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Re: GR's Guide To Changing Bad Credit Into Amazing Credit In Less Than 6 Months
Quote:
Originally Posted by
michele11
Why are refis bad? More credit for the lender. I get things in the mail from wells all the time for their free 3 step refi. I've done it 3 times to lower my rate. Didn't cost me a thing. If it were a bad thing for them I don't know why they openly advertise it.
Its not dumb, its totally smart. They have refis with auto loans too. Its exactly the same thing as your loan being transferred lenders..Im assuming it would show up just like that on a credit report, with a $0 paid off balance for the old loan and a brand new loan with the new company listed as a new account & starting around the month the previous one left off.
Does your credit report say anything on the item with the old lender? Or does it just show "paid in full / transferred / closed with a $0 balance"? If it doesn't mention refinance, then I don't see how on earth anyone could ever tell the difference between a refinanced loan and someone who buys multiple properties in the same price range and pays them off before the loan is up.
I've never refi'd anything, but I have had a loan change lenders, and it was perfectly fine. I can't understand why it would be a bad thing. If a bank doesn't want to do business with you because you are maximizing your OWN money and are smart enough to do so, then you don't want to do business with that bank TBH because they're shady. Sorry, but to me, even if it did say "closed and refinanced" I would still think that person is a worthwhile customer because they have proven they are knowledgeable and responsible with their own money.
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Re: GR's Guide To Changing Bad Credit Into Amazing Credit In Less Than 6 Months
No melonie was saying mortgage companies don't like refis.I was referring to her post. Yeah I believe it shows the old amount and says paid in full. its wells Fargo so anyone who looks at the report can see it was a refi.
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Re: GR's Guide To Changing Bad Credit Into Amazing Credit In Less Than 6 Months
Believe me it doesn't hurt your credit. I've owned homes for 24 years and have done multiple ref is over the last 20 years .
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Re: GR's Guide To Changing Bad Credit Into Amazing Credit In Less Than 6 Months
Fucken phone I was trying to quote vamps post!
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Re: GR's Guide To Changing Bad Credit Into Amazing Credit In Less Than 6 Months
Under new regulations and policies lenders have to look for responsibility with credit.
The original issue in this part of the discussion was opening and closing credit cards every few months. This kind of turn over with credit looks irresponsible to lenders.
They know when you refinancing. They are trained to read credit reports. They are trained to look for issues people are trying to hide or game the system.
Someone who has 24 years of positive mortgage history on their credit report isnt going to have the same issues as someone who is rebuilding credit or applying for their first mortgage.
As I posted the FICO website agrees with me. Take it how ever you want.
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Re: GR's Guide To Changing Bad Credit Into Amazing Credit In Less Than 6 Months
Quote:
Originally Posted by
Vamp
The original issue in this part of the discussion was opening and closing credit cards every few months. This kind of turn over with credit looks irresponsible to lenders.
They know when you refinancing. They are trained to read credit reports. They are trained to look for issues people are trying to hide or game the system.
No, I never ever said that. I said when you are building or re-establishing credit, you close the original card because it is a secured card, but you opened another one 3-4 months later already so the second card becomes your oldest card. That was talking about closing ONE card, your first cc with a low limit unless you gave an unnecessary large deposit. The card secured so the limit never increases, which makes a lot of sense to eventually close it.
I flat out had a company tell me they couldn't give me a higher credit line because one of my cards (the secured one) had a low limit in comparison to my other cards. Closed it, and my credit limit skyrocketed a month later with the company. So credit limit is definitely a factor some several lenders. By closing the secured card at one year, you don't have to worry about that anymore.
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Re: GR's Guide To Changing Bad Credit Into Amazing Credit In Less Than 6 Months
Quote:
Originally Posted by
Vamp
Under new regulations and policies lenders have to look for responsibility with credit.
The original issue in this part of the discussion was opening and closing credit cards every few months. This kind of turn over with credit looks irresponsible to lenders.
They know when you refinancing. They are trained to read credit reports. They are trained to look for issues people are trying to hide or game the system.
Someone who has 24 years of positive mortgage history on their credit report isnt going to have the same issues as someone who is rebuilding credit or applying for their first mortgage.
As I posted the FICO website agrees with me. Take it how ever you want.
Are you saying it's irresponsible to refinance?
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Re: GR's Guide To Changing Bad Credit Into Amazing Credit In Less Than 6 Months
I know you want to think I am making this all up.... but im really not. All the info below comes from the FICO education center about how FICO scores are calculated.
http://www.myfico.com/CreditEducatio...of-Credit.aspx
Have credit cards – but manage them responsibly
Having credit cards and installment loans with a good payment history will raise your FICO Score. People with no credit cards tend to be viewed as a higher risk than people who have managed credit cards responsibly.
What types of credit accounts you have
Do you have experience with both revolving credit and installment type accounts (auto loans, mortgages etc), or has your credit experience been limited to only one type?
How many types of credit accounts
Your FICO® Score also looks at the total number of accounts you have. How many is too many will vary depending on your overall credit picture.
How many new accounts you have
Your FICO® Score looks at how many new accounts you have by type of account. It also may look at how many of your accounts are new accounts.
Don't open new accounts too rapidly
If you have been managing credit for a short time, don’t open a lot of new accounts too rapidly. New accounts will lower your average account age, which will have a larger effect on your FICO® Score if you don’t have a lot of other credit information. Even if you have used credit for a long time, opening a new account can still lower your FICO Score.
http://www.myfico.com/CreditEducation/New-Credit.aspx
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Re: GR's Guide To Changing Bad Credit Into Amazing Credit In Less Than 6 Months
^^^ All that means is that:
1.) too many accounts opened in the last year will temporarily lower your score, and
2.) FICO goes off the average age of your accounts.
How is that... bad? You absolutely cannot build credit without credit cards. You have to open a bunch at some point, especially when rebuilding credit. Like I said a million times, I was only talking about closing your ONE secured card, and only because the credit limit won't raise on that card so its pointless to keep open.
Also, if your loan lender is transferred, it will turn into a new account, so there is no way that looks bad. It would look the same for a new account or a refi as well. That actually helped my score TBH when it happened to me.
And honestly (and I've done this successfully), you can dispute closed cards and half the time they are deleted off your report completely because there's absolutely no incentive for a company to take time out of their day to verify a closed & paid off card.
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Re: GR's Guide To Changing Bad Credit Into Amazing Credit In Less Than 6 Months
returning to the basics ...
(snip)The first thing you need to understand is how your credit score is determined. General information is available from Fair Isaac, although the exact algorithm used to determine your credit score is a secret closely guarded by each credit agency. The general guidelines about how your credit score is compiled are broken down into five main categories, with the following percentage weight for each:
•35% payment history (only includes payments later than 30 days)
•30% debt-to-credit ratio
•15% length of credit history
•10% new credit
•10% type of credit in use (installment, revolving, consumer finance) (snip)
thus opening new credit accounts provides a negative force in the 'new credit' category, but also potentially provides a positive force in the 'debt to credit ratio' category which has a higher weighting factor. The decision regarding opening additional credit accounts actually boils down to the total amount of existing credit lines available versus total verifiable income. Unofficial rule of thumb is that total ( unsecured ) credit lines available should be somewhere between 15% and 30% of verifiable annual income. Unofficial rule of thumb also is that the actual amount of credit lines utilized should be between 15% and 30% of total credit lines available.
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Re: GR's Guide To Changing Bad Credit Into Amazing Credit In Less Than 6 Months
When calculating debt to income ratio...I know the debt aspect includes mortgage, student loans, minimum credit card payments, car loans but I've never been able to get a clear answer as to whether or not other recurring monthly expenses like rent or a cable bill is included also.
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Re: GR's Guide To Changing Bad Credit Into Amazing Credit In Less Than 6 Months
Quote:
Originally Posted by
lynn2009
When calculating debt to income ratio...I know the debt aspect includes mortgage, student loans, minimum credit card payments, car loans but I've never been able to get a clear answer as to whether or not other recurring monthly expenses like rent or a cable bill is included also.
No, its not included. Rent, cable bill, utilities, cell phone are not on your credit report so they don't count. They will be on your credit report as a collection account if you don't pay them though.
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Re: GR's Guide To Changing Bad Credit Into Amazing Credit In Less Than 6 Months
OKay, I think I made a mistake. I got my letter from CHexsystems and immediately paid off the debt (BOA). BOA sent me a letter saying that I paid this in full and I'm going to mail that to them.
Then, I got my credit report for experian and there were 4 things on there that I paid off in full... are they just going to sit there or can I get them removed? How do I get them removed if I already paid for them. OMG :'( I misread your advice and now IDK what to do. What's the point of paying them in full if they don't get removed???
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Re: GR's Guide To Changing Bad Credit Into Amazing Credit In Less Than 6 Months
Should I send a certified pay to delete letter even though I already paid? Should I call and ask them to manually delete it? Should I sent a good will letter to all four creditors? I feel like I just fucked myself. I want to cry.
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Re: GR's Guide To Changing Bad Credit Into Amazing Credit In Less Than 6 Months
^^^ that's a dicey situation since you did pay off the debts. Thus it's difficult to dispute the accuracy of the reports. I'd try sending the 'good will' letters.
However, 'early' repayment is certainly better than 'late' non-payment. So even if your 'early' repayment reports hang around for a while, it isn't the end of the world.
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Re: GR's Guide To Changing Bad Credit Into Amazing Credit In Less Than 6 Months
Should I call them first or proceed with the good will letters?
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Re: GR's Guide To Changing Bad Credit Into Amazing Credit In Less Than 6 Months
It depends what kind of debt but it will show for 7 years. When you paid were they in collections? If so you should of got something in writting saying they'd remove it. Otherwise it's hard. i had a macys that was 3 months late( I never used it only like for foundation. I paid it in full and it still shows as a deliquent account but with zero ballance.
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Re: GR's Guide To Changing Bad Credit Into Amazing Credit In Less Than 6 Months
Yes, they were in collections. I thought (stupidly) that if I paid them, they would be removed in about 6 months to a year. :'(
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Re: GR's Guide To Changing Bad Credit Into Amazing Credit In Less Than 6 Months
Quote:
Originally Posted by
arielbriel
What's the point of paying them in full if they don't get removed???
There's really no point TBH. But most people don't know that.
At this point, a credit repair person would suggest: wait 6 months and then dispute as not yours, and they likely won't reply and it will get deleted. But they may reply. They would also likely suggest to try and call the company and and tell them its not yours too. A credit repair person would justify the ethics of this as that they should be able to prove it belongs to you regardless.
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Re: GR's Guide To Changing Bad Credit Into Amazing Credit In Less Than 6 Months
Quote:
When you paid were they in collections? If so you should of got something in writting saying they'd remove it. Otherwise it's hard. i had a macys that was 3 months late( I never used it only like for foundation. I paid it in full and it still shows as a deliquent account but with zero ballance.
This is a critical point with any debt 'negotiations'. Once the delinquent debt has actually been repaid or 'settled', the creditor has absolutely no incentive to see that the repaid or 'settled' debt is removed from credit reports. But BEFORE a full or partial 'settlement' payment is actually made, the debtor does have some amount of leverage to include a credit report 'whitewash' by the creditor as a condition of payment.
Quote:
There's really no point TBH. But most people don't know that.
In the 'real world', this isn't exactly true. At least with a full or partial 'settlement' payment, the debt is 'satisfied' and the credit report clock gets set in motion without future possibility of a 'reset'. Non-payment can result in the bad debt being resold, which raises the possibility of unpaid interest / penalty charges leveed by the new creditor causing another entry on credit reports as well as 'resetting' the debt clock. By the letter of the law this is no longer allowed, but in 'real world' terms it often still happens.
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Re: GR's Guide To Changing Bad Credit Into Amazing Credit In Less Than 6 Months
Quote:
Originally Posted by
Melonie
This is a critical point with any debt 'negotiations'. Once the delinquent debt has actually been repaid or 'settled', the creditor has absolutely no incentive to see that the repaid or 'settled' debt is removed from credit reports. But BEFORE a full or partial 'settlement' payment is actually made, the debtor does have some amount of leverage to include a credit report 'whitewash' by the creditor as a condition of payment.
Yes, but if the creditor doesn't respond to the dispute of "not mine" within 30 days then it gets deleted. They often don't because they don't care since they already got the money. Its a waste of time for them.
Quote:
Originally Posted by
Melonie
In the 'real world', this isn't exactly true. At least with a full or partial 'settlement' payment, the debt is 'satisfied' and the credit report clock gets set in motion without future possibility of a 'reset'. Non-payment can result in the bad debt being resold, which raises the possibility of unpaid interest / penalty charges leveed by the new creditor causing another entry on credit reports as well as 'resetting' the debt clock. By the letter of the law this is no longer allowed, but in 'real world' terms it often still happens.
It actually can't be added back to your report when sold. I mean it can be, but it must immediately be deleted if you dispute it. That happened to me actually. Just about the best they can do is have the account listed, and then underneath say: SOLD TO: __new_company_name__. But the date of last activity is still from the original creditor. If its been more than 7 years, it has to fall off regardless of when it was sold.
I mean if its a student loan or something, you HAVE to pay it at some point, but if its not, then nothing happens to you if you don't pay it and if they never sue you over it.
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Re: GR's Guide To Changing Bad Credit Into Amazing Credit In Less Than 6 Months
Quote:
Originally Posted by
Melonie
This is a critical point with any debt 'negotiations'. Once the delinquent debt has actually been repaid or 'settled', the creditor has absolutely no incentive to see that the repaid or 'settled' debt is removed from credit reports. But BEFORE a full or partial 'settlement' payment is actually made, the debtor does have some amount of leverage to include a credit report 'whitewash' by the creditor as a condition of payment.
In the 'real world', this isn't exactly true. At least with a full or partial 'settlement' payment, the debt is 'satisfied' and the credit report clock gets set in motion without future possibility of a 'reset'. Non-payment can result in the bad debt being resold, which raises the possibility of unpaid interest / penalty charges leveed by the new creditor causing another entry on credit reports as well as 'resetting' the debt clock. By the letter of the law this is no longer allowed, but in 'real world' terms it often still happens.
THis happened to me. I had two small like under 40 dollar medical things that were supposed to drop off in june . Well there they were again. I saw when I got my car last month and they brought down my score a lot too!
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Re: GR's Guide To Changing Bad Credit Into Amazing Credit In Less Than 6 Months
Quote:
Originally Posted by
michele11
THis happened to me. I had two small like under 40 dollar medical things that were supposed to drop off in june . Well there they were again. I saw when I got my car last month and they brought down my score a lot too!
Have you tried disputing as "not mine" and then "wrong open date"?
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Re: GR's Guide To Changing Bad Credit Into Amazing Credit In Less Than 6 Months
^^^ yup agreed that this sort of stuff was supposedly 'outlawed' as a result of recently enacted consumer protection regulations. Unfortunately, that doesn't mean it can't / won't still happen. And indeed it's possible that disputing these sort of credit report entries can result in a restoration of the original debt 'clock' or the deletion of the report entry ( based on lack of a dispute response from the creditor ). But this also requires that the person constantly monitor their credit report and constantly file 'new' disputes when unpaid debts 'resurrect' themselves back onto the credit report under a new creditor name with a 'reset' debt clock.
Also, I'm glad that you brought up the issue of unpaid student loans. Indeed, these will never 'go away' ... from a credit report or from the 'real world'. These days, the IRS has the authority to 'confiscate' tax refunds, to 'garnish' social security and other gov't payments, and even to place leins on estate property after you die, to satisfy unpaid gov't backed student loans.
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Re: GR's Guide To Changing Bad Credit Into Amazing Credit In Less Than 6 Months
Quote:
Originally Posted by
Melonie
returning to the basics ...
(snip)The first thing you need to understand is how your credit score is determined. General information is available from Fair Isaac, although the exact algorithm used to determine your credit score is a secret closely guarded by each credit agency. The general guidelines about how your credit score is compiled are broken down into five main categories, with the following percentage weight for each:
•35% payment history (only includes payments later than 30 days)
•30% debt-to-credit ratio
•15% length of credit history
•10% new credit
•10% type of credit in use (installment, revolving, consumer finance) (snip)
thus opening new credit accounts provides a negative force in the 'new credit' category, but also potentially provides a positive force in the 'debt to credit ratio' category which has a higher weighting factor. The decision regarding opening additional credit accounts actually boils down to the total amount of existing credit lines available versus total verifiable income. Unofficial rule of thumb is that total ( unsecured ) credit lines available should be somewhere between 15% and 30% of verifiable annual income. Unofficial rule of thumb also is that the actual amount of credit lines utilized should be between 15% and 30% of total credit lines available.
I dont know where you got this snippet but it isnt correct.
Your debt to income ratio is not included in the calculation of your credit score.
The debt to income ratio is a calculation that is done by the bank when you apply for a loan. The only way your income level is known is when you include it on a loan application. It is then verified by your w-2s or taxes. The debt level used in the calculation is based on the information about current debt on your credit report.
The bank uses both your credit score and debt to income ratio to decide loans. They are two separate items.
This is the information from the FICO site itself about what goes into the calculation of the score.
http://www.myfico.com/images/CreditE...ebreakdown.png
http://www.myfico.com/CreditEducatio...YourScore.aspx