest you contact the provincial or federal authorities that regulate Consumer Proposals to get a clear answer.
      0 Votes

  • 35x35
    Nov, 2011
    Tracy
    I am getting divorced and everything was in my husbands name, so I have NO credit. I have just bought a car and have made one payment and my credit score has went from zero to 600 in a month. I am due to make a another payment next week, will this raise my score to 620? I need to be out of my current residence in into my own place by Dec 1 and I have to have a credit score of 620 or higher or nobody will rent to me.
    0 Votes

    • 35x35
      Nov, 2011
      Bill
      I am hesitant to say that your score will see a rise of another 20 points, due to one additional car payment.

      You can make the payment and wait to see what happens or make the payment and look into a rapid rescore, to find out if the score rose to the level you require to rent. The linked article discusses rapid rescoring in relation to mortgage shopping, but it can also apply in your case, if you need to know your score and prove it to others in a short time frame.

      If your score is not at the level you need (and even if it is), I recommend opening a secured credit card and working towards having at least three active tradelines in good standing showing on your report. Make sure the secured card reports to the three major credit bureaus.
      0 Votes

  • 35x35
    Oct, 2011
    Shawn
    I have a collection department calling me about an account that was charged off over 10 years ago. They say that they are going through peoples credit reports and trying to help them get it cleaned up. I don't see this on my credit report but I'm worried that they will reactivate it since it is still an unpaid credit card from 10 years ago. How should I approach this collection company called protocol?
    0 Votes

    • 35x35
      Oct, 2011
      Bill
      It is highly doubtful that a collection agency would comb through consumers' credit reports looking for ways to help them resolve old debt. Let us look at a few facts:
      • Charge-off / write-off. An accounting term that means a creditor has moved an account from its current-accounts book to its general ledger as a bad debt. It does not mean the account is canceled, forgiven, or extinguished. See the Bills.com resource Charge Off for a more complete discussion of this oft-misunderstood phrase.
      • Time. Seven years is how long most derogatory items can appear on a consumer's credit report file. The seven-year rule has nothing to do with charge off. It also has nothing to do with a state's statute of limitations. See the Bills.com resource Fair Credit Reporting Act to learn more about what can appear on a credit report and for how long.
      • Statute of Limitations. You did not mention statute of limitations, but this term often arises when people discuss old debt. Just because a statute of limitations has passed does not mean a creditor may not collect a debt, except in Wisconsin. The passing of a statute of limitations gives a defendant in a lawsuit an affirmative defense, and nothing more. See Statute of Limitations to learn more.

      A collection agent working on an ancient debt may contact a consumer to attempt to collect an ancient debt (except in Wisconsin). It can even file a lawsuit against the consumer. However, the consumer has an affirmative defense if there is such a lawsuit.

      The 7-year clock does not reset when the consumer makes a payment or settles the debt. There is no reason, from a credit score perspective, to pay a 10-year-old debt. If the creditor files an action — a lawsuit — against you, you may have an affirmative defense if your state's statute of limitations has passed.

      My advice? Send the collection agent a Cease Communication Notice.

      0 Votes

  • 35x35
    Oct, 2011
    dave
    My wife and I have had our car repo'd. We arent sure if we should attempt to get it back or let it go. How badly would her/our credit be damaged by this repo.
    0 Votes

  • 35x35
    Oct, 2011
    Michael
    I am an authorized card holder on an account in my mother's name. The card has a credit limit of nearly 20k. The balance is about 10k. I have made all of the payments, my mom has made none, but I send her the money and she puts it into her checking account and pays the card from that. She thinks the bank should know that I am making all of the payments, but I have a 3, almost 4, year old bankruptcy and I'm afraid they will rescind the card or drop the limit drastically, or even make the outstanding balance due immediately. I would like them to know if it would increase my credit score. I've never missed or been late on a payment and most always pay more than the minimum. My credit score is about a 645. Should I let the bank know that I am making all the payments or will it be a negative result?
    0 Votes

    • 35x35
      Oct, 2011
      Bill
      Using banking industry jargon, as an authorized user you are piggybacking on your mother's credit card. Being an authorized user on a current account with on-time payment history and low credit utilization will boost your credit score.

      The credit card issuer could not care less if you are contributing to the payments. You can send the credit card issuer payments from your own checking account and there will be no change in the account's status or in your credit score.
      0 Votes

  • 35x35
    Aug, 2011
    Austin
    I have 39 k of credit out with three companies. I have never been late on my payments, always on time. Recently, I have tried to refinance my truck, which i have paid on for two yrs with one credit union I'm trying to switch to another for a better deal. When I bought the truck, my score was 685,which isn't great, but not terrible . So, I'm shopping around and no one wants to take up the refinance, not even my credit union I'm with now. So, I check my credit report and it's 630. I see there is a outstanding report, so I call and pay off this problem. My question is after this reports, will my credit score go back up? And, after paying on my loans for so many yrs with no prob why should it be so low? Any ideas would help I'm lost when it comes to credit.
    0 Votes

    • 35x35
      Aug, 2011
      Bill
      It sounds like you are having a problem with credit utilization, which is an important part of your credit score. You are judged by the percentage of how much of your credit lines you use. It is generally advised to use 30% or less of your credit lines.

      I can't tell you how much your score will rise, because there are so many factors involved in making up your score, but try to pay down all the balances to 30% or less and see what that does to your score.
      0 Votes

  • 35x35
    Aug, 2011
    Vanna
    I owe $24,000 in student loans with monthly payments of $250 and around 4% interest. I have been late on at least 5 payments in the past, and gone into forbearance 3 times... so I know my credit score has been damaged. However, I recently inherited enough money to comfortably pay the entire $24,000 debt all at once, but should I do this? Or should I instead set up a bank account for the total amount (including interest) and set my loans to auto deduct for the next 10 years to rebuild my credit score? Would this even rebuild my credit score, and is it worth the extra money in interest to do this?
    0 Votes

    • 35x35
      Aug, 2011
      Bill
      What interest rates are you paying on the student loans? If the rate is low (<10% or so), and your goal is to rebuild your credit score, then I like your plan. However, instead of making minimum payments, double or triple the minimum payments to retire the loans relatively quickly, and provide a positive lift to your credit score. A lump-sum payment will not lift your score much, but a steady repayment history on this tradeline over three or four years will do wonders for your score.
      0 Votes

    • 35x35
      Aug, 2011
      Vanna
      Thank you for your answer =) My interest rate is around 4%. Will increasing my payments from $250 a month to $750 a month build credit faster? Or is that simply just to avoid accruing interest? If this is only an issue of interest, then would it not be more beneficial in regards to raising my credit rating to stretch my payments out over 8-10 years than 4-5?
      0 Votes

    • 35x35
      Aug, 2011
      Bill
      Your interest rate is very attractive. My suggestion to accelerate the payments was to reduce the interest expense. However, at 4%, the difference in cost between paying off the loan in three years verses six or eight years would be minimal in comparison to what some people pay for credit repair.
      0 Votes

  • 35x35
    Aug, 2011
    Suzy
    I'm going to settle a repossession charge on my credit. It was repossessed in June and the debt was sent to a collection agency and has offered me a discount to settle with them, which I'm willing to do. They are saying that once the debt is satisfied that the "repossession" on my credit will come off. Is this true? I thought it would stay on for 7 years no matter if I paid it or not.
    0 Votes

    • 35x35
      Aug, 2011
      Bill
      Include in your settlement negotiations a requirement that the creditor delete the derogatory entry on your credit report.
      0 Votes

    • 35x35
      Aug, 2011
      Suzy
      I tried to but they wouldn't budge. They said it will be reported as "Repossession/Never Late/Settled in Full"
      0 Votes

  • 35x35
    Jul, 2011
    harvey
    When will a notice of default or foreclosure show on credit report?
    0 Votes

    • 35x35
      Jul, 2011
      Bill
      Either notice will appear 30 to 90 days after the mortgage servicer reports the information to the consumer credit reporting agencies. When the servicer makes such a report is unknown, and according to its own policies.
      0 Votes

    • 35x35
      Aug, 2011
      Yuri
      Hello, I had a 5 year loan on a vehicle, which i paid off after 38 months. Approximately 17 months into my loan, I was 1-30 days late on one of my payments. The 37 other payments made were all made on time. My question is will my credit score still go up, even with that one late payment? It's been 60 days since the account has been paid off, it has shown up on my credit report as being paid off, but no credit boost? Thanks
      0 Votes

    • 35x35
      Aug, 2011
      Bill
      The effect on your credit score is in part dependent on the other kinds of accounts you have and their status. If you have a variety of other accounts in good standing, such as a mortgage, student loans, and credit cards, then your score should continue to improve, the further away you are from your one late payment. If your score does not improve, my guess is that it is related to the number and mix of the accounts you have.
      0 Votes

  • 35x35
    Jun, 2011
    Somayeh
    I have a debt from ten years ago. I have been making payments to a law office. I recently checked my credit report and the there is no indication that this debt exists anywhere. Should I continue to make payments or can I stop. I live in NH.
    0 Votes

    • 35x35
      Jun, 2011
      Bill
      Just because a debt does not show on your credit report, does not mean it is not a valid debt. If you stop paying a debt you know you owe, then you are at risk of being sued and having your wages garnished.
      0 Votes

  • 35x35
    Jun, 2011
    Ashly
    Does a negative report such as a collection account ever come off of your credit report? If so then how long before it is removed. I ran into so issues with credit cards when I was 18 and have since paid all of and have done well in rebuilding just wondering if those negative standings will ever go away.
    0 Votes

    • 35x35
      Jun, 2011
      Bill
      Federal law (US Code Title 15, §1681c) controls the behavior of credit reporting agencies. This law is known as the Fair Credit Reporting Act (FCRA). Under FCRA §605 (a) and (b), an account in collection will appear on a consumer’s credit report for 7.5 years. The clock starts approximately 180 days after the date of first delinquency on the account. To learn when an account will be removed by the credit reporting agencies (TransUnion, Equifax, and Experian and others), add 7.5 years to the date of first delinquency.
      0 Votes

  • 35x35
    Jun, 2011
    vick
    On your credit report it states when the thing will be deleted from the report. Does that mean you do not have to pay them when it drops off.
    0 Votes

    • 35x35
      Jun, 2011
      Bill
      Just because an account does not appear on your credit report does not mean that you have no obligation to pay. Old accounts drop off after 7 ½ years, but, in some states, the statute of limitations on the debt will run longer.
      0 Votes

    • 35x35
      Jun, 2011
      Linda
      After signing up with a Debt Management Company (DCM) 10 months ago, I am much deeper in debt now than when I started with this company. This is after paying them approximately $11,000. I was served a Summons from one of my creditors regarding a lawsuit with 30 days to respond. I called my DMC and they made a deal with the suing attorney to pay them $200/mo. I was advised by the DMC and the suing attorney not to answer the summons because a deal had been made. I just received an Request For Entry of Default from the attorney's office even though they have been receiving their payments on time. I called the attorney and was told they are going to put a lien on my house. Can they make an agreement for payment then sue me and put a lien on my house at the same time? Is it too late for me to do anything about this now? I didn't respond to the Summons because of the suing attorney's advice. Linda S. California
      0 Votes

    • 35x35
      Jun, 2011
      Bill
      An out-of-court settlement is just that — an agreement to avoid the trial. Consult with both a California lawyer who has litigation experience and your debt resolution company to learn if you have a cause of action against the plaintiff or the plaintiff's lawyer for breach of contract.
      0 Votes

  • 35x35
    Jun, 2011
    angel
    How is my credit affected when I submit multiple applications for housing?
    0 Votes

    • 35x35
      Jun, 2011
      Bill
      The act of applying for a loan causes a hard pull, which can decrease a credit score slightly. The algorithms that FICO, Vantage, and PLUS Score use supposedly ignore recent hard pulls in a rapid succession, counting many hard pulls as one. This is designed to not penalize a careful shopper contacting several lenders to find the best deal on a loan.
      0 Votes

  • 35x35
    Apr, 2011
    gustavo
    3 years a go i buy a car, after i go to mexico for 3 years and left the car in a shop in tijuana after 6 months the shop disapear and take the car now wath i can do to fix this, and the shipper via to do
    0 Votes

    • 35x35
      Apr, 2011
      Bill
      Consult with a lawyer in Mexico who has experience in consumer law.
      0 Votes

    • 35x35
      May, 2011
      AndrewP
      It is always important to have good credit score.
      0 Votes

  • 35x35
    Apr, 2011
    Brandon
    Everybody wants to report bad credit information. If i were paying on something for a few months, but the company doesn't report to the credit companies, is it a way that i can submit payment history directly to the equifax,transunion or experian myself? for consideration.
    0 Votes

    • 35x35
      Apr, 2011
      Bill
      You can add a comment to your credit report, but consumers are not permitted to report transactions to the credit history portion of a report. See the Web sites for the consumer credit reporting agencies for details on adding a comment to a credit report.
      0 Votes

  • 35x35
    Mar, 2011
    Anna
    Is it true that your credit score will be affected by how much credit you are using? For example, if I have a credit card with a $300 limit, is it bad to have about $250 of that being used? Should I always try to keep it below a certain percent? or does it not matter as long as I pay it every month?
    0 Votes

    • 35x35
      Mar, 2011
      Bill
      You are referencing what is called 'credit utilization,' which measures the percentage of your credit line that you are using. Utilization is measured at the close date (typically monthly) of your billing cycle and is then reported to the credit bureaus.

      While there is no hard science to back this up, it is generally recommended that you keep your running balance below 30% of your credit limit. In your case, if the limit is $300, you should keep the running balance below $90. Paying the bill in full each month is ideal. If you have to carry a running balance, another way of avoiding harming your credit score due to improper credit utilization is to request that your credit limit be increased. That way, any running balance will use a smaller percentage of your credit line. If you have a maxed out card, this will certainly hurt you.
      0 Votes

  • 35x35
    Feb, 2011
    Chrystal
    My gal pal has VERY bad credit and needs to buy a car. She has two choices: (a) pay it all off in cash now or (b) finance 2K over one year. She wonders if plan (b) would help improve her credit rating. If so, it may make sense to pay the interest, but if it won't help her credit, it would be cheaper to pay it all now. Any advice on which path is best for her to take? Thank you!
    0 Votes

    • 35x35
      Feb, 2011
      Bill
      A lot depends on how fast she wants to boost her credit score. Is she planning some other major purchase, aside from the car, that requires good credit? If she wants to raise her score as fast as possible, I believe that having a car payment in good standing appear on her report will be very helpful. Still, it may not be the best choice?

      How much interest would she pay over the course of the year on the $2,000? Even if the loan were at a VERY high rate of 20%, that would total only about $240 in interest, which is not a lot of money. If she were financing $20,000, the interest costs of the loan could wipe out any improvement to her score from making the payment. It is very important for her to determine that the finance company will be reporting the monthly payment to the credit bureaus. A lender is not required to report the information to the credit bureaus. If they do not report, then she clearly will not receive any boost in her credit score.

      Lastly, I recommend that your friend read about how to improve her credit score.
      0 Votes

  • 35x35
    Feb, 2011
    Brandon
    When there are things on your credit report that shouldn't be there. In my case multipule things. Who and how would I go fixing them as soon as possible? Also can things such as workmans comp. be held against my credit? Thanks for reading.
    0 Votes

    • 35x35
      Feb, 2011
      Bill
      I have a reading assignment for you: Please see the Bills.com resource Fix My Credit Report to learn what steps you need to take to remove the erroneous information on your report. One thought: If the information in question is your address, and there are accounts on your report you do not recognize, you may be a victim of identity theft.
      0 Votes

  • 35x35
    Jan, 2011
    Ryan
    I have several accounts on my credit reports that were reported as paid but for less than the amount owed. They are classified as negative accounts. Would contacting these companies and paying the additional amount owed significantly improve my credit?
    0 Votes

    • 35x35
      Jan, 2011
      Bill
      At this point, I assume that the debts show as a $0 balance. If that is the case, then you no longer owe anything and sending money to the creditors would not do anything to improve your credit score. As each month passes, the negative accounts gets less weight in determining your current credit score. I suggest that you focus on building your credit score by making sure that you have a number of active trade lines that report in good standing each month. Aim for a mixture of account types (car payments, loans, credit cards, store cards, etc.), as that will help your score rise more rapidly.
      0 Votes

    • 35x35
      Feb, 2011
      Debbie
      I was offered a settlement by my credit card company for 85% of debt how will this affect my credit?
      0 Votes

    • 35x35
      Feb, 2011
      Bill
      How your credit will be affected depends on your credit profile. Your credit score is based on the kinds of accounts that show on your report, whether you have paid your bills as you agreed to pay them, how much debt you are carrying compared to the size of the credit lines you have been granted, how long your accounts have been open, among other factors. Without knowing a lot more about your specific situation, I can't comment accurately on exactly how your credit will be affected.

      In order for you to have received a settlement offer from your creditor, I am confident that you had to have been severely delinquent on your account. Creditors will generally not negotiate a settlement with a customer who is making his or her payments, usually not entertaining a settlement offer until the account has gone into charge off status. My guess is that your credit took a huge hit from the delinquencies that preceded the settlement offer.

      Once the debt settlement is paid, your credit report will now show that your account is at $0 balance. There will be a notation on the report that your account was 'settled,' 'resolved,' or some other language that indicates that you did not pay the debt in full. Once your debt is at $0 balance, your score will start to improve.

      As an aside, make sure to get the settlement offer in writing, so you can prove that your settlement payment ends all claims the creditor has for the debt.
      0 Votes

  • 35x35
    Jan, 2011
    Randy
    I am about to get married to someone who filed for bankrupcty five years ago. My credit is around 740. Once we get married, will my credit score go down because of her? If she keeps her name and I keep my name will we continue to have separate scores? How can I not ruin my score once were married?
    0 Votes

    • 35x35
      Jan, 2011
      Bill
      There is no such thing as a marital credit score. You keep your score, and your spouse keeps his or her score. One spouse could have an astronomical score, and the other may have a low score and the two may never converge if their financial behavior stays consistent.

      In the situation you described, I advise the following:
      • Do not open joint bank/credit union accounts.
      • Do not apply for a joint credit card.
      • Avoid a joint mortgage if you qualify alone.

      Doing the above will maintain your separate identities and make it easier for you to obtain credit while your spouse rebuilds his or her credit score.

      0 Votes

    • 35x35
      Jan, 2011
      Randy
      Thanks for your reply. One last questions. I was under the impression when you are married and are buying something, for example a vehicle, that both names have to be on it if your married. Can you buy things apart? Thanks, Randy
      0 Votes

    • 35x35
      Jan, 2011
      Bill
      You can buy things on your own, after you are married. You are not required to buy goods in both parties' names, whether you pay cash for them or finance the purchases. How ownership of any property that is acquired and held separately during a marriage is viewed, if a marriage dissolves, depends on whether or not the state in question is a community property state.
      0 Votes

  • 35x35
    Jan, 2011
    kathy
    Once a credit card has been charged of and another company buys it does it have to be paid back?
    0 Votes

    • 35x35
      Jan, 2011
      Bill
      It depends.

      Although this may seem counter-intuitive, a delinquent debt is an asset that is called a collection account. Collection accounts can be bought, sold, traded, or gifted from original creditors, such as a credit card issuer, to collection agents. Collection agents buy the right to collect the debt. Collection agents can also buy, sell, trade, or gift collection accounts. As a collection account ages, its market value decreases. Collection accounts sell for pennies on the dollar. A collection account may be fully documented or bare. It is a good idea to validate a debt before paying a collection agent a dime. If the collection agent owns a bare account and the consumer asks for a debt validation, the collection agent may not collect the debt or report it to the collection agencies.

      As you can see, the answer to your question depends on if the collection agent has documentation to prove the existence of the debt.
      0 Votes

  • 35x35
    Jan, 2011
    judy
    If I am only on the deed to our house and NOT on the mortgage can my credit be hurt if we stop paying the mortgage ? Also since I think only my spouse's credit score will be ruined and I'm only an added name on my spouse's credit cards, can my spouse just take my name off the accounts to prevent harm to my score?
    0 Votes

    • 35x35
      Jan, 2011
      Bill
      If your spouse's credit score is about to be damaged severely, ask him or her to remove your name as an authorized user from all of his or her accounts. Regarding your name being on the deed only, that will have no impact on your credit score if your spouse fails to pay the mortgage or defaults on other debts.
      0 Votes

  • 35x35
    Dec, 2010
    Alan
    Can breaking an apartment lease negatively impact your credit score? Even if you are not having money problems, you just want break it early.
    0 Votes

    • 35x35
      Jan, 2011
      Bill
      No and yes. You may have heard of the big consumer reporting agencies -- Equifax, Experian, and TransUnion. Those do not report residential leases, generally speaking. However, there are consumer credit reporting agencies that focus on leases. If your landlord reports broken or completed lease contracts to the lease credit reporting agencies, then your breaking the lease will follow you. However, if your landlord is a mom-and-pop operation who has no relationship with the credit reporting agencies, no one will ever hear of your broken lease.
      0 Votes