JBirley15

119 Contributions 1,140 People Helped Top Contributor

Member Since: September 2012

Most Helpful Contribution

Credit card utilization and your credit score

May 07, 2013
Helpful to 736 out of 784 people

I learned my lesson about the high utilization on a single card the hard way. After building my score up to over a 750 in just 7 months (over a 100 point increase), paying off 2 credit cards in full, I got those 2 cards to give me a great balance transfer deal (0% for 12 months). My third card has a terrible interest rate so I did the balance transfer to my two cards, and although my overall utilization rate is actually lower due to payments I have made, my credit score tanked 76 points practically overnight.  Never do a balance transfer that will leave a single card with over a 90% utilization rate even if your overall rate is good. Luckily I had the money to get the rate under 90% immediately, but watching my score tank 76 points really hurt haha, especially when you have to wait weeks for your due date and the new balance to report.

The advice in the CK article mentions single card utilization rate impact referring to those with little credit history; however, I have a long and overall good credit history and it still tanked my score 76 points, so do not feel comfortable with that advice they gave, no matter your credit history...it hurts.

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Credit card utilization and your credit score

May 07, 2013
Helpful to 736 out of 784 people

I learned my lesson about the high utilization on a single card the hard way. After building my score up to over a 750 in just 7 months (over a 100 point increase), paying off 2 credit cards in full, I got those 2 cards to give me a great balance transfer deal (0% for 12 months). My third card has a terrible interest rate so I did the balance transfer to my two cards, and although my overall utilization rate is actually lower due to payments I have made, my credit score tanked 76 points practically overnight.  Never do a balance transfer that will leave a single card with over a 90% utilization rate even if your overall rate is good. Luckily I had the money to get the rate under 90% immediately, but watching my score tank 76 points really hurt haha, especially when you have to wait weeks for your due date and the new balance to report.

The advice in the CK article mentions single card utilization rate impact referring to those with little credit history; however, I have a long and overall good credit history and it still tanked my score 76 points, so do not feel comfortable with that advice they gave, no matter your credit history...it hurts.

will connecting my bank account effect my credit score?

Mar 03, 2014
Helpful to 76 out of 79 people

No, your bank account has no bearing on your credit score. The credit bureaus do not keep track of your personal finances (checking or savings), they only look at personal or vehicle loans, mortages, credit cards, etc.  Connecting your account on here is simply for your financial management benefit, as you can have all of your up-to-date financial information in one place. Your credit score will still be based solely off of what is reported by Transunion, so even recent payments on a credit card will not effect your credit score until it is actually reported by the credit card company.

How long does it take for a late payment to clear off of your credit report?

Apr 08, 2013
Helpful to 142 out of 158 people

Although the previous poster provided good advice regarding getting your score up despite having a late payment., the actual answer to your question is 7 years, and it does not matter what type of account it is, all late payments fall off after 7 years. So currently if you had a late payment in April 2006, it will be leaving your credit report this month.

what is the best way to handle debt that is in collections?

Jul 15, 2013
Helpful to 8 out of 8 people

You have two different ways and dpends on your deisred outcome, but most creditors won't negotiate for both. 1) If your credit score is important to you, you will save up how much you owe them and tell them "I will pay you in full if you remove the reporting from my credit score." Get that agreement in writing. If you pay off a collection agency, it will showed as paid off on yourcredit, but it will still show for 7 years and is a big negative. You want them to completely remove it, and your credit will make a huge jump.  Or 2) if saving money is most important to you, you can negotiate the amount you pay with them. Debate the fact you can't afford to pay the full amount, but you are willing to pay like half of it right now and be done with it. They will usually go for it.  There is essentially a 3), but you get much benefit out of it, if you can't afford to pay them a lump sum, they will set up payment plans at an amount you can afford. They likely won't reduce the amount you owe and won't remove it from your score; however, it will show on your credit as "paying as agreed" and then as paid in full once you pay it off (this is good for you credit, but minimal compared to having it removed). All 3 of these are better than ignoring them and leaving it as an unpaid debt on your credit.

How can I get old late payments removed from my credit history?

Apr 04, 2013
Helpful to 12 out of 13 people

Agree with the previous poster. My situation was just like yours, got late payments while in college, and it is currently the only thing on my credit that is bad. I was advised to send them a goodwill letter (google it for examples), and I did, but of course both lenders sent me a correspondence that said since they are true and accurate reportings they will not remove them, that is despite having paid off the car loan in full over at over a year and a half ago (after making the next 3 years on time), and my other account has been paid flawless for 4 years since, but still no go. They drop off after 7 years, so we just have to count down. Despite them I still got my credit to cross the 750 mark, so target the areas you can control.

Can i get a car Loan even doe i have a low credit score

Jul 15, 2013
Helpful to 6 out of 6 people

With a low credit score you get yourself in traps. It is unlikely that you will be approved for a car loan by a legit servicer, any place that will approve you for a car loan with a 518, is going to be a company in the business of screwing you over. They are going to charge you 25% interest and you will end up paying far too much for the car you purchase. I would steer clear of those type of "everyone is approved" type car lots, they are very shady. However, if you are in dire straights and you have no choice then be very aware of what they put in that contract, waht your interest rate will be, and request the breakdown of how much you will end up paying for the car across the life of the loan (they have this information). From there you can see what you will actually pay when all is said and done and decide for yourself if that car is worth it. Remember this will likely immediately put you upside down on your car payments, meaning you will owe way more than your car is worth, if you get into an accident that totals your car the car insurance company won't give you the amount to cover your loan, meaning you will be out of a car and still making payments. Similarly if your car gets repo's you will still be making car payments long after you lost the car. If you need a car, save up some cash and buy a beater to get you around until you are able to repair your credit.

what is a hard credit inquiry?

Feb 14, 2013
Helpful to 6 out of 6 people

Anytime to request credit the company/servicer will request your credit report and score to determine if you are worthy for a credit extension/loan. Everytime you request a new mortgage, car loan, credit card, etc, you have to sign a paper authorizing them to pull your credit, that results in a hard inquiry (they can come from other sources as well such as collection agencies are allowed to do a hard inquiry when tracking you down). Basically you do not want to go out applying for a lot of lines of credit. They fall off after 2 years, so you basically just need to space out credit applications because you do not want to have too many hard inquiries at once.

On the otherhand the requests like CK and other credit score, monitoring, etc pull are called soft inquiries and do not affect your credit score. Same with your current credit card companies, from time to time they pull your credit again to see if you are eligible to have your credit line increased, those are soft inquiries as well, partly because you already have an open line of credit with them.

Should I use, or not use my credit cards?

Jun 03, 2013
Helpful to 10 out of 11 people

No, it is best to use your card every month. Although your use is pretty responsible and it will reflect as such when viewed throughout time, I would recommend lightening its use. The thing about credit utilization and how you are using it now is that you are charging it up to a high percentage then paying it off, high utilization percentage on a single card can hurt your credit score. However do know that most creditors take into account the fact that it is a low limit card and they actually won't take that high utilization rate into consideration when considering your credit worthiness in light of your responsible usage (paying it off in full each month). The best way to utilize your card is to just charge gas for your vehicle or a small grocery tab (say around $50 out of your $200 limit). Leave that balance on your card until your bill statement posts and then pay it off in full by the due date. Rinse and repeat (you won't be charged any interest). The thing is although you are paying it off in full 2-3 times a month, you only get a benefit for paying off your Statement Balance each month. By doing this you will keep your utilization rate around 25% which is good, your continuous use and paying off of the statement balance will cause your credit card company to eventually increase your limit due to your responsible use, and you will be getting a monthly on-time payment history; all 3 of which will boost your credit.  Don't worry about the credit anamolies too much, they happen all the time. Just keep you credit moving in the right direction as you are and it will stop dropping and start going up. Just pay attention to each category that has an effect on your score and make sure you are doing what needs to be done in each area...and keep using that card.

New auto loan w/ 659 credit score...foreclosure looming.

Jul 16, 2013
Helpful to 5 out of 5 people

I really doubt you can at this moment, especially not a $20k car. They are going to see 24 straight months of late payments on your mortgage and know foreclosure is looming. At the moment you are very high risk. I would do what you can to not hold up the foreclosure and let it go through to get it over and done with (not saying you are holding it up, just saying if anything is in your control). Plan to build your credit back up for the next year after that. Get your cards paid off and then use them once a month after that and pay them off in full each month. Keep paying on your car payment, I'm not sure there is even a need to pay it off early, the on-time payments might help you more than paying it off in full in your situation (maybe keep paying on it until just prior to car loan shopping, then pay it off). Go join a credit union right now if you don't already have one, and use it as a savings account for the next year. With a credit union you have the chance to sit down and speak with the person approving the loan and you have a much higher chance of them taking a chance on you; not to mention much lower interst rates (the worst rate at my cu is 11%, with you current score a private lender would be like 18%). After a year has passed after your foreclosure is resolved, then I would revisit your credit score at that time, hopefully with a low utilization rate, a year of on-time payments on all of your accounts & late payments all 1 year+ old, a lower debt-to-income ratio you should be in much better shape than you are now. You will still have the hit from your foreclosure, but by waiting a year you will be showing yourself in a good place at that current moment. Unless you absolutely need the car, then you could try one of the car lots that cater to people with credit issues, you will end up paying a ridiculous interest rate, but it will get you in a car.

How to pay off collections

May 14, 2013
Helpful to 4 out of 4 people

In addition to the other commenter's post, if the dispute through the credit bureaus does not get them removed, on your credit report (annualcreditreport.com to get all 3 for free) it will give a name, address, and sometimes a phone number of the collection agency. If you need to deal with them and it turns out they provide you with documentation and you then recall that the debt is legitimate, you need to offer to pay the amount off in full, if and only if they remove the report from your credit score. They make this arrangement frequently. Get them to agree to that and get the agreement in writing. However, hopefully you can get them removed by disputing it through the credit bureaus and do not have to resort to that.

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