During college, my credit record was damaged through late payments to creditors. What I'm looking for is advice on how to speed up the credit repair process. I'm now married, and my wife and I make enough to pay bills and save without too much difficulty. But my previous credit problem is hindering our ability to do such things as buy a car or house. Can your service help me? Andrew
Dear Andrew:
There is no way to speed up the credit repair process. The federal "Fair Credit Reporting Act" permits a creditor to report derogatory information for up to 7 years. There is absolutely nothing you, or CCCS, can do to compel a creditor to remove derogatory information before 7 years has gone by. You will just have to wait until 7 years has gone by before your credit will be restored. That's the law. Sorry.
Dear Susan & Co.,
I graduated from college in 1996 and I ran credit reports to see where we stood. My credit report showed four cards with over 10,000.00 worth of charges and many delinquencies. With some investigation I found that my mother had taken out cards in my name and not told me and maxed all four of them out. When I confronted her she said she did it and that she was working to get them paid off. It has been three years since I found out and a recent report has shown more delinquencies and very little balance reduction. My question is, is there anyway to take care of this problem and correct my bad credit without having to have my mother charged with credit card fraud and put in jail? WB
Dear WB:
For answers to your questions, you need to contact the fraud victim department at each of the credit reporting agencies. Please contact:
Trans Union
Fraud Victim Assistance Department
P. O. Box 6790
Fullerton, CA 92834
(800) 680-7289
Equifax
P. O. Box 740241
Atlanta, GA 30374-0241
(800) 525-6285
Experian
P. O. Box 1017
Allen, TX 75013
(800) 301-7195
Dear Susan & Co.,
I graduated college with 15 credit card bills. While in college I was excellent at paying bills on time, however after I graduated I had the money but due to disorganization and illness I had trouble paying bills on time. It is two years later and I have paid them off and I am down to 5 credit card bills. I no longer use my cards and I have a steady job (teacher). I need information on improving my credit rating to improve on late pays. Thank you. Melissa
Dear Melissa:
As far as 'the credit system' goes, there are degrees of delinquency. The stage of delinquency determines the length of time a derogatory notation will remain on a consumer's credit bureau file. For credit reporting purposes, the basic stages of delinquency are: 1) 30-59 days past due, 2) 60-89 days past due, 3) 90-119 days past due, 4) 120 or more days past due and 5) charged off to bad debt.
Once a debt is charged off to bad debt, this derogatory notation will remain for up to 7 years from the beginning of the delinquency that lead to the charge off. A delinquent account that has not been charged off, and is then brought current, will most likely not have a blemish noted for 7 years. That blemish might be removed in about 2 years after the account is brought current.
If your paid out credit cards were paid off while they were in a delinquent state, it will be noted on your credit bureau file that your account was paid out unsatisfactorily. This blemish will remain for 7 years from the date the account was paid in full. At this point, there is nothing you can do to have this derogatory notation removed before 7 years have elapsed.
If your current open accounts were/are delinquent but have not been charged off, continue to pay at least the minimum payment each month until you are current again. Depending on how far past due you were/are and how soon you bring your account current will determine how soon before the derogatory notation will be permanently removed from your credit bureau file and you have perfect credit again. There is no secret or magic formula to accomplish this goal. The basic criteria is make regular full payments and pay on time.
Dear Susan & Co.,
Is it true that bad credit is automatically erased from your credit report every 7 years? Kevin
Dear Kevin:
The federal "Fair Credit Reporting Act" states the length of time derogatory information remains on a consumer's credit bureau file is:
Dear Susan & Co.,
I came across an ad in the Yellow Pages of a place that offered to "fix your credit or your money back!" Now, I know, that generally there is no way to "fix your credit report," but how they said they did it was curious. They said that they send notices to the CRA's that the entry is incorrect, and banking on the fact that some creditors purge their records after two years that the creditors will no longer be able to prove the entry on the report, therefore it is removed. Is this a scam? Or, would it work if your creditor does in fact purge their records? Maceo
Dear Maceo:
Yes, this is a scam. All creditors and credit reporting agencies are aware of this tactic and are on the lookout to prevent their scam from working. Creditors DO NOT purge their records after two years. Creditors generally don't purge their records until seven years has passed because that is how long they can keep derogatory information on a person's credit bureau file.
If this company is asking you for an upfront fee, they are breaking the law. A Federal Trade Commission ruling that took effect December 31, 1995, bars companies from asking for money upfront to help people fix their credit records. These clinics can legally charge you for this effort but only if you do not pay the fee until after the service is rendered. The FTC recently issued enforcement action against several firms for making promises that were never kept. The bottom line is, the only legal way you can have derogatory information removed from your credit file is by waiting seven years.
Dear Susan & Co.,
I read your replies and found usually the bad reports stay for 7 years but from what date: the date of delinquency, date of the company reported the delinquency, the date I paid them back the amount?
One of the credit reporting agency has a wrong report against me. I have a collection account at 1994 but they are making it 1997 so it will remain longer in my file. I tried hard to change it. I sent a letter to the creditor but nothing is happening. Can I sue them and if I can, please let me know somebody who can help me. I shall appreciate your help. Best regards, Mou
Dear Mou:
The federal Fair Credit Reporting Act (FCRA) outlines the length of time information can remain on file in two ways. Prior to January 1, 1998 the 7 years start from the date of last activity on the account. On charged off accounts, this date of last activity is generally the date the account was charged off. After January 1, 1998 on accounts charge off or placed for collection, the 7 years begins from the date of delinquency that lead to the charge off or placement for collection.
The FCRA does permit a consumer to seek damages in state or federal court for willful or negligent noncompliance of the FCRA. You will need to seek the service of a private attorney for further advice and assistance on filing suit under the FCRA.
Dear Susan & Co.,
Who must I contact to receive a copy of my credit report(s)? I am not having any problem, that I know of, but would still like to see what they say about my credit. Thanks, JPV
Dear JPV:
There are three primary credit reporting agencies. Their names and phone numbers are: Experian at 800-643-3334, Equifax at 800-685-1111 and Trans Union at 800-916-8800. When you call, you will get a recorded message on what you need to do to get a copy of your report. A nominal fee is charged but free if you have been denied credit in the last 60 days. Whether you should get a copy from only one or all three of the agencies is a personal decision. Most major creditors report to all three of the agencies but there is no assurance this is the case. One report might have information the others do not. You won't know if this is the case unless you get copies of all three.
In 1993, while in the process of a divorce my bank holding my mortgage filed for foreclosure. This debt was satisfied prior to any additional action. I supplied documentation to the credit agency and requested that this be removed from my credit report. I was sent two updated credit reports 1) deleting the entry and 2) reinstating it.
How do I have this removed? Kathy
Dear Kathy:
If the mortgage company foreclosed or even if they didn't but you were delinquent on your mortgage, this negative report can remain on your credit bureau file for up to 7 years from the date of last activity on the account. There is nothing you can legally do to have this blemish removed prior to that time. Sorry.
The reason you probably received two reports from the credit reporting agency (CRA) is;
Report #1 - The entry was deleted because you disputed the item. The CRA is required by law to remove an account that is in dispute until the dispute is resolved. The CRA then contacts the creditor of the disputed item to have them research their file to see if your dispute is justified. If the creditor agrees your dispute is justified, the item is permanently removed from your file. If the creditor reports back to the CRA that, according to their records, the info they are reporting is accurate, the notation is re-entered on your file.
Report #2 - The CRA is required by law to advise you of the result of their investigation of your dispute. They sent you a new report showing the creditor reported back that the info they originally reported is accurate and the entry should remain on your file.
Dear Susan & Co.,
A few months ago, while applying for credit with the bank, I saw a copy of my credit report. There was a comment on the report that disturbed me. It said "Serious Delinquencies". My question is this:
What does the credit bureau base this comment on? Is it just someone's opinion or is there an actual formula or score that supports such a comment being placed in one's credit report? Thanks. Lorri
Dear Lorri:
There is no set formula to define "Serious Delinquencies". Each creditor has their own interpretation of what a seriously delinquent account is. Some creditors, such as banks and mortgage companies, don't like to see any delinquent accounts on your credit report. Other creditors, such as finance companies and department stores, will overlook minor past due accounts.
Most creditors will consider you seriously delinquent if you are 3 months (90 days) or more past due on an account. Certainly if you are 6 months (180 days) or more past due, every creditor will consider you seriously delinquent.
Dear Susan & Co.,
My personal credit, as well as my wife's, has several adverse reports due to not receiving bills, bank statements, checks, etc. through the mail. Our credit reports show slow credit from past actions and this has caused us to not be able to take advantage of lower home mortgage rates.
Q.1. Can we do anything to remove these adverse reports? The payments were late, and I acknowledge that completely.
Q.2. However, do situations that are "outside your control" where documentation is available, have remedies other than just having your comments added to the file?
Q.3. Do these personal notes really make an impact on those granting credit?
Thank you from South Carolina. Warren and Pamela
Dear Warren and Pamela:
In response to your questions:
Q.1. There is nothing you can legally do to get these derogatory notations removed from your credit bureau file. By law, these notations can remain for up to 7 years from the date of the delinquency.
Q.2. Even though you can prove situations beyond your control caused your delinquency, this will not stop a creditor from reporting these accounts as past due. Creditors have never been known to be compassionate and understanding. All a creditor wants to know is if you made your payments on time. They are not interested in any reason why you didn't pay. If you don't pay according to the terms of the contract you signed, you will be reported as paying slow.
Q.3. Today, most credit decisions are made by a "credit scoring" system. This is a statistical method lenders use to assess how good a credit risk you are. The creditor gathers part of their statistics from what your creditors are reporting to the credit reporting agencies (cra's) on your charging and paying habits. The "credit scoring" system has no place to give point value to any statement you might have submitted to the cra's outlining your side of the story. Therefore, in most cases, your statement has no bearing on the decision to grant or deny your application for credit.
This is the way "the credit system" works today and the average citizen has no power to change the system. They must conform and adjust or face a life of frustration.
Dear Susan & Co.,
Hello, I recently paid off some outstanding debits I had on my credit report 2 for about 350 dollars each.....
I paid this about 2 months ago now I am trying to buy a car and they are still there.. also a debit I paid off about 1 year ago is still on my credit record but it shows up as paid but the Collection Agency promised me If I paid the entire sum at once they would totally clear it off my record..... One more thing Is there anyway possible for me to try and get some "good" credit I can't even seem to get a Gas Card at Chevron.... I make good money and have now problem paying my bills (now) but I have paid for every thing in cash- my car, furniture, etc..... Well that is my little situation I would greatly appreciate any advice or help you could give me!! Sincerely. David M
Dear David:
Unless you have something in writing from the Collection Agency stating they would totally clear off any derogatory notation from your credit bureau file, you have no hope in getting these notations removed. These notations will remain for up to seven years from the date of last activity on your account. This last activity date is the date your creditors considered your accounts delinquent and uncollectible.
Now you will need to start re-establishing your credit. You can do that in the following manner: (1) Apply for a secured credit card. Some banks offer major credit cards using a savings account as collateral. (2) Apply for a secured loan. Establish a savings account at your bank and use your savings account as collateral for the loan. (3) Provide a large down payment when trying to finance a house, car or furniture. Creditors will be more likely to grant your loan request if you make a substantial down payment.
Dear Susan & Co.,
I have been reading some of the questions and answers posted under Dear Susan and Company regarding credit reports and would like to know what is a charge off? Thanks. Trina
Dear Trina:
A charge off is an accounting term to indicate a creditor has lost money on a credit account with a consumer. When a creditor extends credit to somebody and that person makes their payments on time, everything is fine and the creditor makes a profit. But when that person stops making their payments, instead of the creditor making a profit, the creditor will end up losing money.
On the creditor's accounting system, they must show they have lost money on this non-paying account. They will 'charge off' the account as uncollectible and show it as a 'bad debt' on their books. The creditor then reports this non-paying account as a 'charge off' or 'bad debt' account to the credit reporting agencies. This negative notation will remain on the consumer's credit bureau file for up to 7 years.
Dear Susan & Co.,
I have a number of old accounts that went to collection and have been paid in full for years now (at least 3 years). Unfortunately, the adverse credit rating is there. Since these accounts are so old, what are my chances of writing to the creditors and asking if they can unrate my account? I know that under the FCRA, the adverse information can stay there for up to seven years. Is it unlawful for me to ask the creditor to do this? Thanks. Dawn R
Dear Dawn:
No, it isn't unlawful to ask a creditor to remove a derogatory notation from your file. It will be non-productive though. I have never known a creditor to remove a derogatory report for a consumer who has made this request.
You will have to be resigned to the fact your derogatory notations will remain on you file for 7 years from the date of last activity on the account. Nothing can or will be done to shorten this time frame. Sorry.
Dear Susan & Co.,
I have relatively good credit, but I'm fairly young and I believe my credit history isn't well established. I'd like to build good credit.
I've had a credit card for a few years, and I pay the balance off in full almost every month. Rumor has it that paying the balance every month is somehow bad for my credit rating. Is this true? Thanks. Cam
Dear Cam:
The rumor you probably heard is in order to build a good credit file, you need to make regular monthly payments on an account. This is an accurate statement but just because you don't make payments and instead pay your balance in full doesn't mean you are establishing a negative report. You are still making regular monthly payments on your account. The only difference is you are paying your balance in full every month. This is what everybody should do.
Continue to do what you are doing. I assure you, your credit report will reflect an excellent rating.
Dear Susan & Co.,
I noticed on my credit report that there are still some old charge offs. The last activity date was about eight years ago. Aren't these supposed to be deleted from my report? If they are, how do I go about getting them removed? Thanks. Andrea
Dear Andrea:
You will need to contact the credit reporting agency direct, advising them your file contains items in your file that you feel are over seven years old and should be removed from your file. Mention the specific items you are referring to. The credit reporting agency must investigate your concern and give you a written report of their investigation.
The complete name and address of the credit reporting agency should be on your credit report. When writing to the agency, be sure to give them your complete name, address, date of birth and social security number so they are able to identify your file.
Dear Susan & Co.,
I currently have a student loan in default, another bill in collections, and another bill that has been settled but not removed from my credit record. Provided I pay off these debts how can I be assure they will be removed from my record? - Jordan
Dear Jordan:
Just because you payoff a past due bill doesn't mean the account will automatically be removed from your credit bureau file. In fact, it won't. Depending on the extent of the delinquency and date the account became delinquent, these account can stay on your file for up to seven years from the date you pay off the account.
Dear Susan & Co.,
Is it legal to start a new credit file with a new social security number? If so, can a car be financed under a new credit file? I keep seeing all these companies on how to start a new credit file, I just don't believe it! If you could answer my questions I will be forever in grateful. Confused. Sloan
Dear Sloan:
It is absolutely against the law to try to establish a new identity and credit bureau file by using any I.D. number other than your original Social Security number.
The Federal Trade Commission is announcing a crackdown on scam artists that encourage people to set up new identities by applying for a new taxpayer number. If a consumer attempts to use a false I.D. number to apply for credit, they may be committing a felony and could be subject to prosecution and going to prison.
In regards to a repossession being listed on your credit bureau file, as far as I know, credit reporting agencies use only a consumer's social security for I.D. purposes.
Dear Susan & Co.,
I recently discovered that a $165.00 old phone bill was reported as delinquent payment while I was in college. I had worked out an agreement with that company back in 1995 but it now appears on my TRW Credit report. I'm sure I can straighten the matter out with the phone company BUT HOW DO I GET IT OFF MY TRW REPORT????? Please reply.... Thanks. Nikki
Dear Nikki:
The only way this item will be removed from your credit bureau file is through time. Specifically, the federal Fair Credit Reporting Act states the longest a derogatory item can remain in a consumer's credit bureau file is 7 years from the date of last activity on the account.. In your case, even if you pay the balance in full, this delinquent phone bill will remain in your file for approximately 3 more years. There is nothing you, or anyone else, can do to have this item removed any sooner. Sorry.
Dear Susan & Co.,
I have three negative items on my credit report. One was "charged off as bad debt" ($214), but it is seven years old (closed 2/92.) Can I get this removed from my credit report??
The second was a "paid collection" which was "closed" in 6/92. It will be seven years old in June. Can I request that this be removed since the seven years is almost up?
The third was an automobile loan which was 3 times 30 days late, and was "closed" as of 9/92. Can I have this removed from my credit report, even though the seven years will not be up until September? Thank you. Joan
Dear Joan:
The credit reporting agencies should automatically remove any item that is over 7 years old. There should not be any need for action to be taken on your part. But don't expect any item to be removed prior to 7 years. That means your paid collection closed in 6/92 and auto loan that was closed in 9/92 will not be removed prior to the seven year time frame. Don't even waste your time asking that they remove them before the 7 years.
What you need to do is wait until 10/99 and then get a copy of your credit bureau file. All three of these entries should be gone by then. If not, you can then write to the credit reporting agencies demanding that they remove these entries.
Dear Susan & Co.,
I just recently paid off my defaulted Illinois Student Loan. My credit report indicates a $0 balance for ISAC, but my status shows an I5. Why is this? Should it be changed to an I1? What rights do I have after paying off a debt in full? Lenny
Dear Lenny:
An I5 entry indicates you were 120 or more days delinquent on your account at the time you paid off the balance. Unless your account was current and not 120 or more days delinquent at time of payoff, there is no way you can have this I5 notation removed and an I1 put in its place. This unsatisfactory mark can remain on your file for up to 7 years from the date you paid your balance in full. I'm also sorry to report there is nothing further you can do about this matter.
Dear Susan & Co.,
A creditor claims that I owe $3800 but they cannot provide any information as to what credit card these charges belong to. One collection agent said it was a gas card, another said a visa card. I requested a copy of the original application and they sent me a blank piece of paper claiming that was my application. I then acquired copies of my credit report from all three agencies and there is no listing of $3800 to any creditor on there. How can I get this cleared up?? I am sending a cease and dismiss letter to stop the phone calls, but I don't want my credit damaged because of something I feel is fraudulent?? Please help!! Sincerely. Ginger
Dear Ginger:
At this point I wouldn't be overly concerned about this collection agency ruining your credit rating. You state you obtained copies of your credit report from the three main credit reporting agencies (CRAs) and this $3800 debt does not show up. The chance of this debt now appearing on your credit report are very slim.
To be on the safe side, in approximately six months, get copies of your credit report again. If by some chance this debt does show up, follow the instructions the CRAs supply whenever you wish to contest an item that is showing on your report. Good luck.
Dear Susan & Co.,
I have a lot of credit inquiries on my credit report is there anyway I can take them of my credit history and how long they stay on my credit report Thank you in advance. Daniel
Dear Daniel:
There is no way you can have credit inquiries automatically removed from your credit bureau file. Inquiries can remain on your file for up to 2 years after which they will automatically be removed from your file.
Dear Susan & Co.,
How do I remove information off my credit report? I was late making some payments but I paid them off, It states that the cards where charged off instead of paid off. Fatimah
Dear Fatimah:
If a creditor is reporting information accurately, there is no way you can legally have this information removed from your file. The creditor will continue to report this as a charged off account even though you have paid the balance in full. They will have a notation stating something like, "Paid Charge Off". This derogatory notation will remain on your file for up to seven years from date of charge off.
Don't fall for any of these ads from what we call "Credit Doctors" that state they can clear up any bad credit that is being reported. This is a scam. They cannot do what they say they will do. You will just be throwing your hard earned money away if you fall for their line.
Dear Susan & Co.,
I just filled out an application online, but my main concern is not to consolidate my current debt, because I do not have much now. Rather, I am concerned with my credit report. I had bad problems about 5 years ago, but paid everything off. Now when I try to get credit, I am refused. I would like to know if there is anything else I can do to make my report look better. Also, my report shows a account in collections, which I paid off about 3 years ago...how do I get this removed from my report, and why wasn't it already? Any help you can offer me would be greatly appreciated...Thank you :) Amy
Dear Amy:
The credit reporting agencies (CRA) are regulated by a Federal law known as the Fair Credit Reporting Act (FCRA). This act states the length of time derogatory information remains on file is 7 years from date of last activity except delinquent accounts effective 1-1-98 can remain on file for 7 1/2 years after payment should have been made. In your case you are still within this time frame. There is nothing you can do to have these accounts removed from your file prior to these time frames. Sorry.
Dear Susan & Co.,
My husband and I are trying to get a mortgage, when we got our credit report we were shocked, there is a car loan that we took to court and it was agreed they would get the car back, so why is it on our credit, it was an even exchange. Also, what if you have moved and never forwarded a bill. We cannot get the mortgage because we are rated a C. Please give me advise as to what to do? Colleen
Dear Colleen:
What I am about to say is not what you want to hear but I must be honest and candid with my response to your concerns. I'm sure a truthful response is what you want and expect.
It appears you have fallen victim into doing something without knowing what the repercussions would be. You state you went to court and "they would get the car back". Without knowing anything further about the transaction, whenever someone says, "they will get the car back", that says instantly to me, "they will repossess the vehicle". Get back and repossess mean the same thing. The creditor is now apparently reporting you with a repossession and there is nothing you can do to have this notation removed from your credit bureau file except wait 7 years from the date of last activity with the repossession.
In regard to a creditor not forwarding a bill on to you after you have moved. A creditor has no way of knowing you moved so they can forward a bill unless you tell them you have moved and you give the creditor your new address. The creditor has no further legal obligation to notify you of a balance due on an account.
By your actions, or lack of action, you apparently have compromised your credit and now it is too late to do anything to reverse what has been done. Your only recourse is time, specifically 7 years from the date of last activity. These derogatory notations will not be remove from your credit bureau file until that time.
Dear Susan & Co.,
I have been paying a very large balance from several credit cards through CCCS for two years now with two years of payments remaining. Since the payments require a substantial portion of my income, I am now considering whether continuing payment is in my best interest. My credit report will not improve until seven years after last activity, which in this case is 9 years from now. If I discontinue payments now and let the accounts chargeoff, the seven year period will start now. I do have judgments against me, but I do not own anything to attach. Does continuing to repay the debt help me substantially to improve my credit rating or has permanent damage occurred already? Anthony
Dear Anthony:
Just how bad is your credit rating today? When you get on CCCS Debt Management Program (DMP), some creditors agree to reestablish your credit with them instantly. Has this happened in your case? The only way you can tell is by getting a copy of your credit bureau file to see exactly what is being reported today by all of your creditors.
To get a copy of your credit bureau report, contact one of the three main reporting agencies. They are: Experian at 1-800-682-7654, Equifax at 1-800-685-1111, Trans Union at 1-800-888-4213. Once you have your most current credit bureau file, you can see exactly where you stand credit wise. If you have questions about your report, call CCCS and schedule an appointment to speak with your counselor. Bring your credit bureau report to your session to show your counselor. Your counselor can then answer any question you might have. If there still are derogatory notations on your file, your counselor can advise you as to how long they will remain there. You can then determine what course of action you should take. Good luck.
Dear Susan & Co.,
Is there anybody to talk to to help understand your credit report. I filed bankruptcy in '92 and some of the accounts are not listed under it. They are still open accounts and are listed under Coll/P&L. Should I have them changed or not. Will changing them help in any way. Kathy
Dear Kathy:
Yes, there is somebody you can talk to about your credit bureau report. That would be a CCCS financial counselor. Your counselor can then advise you on the provisions of the "Fair Credit Reporting Act" and what, if anything, you can do to straighten out your credit bureau file. Good luck.
Dear Susan & Co.,
I have a question, and I hope you can help. First, a little background. I am 32 years old and, until a couple of years ago, had spotless, impeccable credit. A couple of years ago, I had a period of financial difficulty, during which time I became quite late (over 60 days) on my two visa accounts. When my financial condition started gradually and slowly improving, although it was difficult, I did my best to become current. After that time period, I paid consistently and on time, and I even started sending larger payments to the visa with the higher interest rate (I'll call that one my "good" visa). The good visa has since increased my credit line, lowered my interest rate significantly and, upon my request, upgraded me to a "platinum" status, all due to my "excellent payment history" in the time period since my financial difficulty.
However, my "bad" visa has not been quite as cooperative and, upon calling them about a year ago to find out exactly what they have reported to the credit reporting agencies, they rattled off a list of late payments that, according to them, showed me having paid on time once in two years! The only time I was late was during that period of financial difficulty a few years ago, and maybe once a day or two late a few months after that. At this time, a friend advised me to start sending my payments via certified mail, return receipt requested. The first time I did this, in December 1997, they received my payment on the 7th, but didn't post it until the 11th, which was conveniently one day after the due date! I wonder how many of my "late" payments were due to this!
Despite all of this, I have been patiently paying consistently and on time, and have just been fortunate enough to receive a large bonus which enabled me to pay off my bad visa. I included a letter with my payment asking them to close my account upon payment, and to send me verification of same. My question is, must I now write to them and specifically ask them to remove my now-closed account from my credit report? I have read that you should write to all past creditors and ask them to remove old closed accounts that still appear on your credit report, which I have done, but I am not sure if accounts must be closed for a certain period of time first, or if they can remove it immediately. I also fear that because this account contains "accurate" (according to them) negative information, it might not be removable for a certain period of time. Will this have a positive impact on my credit rating, as I hope it will? Please advise.
Thank you very much for your time and consideration. Nancy
Dear Nancy:
By paying off your "bad visa" account and asking them to close out your account might have done you more harm than good. The way the "system" works, as long as your account is open, every month the creditor will report your payment history to the Credit Reporting Agencies. Even though you might not have a balance remaining, the creditor will report no activity on your account. Any late payments noted will be removed within three years. As soon as your account is closed though, the creditor stops reporting a payment record on your account. Whatever is last reported by this creditor will remain on your file for seven years. Asking a creditor to remove this report will get you nowhere. They will not do it and the Fair Credit Reporting Act says they can report your payment record for up to seven years.
You now must live with the decision you made and hope it doesn't hinder you too much in getting credit in the future.
Dear Susan & Co.,
My husband and I have recently seen a copy of his credit report and it shows his child support and the payment on there. He is not behind in payments, why do you think this is happening and can it be taken off. Its is showing that it is from the Attorney Generals office. Please help me as much as you can. Thanks, Colleen
Dear Colleen:
All child support agencies are trying to stem the trend of parents not paying their child support payments. One way they feel they can do this is by reporting to the Credit Reporting Agencies (CRA) the manner of payment child support is being paid. Non-payment of child support could possibly jeopardize a person getting credit or even insurance or another job.
Asking the CRAs or Attorney General Office to remove this notation will get you nowhere. The Fair Credit Reporting Act permits state or local child support enforcement agencies to report this information. No action on your part can or will stop them from this practice. Sorry.
Dear Susan & Co.,
I am in the process of qualifying for a mortgage and clearing up a couple of loose ends on my credit bureau.
I have a couple of credit cards that I owe between $500-$1000, is it better to continue with those accounts open and making payments or to close them myself and continue to make payments. I have never been late on either credit card and have not used them in over 3 months.
I am interested in increasing my credit score as best as possible.
Does a FICO or Beacon credit score different on a car loan purchase vs. a home mortgage?
Thanks for your help in advance. David
Dear David:
How the FICO or Beacon credit scoring system works is confidential information and I cannot tell you what action on your part will improve your score. Obviously making your payments on time and eliminating your debt will help. Other factors are taken into consideration but I don't know specifically what they are.
Your score is the same whether you are trying to finance a house or a vehicle. The only difference would be in the individual creditor and what cutoff score they have in granting credit. A liberal creditor will accept a lower score than a more demanding creditor.
Keep up your good paying habits and don't try and get too much credit in the future. This should result in your achieving your goal of increasing your credit score. Good luck.
Dear Susan & Co.,
My current credit history is excellent. I have a history of having been loaned a considerable amount of money and I've paid it all back. I have R1s and O1s all the way down. However, I've been turned down for loans because of slow-to-pays and one small charge-off in 1994. That information is going to be on my record for another three years. Also, I make nearly double in salary now, but the last creditor I attempted would only consider my salary from my previous job.
I'm doing everything right. What am I missing? Tod
Dear Tod:
It appears as if your past credit problems are still haunting you. Until your past due accounts are removed from your credit bureau file, you will experience difficulty in obtaining credit.
As the system works, it doesn't only look at whether you can afford to repay your debt, it looks at how you paid your bills in the past. It doesn't care when you had difficulty in paying your bills. Whether your credit difficulties were 4 months or 4 years ago doesn't matter. In your case, all the system sees is your credit report indicate past credit problems. Until this information is removed from your file, you are a "marked man" and will have difficulty at times in getting credit. That is just how the credit granting mechanism works.
Dear Susan & Co.,
If a man with a spotless credit rating marries a woman with a terrible credit rating, does her rating automatically affect his? This would be without jointly held accounts of any kind. Marjorie
Dear Marjorie:
Her terrible rating will not affect him. Each one of you have your individual credit bureau file and one person's credit cannot be entered into the other person's file because of a marriage. The terrible credit will affect him only if you both apply for credit jointly. This generally happens when you apply for a mortgage loan to buy a house.
Dear Susan & Co.,
I wrote a letter to the credit bureau to stop letting companies look at my credit report, to stop the sending of credit card applications. I have about fifty entries on my credit report of these inquires. what can I do. Thanks, Andy
Dear Andy:
Credit card companies that inquire about your credit for the purpose of sending you a "pre-approved" credit card solicitation are known as Promotional (PRM) and Account Review (AR) inquiries. If you apply for credit and a creditor requests a copy of your report, these inquiries are not displayed to the creditor. The only one who can find out about these inquiries are individuals themselves when they request a copy of their credit bureau file, as you apparently did. The credit reporting agencies will then note all PRM and AR inquiries for the past two years.
To stop receiving unsolicited pre-approved credit offers, you will need to contact all three major credit reporting agencies. They are Equifax at 1-888-567-8688, Experian at 1-800-353-0809 and Trans Union at 1-800-680-7293. Good luck.
Dear Susan & Co.,
Recently I applied for a computer lease and they declined due to delinquency in my account. I ordered for the credit report from the credit bureau and looked into it. I found out that 4 of my accounts have sent a negative report to the credit bureau about my payment made after 30 days in April '98. Is there any way that I can remove this from my credit report. I do have lot of other credit cards outstanding with various other companies. The four companies are - Airtouch Cellular, aline of credit in the bank checking a/c, Invent Card Services, MBNA Card Services. I still use the Airtouch cellular services. I closed the line of credit outstanding with the bank and closed the account. I paid all the money to MBNA Card services and closed the account. I still have some outstanding balance with Discover Card Services. Say, if I pay all the money that I owe to all the creditors till the last penny and then start applying for the credit to buy a new auto or a house, will I still be turned down. For some reason, due to various reasons in my life at that point, I overlooked at this accounts. I want to buy a house by Jan '99. My fear is what if I have zero dollars outstanding, will the mortgage company granting my loan or the car company that is granting my loan would turn me down. Your advice on this matter is greatly appreciated. What about the advertisements like call 1-800-YES-CREDIT and we will get your credit file repaired. What about services like that. Are they worth to try.
I really appreciate your help on this matter in advance. Have a nice day. Laxmi
Dear Laxmi:
Unfortunately, the derogatory notations being reported on your credit bureau file cannot, and will not, be removed by your creditors. Depending on how delinquent your accounts were, these notations will remain on your file from up to two to seven years. This is the penalty a consumer must suffer if they fall delinquent on their credit accounts.
Whether these derogatory notations will have a negative bearing on your getting credit in the future will depend on each individual creditor and their policy towards analyzing credit applicants. All you can do is apply for credit and see what the creditors say. Let me caution you on applying for credit with too many creditors just to see what will happen. Every time you apply for credit and a creditor checks on your credit bureau file, a notation will be made of this inquiry. Creditors do not like to see too many inquiries. This alone (too many inquiries) could cause you to be rejected.
PLEASE, do not fall for these advertisements that state they will get your credit file repaired. They cannot legally do this. Nobody, and I want to emphasize nobody, can legally remove anything that is being accurately reported from your credit bureau file. The only way that information can, and will be removed, is time.
Dear Susan & Co.,
At this time I am able to pay all my bills buy have nothing left over. However, I do have an excellent credit rating! If I set up a debt payment plan with CCCS will this hurt my credit rating. I'm really tired of struggling and only breaking even on my CC payments however, I don't want to hurt my credit rating because I would like to buy a home and may be forced to buy a new vehicle. How will seeking help from CCCS reflect on my credit ratings? Lesa
Dear Lesa:
Your participation in a DMP will not change anything which is already on your credit report. How your credit report looks after completing a Debt Management Program (DMP) will depend on what it looked like when you entered the program, the consistency of your payments, whether you increased them over time, and the individual creditor's reporting policy.
CCCS does not report to the credit reporting agencies but creditors may report that you are on a DMP and are not paying as originally agreed although they have accepted the reduced payment. While CCCS works with creditors to help consumers maintain their accounts in good standing and not jeopardize their credit rating, CCCS has no control over how your pay history is reported by individual creditors.
Dear Susan & Co.,
I have a bad credit rating based on my current credit report. How does one speed up the clean up of a bad credit report? Bob
Dear Bob:
Unfortunately, there is absolutely nothing anybody can do to speed up the time frame in removing derogatory information from a person's credit bureau file. The Federal Fair Credit Reporting Act states the length of time information remains in file is 7 years from date of last activity. No credit reporting agency or creditor wavers from this provision of the law.
Don't fall for these con artist who advertise they can clear up any derogatory reports on your file. THEY CANNOT LEGALLY DO THIS. If you fall for their line, you will just be throwing your money away. Your only recourse is to wait for 7 years to elapse before your bad credit is removed from your file.
Dear Susan & Co.,
Two years ago, my husband and I were making about $100k and enjoyed a squeaky clean credit rating. I left my job to pursue an opportunity to have my own company by becoming a partner in a well-established firm. My 'buy in' was sweat equity and I began as a commission-only employee. My salary dropped to 1/4 what I was making.
One month into this new work relationship, my car was broad-sided (totaled) and I was unable to work while undergoing physical therapy. While all this was going on, we continued to pay our bills but more slowly than some of our creditors would like. We have worked diligently since to pay off our debts with the goal of becoming debt free; and last week paid off everything but a small home improvement loan and one small signature loan (total of those is $6,000).
We are needing to buy a car because ours died last week. So we pulled our credit report and found several slow pays listed as well as two cancellations. Would it help if I wrote a letter to each creditor to put in my files? And, if so, what information should I include? Does CCCS have a form letter for this type of thing?
I'd appreciate any help you could share. Rusty
Dear Rusty:
Your writing to each creditors that is reporting you as slow pay will not alter your credit rating with them or be successful in what you are trying to accomplish, which is to justify your reason for being slow in paying. Instead what you have a legal right to do, under the Federal Fair Credit Reporting Act, is have a statement of 100 words or less entered on your credit bureau file. In this statement, you can explain your reason for the delinquent and canceled accounts. Whenever somebody requests a copy of your credit bureau file, your statement will be included in the report sent to them.
When mailing this statement to the Credit Reporting Agency (CRA), be sure to include your full name, address and Social Security number. This will assist the CRA in locating and entering your statement in your file and not somebody else file with a name similar to yours.
Dear Susan & Co.,
I have a credit problem. In 1991 I moved from Waco,Tx to start my life over. I left behind a couple of liabilities - Lacks Furniture [$3300], and a $180.00 utility bill. Since then I have no bad marks on my report. I want to buy a house but can not because of these two negatives They are charge-off as of Oct. 1991. Any advice will be greatly appreciated.
P.S. I now live in Austin, Texas. Thank You. Barbara
Dear Barbara:
Keep the faith. A solution is in sight. All Credit Reporting Agencies (CRA) are regulated by a Federal law known as the "Fair Credit Reporting Act" (FCRA) that states the longest anything derogatory can remain in your file is 7 years from date of last activity. Generally this date is the date of charge-off.
You state these accounts were charged-off in October, 1991. That means they must be removed from your file by November, 1998, only 6 months from now. In November, 1998 request a copy of your credit bureau file to see that these accounts are removed. If not, contact the CRA and demand that they be eliminated using the FCRA as your reason for this request. Good luck.
Dear Susan & Co.,
My husband and I are trying to buy a house, because of a divorce in 1990 his credit history shows two outstanding balances one is a chargeoff the other just a collection. We are making arrangements to pay these off now but the firm with the chargeoff says that all they will report is that it is still a chargeoff but paid. How will this affect our credit history and how long does negative information stay on your credit report? Saccarla
Dear Saccarla:
The creditor is correct in stating the charge-off notation will still remain even though the account is paid in full. How this affects your ability to get credit in the future depends on the individual creditor. Generally speaking, your ability to get credit will still be difficult even though the debt is now paid. The only exception will be your ability to get a mortgage loan. Most mortgage companies will consider applicants for a loan, provided any derogatory credit has been paid in full.
Credit reporting agencies are regulated by a Federal law known as the Fair Credit Reporting Act (FCRA). The FCRA states the longest any charged-off account can remain on a consumer's file is seven years from date of last activity. Generally, the date of last activity is the date of charge-off. This date should be noted on the credit bureau file. It sounds like your husband's charged-off accounts are ready to be removed permanently from his credit bureau file.
Dear Susan & Co.,
A few years ago I began a secured credit card program to rebuild my bad credit. The card is now unsecured and my credit is doing much better. I purchases a brand new car a month ago that was financed by a very large bank. I've recently began looking for a home to purchase. With my income the house is easily affordable but a civil judgment from 1993 is standing in my way. What can be done about this? Please advise at soonest. Chuck
Dear Chuck:
All credit reporting agencies are regulated by a Federal law known as the Fair Credit Reporting Act (FCRA). The FCRA states the longest a civil judgment can remain on your credit bureau file is seven years from the date filed. That means your judgment will remain until sometime in the year 2000. There is absolutely nothing you can do to have this blemish removed prior to that date. After seven years, by law, this notation must be removed.
Dear Susan & Co.,
Several years ago, my husband and I had financial difficulty when he lost his job. In order to make things more reasonable (and not go down the tubes completely) we joined the Consumer Credit Counseling Service. The assistance was invaluable.
I recently received a copy of my credit report, and two of the accounts that I paid through CCCS are noted *Closed at Grantor Request.* These accounts were not closed before the CCCS process, so why is that notation there. I would think that since the closing was my decision, it would not be noted that way. Is this what is normally done? Will future creditors think that the companies closed the accounts, and not offer me credit? Can I have that changed through the dispute process?
Thank you in advance. Paula D
Dear Paula:
A notation "Closed at Grantor's Request" should not have a negative impact on your credit rating. These notation happen quite frequently on consumer's files. You cannot have this notation changed through a dispute process either. This is the creditor's decision and you have no legal recourse to dispute what the creditor decided to do, which is close your account.
What you can do is contact these creditors and tell them about these notations. Ask them if they will reactivate your accounts again. If you paid these creditors satisfactorily while on your debt management program, and your credit report shows all satisfactory dealings, your chances of getting these creditors to reactivate your accounts are good. Good luck.
Dear Susan & Co.,
I just graduated from school. I have about $4,500 in credit card debt and $25,000 in student loans that will come due in December. One of my cards is a charge-off and I have almost paid off the collection agency. Is there a way I can put a letter in my report letting people know that I am now out of school and am able to fulfill all of my credit obligations. I know being in school is a lousy excuse but it is a truly honest reason for where I am now. I need to purchase a new auto soon and I want to do everything I can to be able to qualify for a loan. What is your advice? Scott
Dear Scott:
Yes, you can have a notation entered into your credit bureau file explaining your circumstance and the reason for your past delinquency. Based on my experience, I have not found this to be very effective. The way the system generally works today, everything is computerized. They enter your qualifications into a computer and a computer gets a copy of your credit bureau file. The computer analyzes your qualifications and only knows that you have a charged-off account. The computer can't read your letter of explanation so you are then turned down because of this charged-off account.
Instead, when you apply for an auto loan, explain to the credit/loan officer your past credit problems. Mention you do have a charged-off account showing on your credit bureau file but you have since paid this balance in full. Ask the credit/loan officer if you can still be considered for credit. In this way you can hopefully have an individual, and not a computer, give your application consideration. Good luck.
Dear Susan & Co.,
My fiance was just turned down for a small bank loan because he had a tax lien, though the report shows it was paid in 96. Also they said he was a slow pay one month on a credit card and his student loan. All this info is true and I know it takes 7 years to have this information stripped from his report, but I see there are some websites that advertise that can help you get this information removed legally. One company ask for $19.95 to get the free software and then there's another for $39.95. Are these scams? Is there anything he can do get these things taken off. My credit is excellent and I'm concerned once we are married, we won't qualify for a home loan because of this. Thank you. Zen
Dear Zen:
Don't fall for these advertisements that want to charge you to help you get information removed from a credit bureau file. This is a scam. If the credit reporting agencies (CRA) are reporting accurate information, nobody can legally get this accurate information removed. The only way this information will be removed is through time. After 7 years, by law, it must be removed.
If the information being reported is not accurate, you don't need to pay anybody to have the inaccurate report corrected or removed. All you have to do is write to the CRA giving them information on the disputed item. The CRA will gladly adjust the file to show the correct information or remove the item if warranted.
Dear Susan & Co.,
I have a question about reporting. I had a bill I incurred in 1989, which was apparently handed to collections in 1996, and in 1997 it was placed on my report. I paid the bill when I saw the mark, but my question is, is it normal and allowed for someone to 'hold' a bill for 9 years before placing it on your report? The Fair Credit Act says negative credit can stay on your report for 7 years, but under this schema, my delinquency follows me for a whopping 16 years. Can I petition to have it removed and have a leg to stand on? Elizabeth
Dear Elizabeth:
You absolutely do have the right to have a Credit Reporting Agency (CRA) remove any debt from your file that is over seven years old. The Fair Credit Reporting Act states (in condensed form): "The 7-year period shall begin upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency." Contact the CRA, quote this provision of the law and demand that they remove any account that falls into this seven year time frame.
Dear Susan & Co.,
I feel that 7 years is a very long time to keep adverse information on one's credit report. Who or what government agency makes the rules that determine the length a time that an adverse entry will remain on your credit report? Also do you know if there is discussion orplans to shorten the time length? I personally feel that 3 years is plenty of time. I could pay a delinquent bill in full at the end of it's six month of being delinquent and closed the account yet I have to wait 6.5 years for this to come off my record. Is this fair? Saul
Dear Saul:
The seven year time frame on having derogatory items stay in your credit file is spelled out in the Federal Fair Credit Reporting Act. All credit reporting agencies abide by this act and getting them to change their policies and procedures from what is spelled out in this law would be impossible. They just won't do it.
Congress recently held hearings to revised certain provisions of the Fair Credit Reporting Act. The new provisions went into effect October 1, 1997. The time frame on reporting information was never considered to be changed. Since the seven year period on reporting derogatory information is a Federal law established by Congress, it is here to stay and you must accept that fact.
Dear Susan & Co.,
In 1992, there was a Judgment for rent arrears filed against myself and my roommate. However prior to actually going to court my roommate, the apartment property manager, and myself signed a document indicating that I was responsible for half of the arrears and my roommate was responsible for the other half. Effective Dec. of 1994 I paid my half and received a letter from the complex indicating that I fully cleared all financial responsibilities with them. I am desperate, to date the judgment still remains active and is reflected on my credit report negatively. Is there any advice you can give me to get the apartment complex to take care of this matter. Thank you, Desperate
Dear Desperate:
What I'm about to tell you is not what you are wanting to hear but I must be honest with you. Because the judgment against you is a matter of public record, recorded at the local court house, there is no way possible for you to have this notation removed from your credit bureau file. The judgment notation will remain on your file for seven years from date of judgment, even though you have paid the debt.
The way information is reported on a person's credit bureau file is spelled out in a Federal law known as the Fair Credit Reporting Act. Asking a credit reporting agency (CRA) to deviate from this act will not succeed. Whatever this act states the CRA can or cannot do is the way information will be reported, no exceptions. And this act states the CRA can report judgments for seven years. After seven years has gone by, the judgment will still be a matter of public record but it can no longer be noted on your credit bureau file.