The Entrepreneur Forum | Startups | Entrepreneurship | Starting a Business | Motivation | Success

Improving Credit Scores

Diane Kennedy

Bronze Contributor
Aug 31, 2007
795
209
49
I have spoken with Stephen Snyder before. His latest emphasis is on improving your credit after bankruptcy, but there is a book of his still out there that is priceless, "Do you make these 38 mistakes with your credit?" I think it's self-published. It's one of those smaller books with just pearls of wisdom. Not a deep read by any means.

Here's the basics of the program he suggests:

First of all, get a copy of your credit from all three of the reporting bureaus.

You will likely get a loan based on the middle score. So, whichever one it is, that's the one to concentrate on.

Now read what the issues were that reduced your credit score from the perfect 850. They'll be in order of the most impactful first.

That's the one to concentrate on fixing. Give me some ideas of the type of items and I can walk you through some of the correction actions you might take.

Basically anyone can clear up their past credit in 6 months or less using his techniques.
 

Don't like ads? Remove them while supporting the forum. Subscribe.

andviv

Gold Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
Summit Attendee
Speedway Pass
Jul 27, 2007
5,419
2,190
625
Washington DC
I will check that book, I added it to my list.

One that happened to me some years back was a collection agency that said I had not paid a co-payment for the insurance at a doctor's appointment. the doctor's office, instead of billing me, sold the $25 bill to this company that just added it to my credit report. That made me lose more than 50 points in my score and made my credit hell for some time.

The biggest one I am seeing these days is people that have been late with their mortgage payments so their credit scores get destroyed. What can be done in those cases other than waiting for a long time?
 

andviv

Gold Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
Summit Attendee
Speedway Pass
Jul 27, 2007
5,419
2,190
625
Washington DC
bump for Diane

by the way, credit scores is a topic I really like, go figure.
 

santiago

Contributor
Aug 20, 2007
108
25
22
The biggest one I am seeing these days is people that have been late with their mortgage payments so their credit scores get destroyed. What can be done in those cases other than waiting for a long time?
I had this happen to me a few years ago. I tried two approaches and honestly don't know which worked, but the late indicator was removed in a few months.

1. I wrote a letter to the Bank and asked if they could change their entry on my reports, explaining that this was the one blemish in a few years of making timely payments to them.

2. I disputed the item with my the 3 credit agencies.

I'm guessing it has a lot to do with luck..
 

JesseO

Contributor
Jul 25, 2007
548
31
33
Phoenix, AZ
Had one late payment in something like 5 years...I called the bank and they said they would clean it up because of the good record.
 

Russ H

Gold Contributor
Read Millionaire Fastlane
Speedway Pass
Jul 25, 2007
6,556
1,292
381
58
Napa Valley, CA
I had a bill for service at a local hospital.

Called them when my check hadn't cleared, and the person I spoke to said her computer wasn't working right then, but I shouldn't worry about it, they'd send me a letter if it was a problem. I said that's why I was calling-- I'd gotten that letter.

She said, "It sometimes takes us a while to process payments. We'll send you another letter if we can't find the payment, OK?"

I said OK and hung up, thinking this was all I'd need to do.

(some of you are shaking your heads right now . . . you see what's coming)

About a month later, I get a nasty letter from a collection agency.

I call the agency and explain what happened. They tell me tough rocks. Pay up sucker.

I IMMEDIATELY go to the hospital accounting department, with my check book register, to show them when I cut the check to them.

After having me wait for over an hour (they didn't want to deal w/me), the gal who was listening to me basically said there was nothing she could do.

So I did what I had to-- I asked her to talk to her boss, to see how we could get this solved. I told her that I had excellent credit and didn't want something silly like this messing up my credit report.

She finally took all my info down, and made some phone calls, and took my payment.

And get this-- SHE SENT THE PAYMENT TO THE COLLECTION AGENCY!!!

So I was on record as going to collections, having not paid a bill.

I found this out of course a year or so later, when I was trying to get a re-fi.

So I called the hospital and talked to them about it, explaining the sequence of events. And they pretty much said, "Sorry bub, you're screwed."

Since getting service from my local hospital (it's the only one) is important to me, I have let this matter go.

But it still p*sses me off.

-Russ H.

PS I've mentioned this a few times to our local mortgage broker, and they say, "Yeah, we have a few clients that this has happened with. So far, none of them have had any luck getting this particular hospital to correct its errors."
 

Bilgefisher

Bronze Contributor
Read Millionaire Fastlane
Aug 29, 2007
1,849
285
73
Aurora, Co
My story is rather interesting.

I go to get a line of credit in the beginning of November. Come to find out my Transunion and Equifax scores are 720 and my Experian score is 580. I was promptly denied.

I pull up my Experian credit score. $35 for 1 month. Turns out The SSN, date of birth, 2 of the registered names, and 18 of the 21 addresses are not mine. Heck if an outsider were to look at it, they would think it wasn't even my credit report.

So I go to clear my credit report via the dispute forms. Well they use your address to verify who you are. Unfortunately my addresses weren't the latest 3. It won't let me dispute it via online.

Next I call Experian. They make an outsourced tech support company look like a customer service god. It took 8 different phone numbers before I finally got through to an operator who promptly hung up on me.

Eventually, I was able to access the dispute information and get the items cleared. It turns out when I was back in the service another sailor and my credit scores got merged. Its been downhill since then.

Btw, I still haven't gotten that line of credit. Rather frustrating. If you ever have an issue with Experian. Do not use their website phone numbers. I have found this to be the best number to use 1-866-274-5607. Just keep asking to speak to a representative and the auto-operator will put you through.
 
OP
OP
D

Diane Kennedy

Bronze Contributor
Aug 31, 2007
795
209
49
I started this thread...and then forgot about it.

I'm back now....

After you've pulled your credit reports and found the top item that is causing negative score, focus on that. BTW It's interesting how many people THINK they know what is causing a negative score, and in reality it's something else entirely.

For example, my husband recently had a late pay on a mortgage for one of our rental houses. Our error was in sending two payments to the same company for different properties in the same envelope.

He went round and round and round trying to get them to fix the double pay on one property and late pay on the other. In the end, he couldn't get it fixed and he was certain that was going to ruin his credit.

He just got a credit report and it isn't in the top 3 of things he can do to change. His top one is credit lines too close to the maximum credit amount. (Something like that) In other words, he uses his credit cards for EVERYTHING and then pays them off at the end of the month. He does that so he gets airline mileage. But, turns out it's hurting his credit score. So, he's now paying more attention and spreading out the charges between his cards - never going over 50% of the total credit limit. That can make a huge difference.

So, the point I'm making is don't assume that you know why your credit score isn't ideal - it could be something else entirely.

If you have late payments and that is a problem, you can write to the agency and ask for proof that your payment is late. I know there are some law groups that help with that and seem to do a good job. I've used one in the past to try them out and they raised my score by about 50 points by doing that.

In general though, I've found that if you have a lot of properties, you never are going to get a high FICO. It's definitely biased in favor of the W-2 wage earner who has just one home.
 
OP
OP
D

Diane Kennedy

Bronze Contributor
Aug 31, 2007
795
209
49
Interesting update. I posted about my husband spreading out his charges on his credit cards. Actually last month was the first time he did it.

We just got his new credit scores today. He score went up almost 60 points!

The issue for him was his charges, at some given point and even though he paid it off each month, was too much of a percentage of the total credit line. We keep the charges below 50% of the credit line now...and voila! Almost 60 points!
 

Allthingznew

Contributor
Aug 26, 2007
416
56
25
Interesting update. I posted about my husband spreading out his charges on his credit cards. Actually last month was the first time he did it.

We just got his new credit scores today. He score went up almost 60 points!

The issue for him was his charges, at some given point and even though he paid it off each month, was too much of a percentage of the total credit line. We keep the charges below 50% of the credit line now...and voila! Almost 60 points!
Could have to do with when the card reports and what the balance is when it gets reported. If the charges are up there v. the credit line, it could look like the card it close to being maxed out, even though it's paid in full.
 

Don't like ads? Remove them while supporting the forum. Subscribe.

OP
OP
D

Diane Kennedy

Bronze Contributor
Aug 31, 2007
795
209
49
Yep, I think you're right. And the work around is making sure you never have too high a balance so if they report right before you pay, it still is at that 50% mark.

It just seems like such a crazy, easy thing...and it can make a big difference in anything that pulls a FICO - leases, loans, even insurance.
 

BLSH

New Contributor
Jan 14, 2008
45
14
27
I am not sure if this has already been mentioned, but I wanted to throw the info out there.

Every year, depending on the State you reside, you are entitled to one Free credit report for the Mighty 3 reporting agencies. Here's the link for it:

www.annualcreditreport.com

Also, check your reports to see if there are items with original debt older than 7 years. What ends up happening is that the original debt is sold over and over again within the collections industry and most of them hit your report.

I filled out the online dispute forms stating the reason "original debt in question is older than the 7 years" and the agencies removed these filings.

This helped me, might help you too....

-BLSH
 
OP
OP
D

Diane Kennedy

Bronze Contributor
Aug 31, 2007
795
209
49
I am not sure if this has already been mentioned, but I wanted to throw the info out there.

Every year, depending on the State you reside, you are entitled to one Free credit report for the Mighty 3 reporting agencies. Here's the link for it:

www.annualcreditreport.com

Also, check your reports to see if there are items with original debt older than 7 years. What ends up happening is that the original debt is sold over and over again within the collections industry and most of them hit your report.

I filled out the online dispute forms stating the reason "original debt in question is older than the 7 years" and the agencies removed these filings.

This helped me, might help you too....

-BLSH
Thank you for the link and the great suggestion. I've never heard that before about the 7 years debt.

So, if you have a mortgage that's been running for 7+ years, you would send a dispute saying that?
 

Pinnacle

Bronze Contributor
Speedway Pass
Oct 29, 2007
467
167
80
Edmond, Oklahoma
Diane's mention of the wisdom in using less than 50% of your available credit line made me wonder something.

Who made up these stupid 6 C's of credit and all these other ridiculous rules for having a great score so all the doors don't close on you, anyway? Even people with blemishes on their reports due to no fault of their own are treated like 2nd class citizens. EVERY door is closed when you are without money and credit...every single one. That is a deeply painful lesson to learn and one I'm going to remember both in bad and especially good times. I have no problem with good credit affording you great privileges and no problem with money opening the world up to you. But as far as credit, these protocols and procedures we have to follow and ill-intent we have to look out for are outrageous. It's no wonder there are so many scam artists trying to lull the public into thinking we can screw the credit card companies and reporting agencies and such. :bgh:

Sorry about the venting, folks. This is usually not my style. It's just that once you finally do, if you can, climb the mountain to perfect credit, you have to look out for the credit gods (the very ones who made the rules you had to follow to get there) trying to chop you down again.
 

BLSH

New Contributor
Jan 14, 2008
45
14
27
Thank you for the link and the great suggestion. I've never heard that before about the 7 years debt.

So, if you have a mortgage that's been running for 7+ years, you would send a dispute saying that?
Hi Diane,

I think I may need to clarify my statement. Basically, 7 years from the day a bad debt was first reported to the bureau, the bad debt should drop off your record. I am copy pasting a more elaborate explanation I found somewhere online....


"
Information on a Credit Report


Under the Fair Credit Reporting Act information can be included in your credit reports for seven years. But there are exceptions to this rule:
  • Information about criminal convictions may be reported without any time limitation.
  • Bankruptcy information may be reported for 10 years.
  • Information reported in response to an application for a job with a salary of more than $75,000 has no time limit.
  • Information reported because of an application for more than $150,000 worth of credit or life insurance has no time limit.
  • Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer.
Here is more input:
  • The seven year statute of limitations on information listed on your credit report figures from the date of last activity.
  • According to the FCR Act Section 605 a debt can remain on a credit report for 7 years and 180 days after the delinquency that caused the account to go bad. Sometimes creditors will sell their bad accounts or post information on the credit report to show an activity date that is less than 7 years. THIS IS PROHIBITED. (I ended up having a judgement removed, the collection accounts removed, and the original creditor account removed.) In short, the time clock starts on the month the original delinquency started by the original account, regardless of whether the account has been sold to a collection agency, was paid at a later date, or a judgement was placed. The FTC has ruled this to be the law when it comes to time periods. If the credit reporting agencies are showing an account on your record that orginally went bad more than seven years ago, regardless of date of last activity, dispute the information and they will have to remove it. The reasoning behind this is similar to chapter 13 bankruptcy which stays on your credit for just 7 years instead of chapter 7. The courts have ruled if you did not file a bankruptcy and had several bad credit items they would strictly fall in under the chapter 13 guidelines. I ended up paying on debts that were less than 7 years old and had all the collections, judgements, and original creditors of more than 7 years removed. Even though the judgement was only 2 years old and unpaid and the collection account was only 3 years old, they were still bound to the time line of the original creditor. This regulation prevents accounts from staying on your credit forever.
Related Links "
Hope this helps....
Best,:tiphat:
 

yveskleinsky

Bronze Contributor
Speedway Pass
Jul 26, 2007
2,233
496
192
42
Even people with blemishes on their reports due to no fault of their own are treated like 2nd class citizens. EVERY door is closed when you are without money and credit...every single one. That is a deeply painful lesson to learn and one I'm going to remember both in bad and especially good times. I have no problem with good credit affording you great privileges and no problem with money opening the world up to you. But as far as credit, these protocols and procedures we have to follow and ill-intent we have to look out for are outrageous. It's no wonder there are so many scam artists trying to lull the public into thinking we can screw the credit card companies and reporting agencies and such. :bgh:
First off, if "people with blemishes on their reports due to no fault of their own" can generally get these items removed fairly easily (I did).

Second, "EVERY door is closed when you are without money and credit...every single one" is not true in the least. I know it feels like that- but it just means you have to think creatively. I bought my first home at 20, with no money and no credit. It can be done.
Henry Ford once said, "Whether you think you can or you can't, you're right." So true.
 

Pinnacle

Bronze Contributor
Speedway Pass
Oct 29, 2007
467
167
80
Edmond, Oklahoma
First off, if "people with blemishes on their reports due to no fault of their own" can generally get these items removed fairly easily (I did).
Are you referring to the idea of calling the bureaus and saying that you simply cannot remember a particular credit entry...therefore you do not owe that particular debt? Did you pay off a debt first and then call to have the entry removed?

Second, "EVERY door is closed when you are without money and credit...every single one" is not true in the least. I know it feels like that- but it just means you have to think creatively. I bought my first home at 20, with no money and no credit. It can be done.
Henry Ford once said, "Whether you think you can or you can't, you're right." So true.
What were the circumstances of the purchase? When you say "no credit", do you mean you had no credit history or there was no credit check involved in qualifying you? Was the purchase seller financed? Was there a deferred or waived down payment or did you get to pay in installments along with the regular monthly payments? Believe it or not, I'm extremely familiar with the no money/no credit scenario when it comes to getting a house, but what about acquiring other things?


I hear and agree with the fact that it can be done. I was unfair in making a blanket statement. But if what you say is as simple as you make it sound, I think everyone would have done it by now. I will modify my statement by saying that without money and/or credit, MOST doors ARE closed...but not all. The more one improves the situation, the more opportunities come knocking. Creativity means nothing if no one is receptive to it.
 

CactusWren

Contributor
Jan 5, 2008
449
43
25
Arizona
I just read some very good articles about this at:
http://articles.moneycentral.msn.com/Banking/YourCreditRating/YourCreditRatingDyn.aspx?cp-documentid=5945207

What I learned that I did not know is that if you are looking to get a loan you can "ping" your credit report while shopping around for the best lender as many times as you want if you do it within 45 days, and all the inquiries will only count as one. More info:
http://articles.moneycentral.msn.com/Banking/YourCreditRating/4creditScoringMyths.aspx?page=1

Thanks to Diane for mentioning the importance of debt/limit ratio. In addition, I just read that some credit companies like Capital One do not report your limit, which can adversely affect your score. More on this:
http://articles.moneycentral.msn.com/Banking/YourCreditRating/WeirdStuffThatHurtsYourCredit.aspx

Hope someone finds this useful!:)
 

Don't like ads? Remove them while supporting the forum. Subscribe.

yveskleinsky

Bronze Contributor
Speedway Pass
Jul 26, 2007
2,233
496
192
42
Are you referring to the idea of calling the bureaus and saying that you simply cannot remember a particular credit entry...therefore you do not owe that particular debt? Did you pay off a debt first and then call to have the entry removed?

If you actually owe the debt, then the blemish on your credit report is your fault. Huge difference lol! In my case, the blemish was for another person all together, so I submitted the request in writing to all 3 bureaus to have it removed- and it was within about 45 days. ...If it is your fault, it will stay on there for a max of 7 years (depending on what it is).

What were the circumstances of the purchase? When you say "no credit", do you mean you had no credit history or there was no credit check involved in qualifying you? Was the purchase seller financed? Was there a deferred or waived down payment or did you get to pay in installments along with the regular monthly payments? Believe it or not, I'm extremely familiar with the no money/no credit scenario when it comes to getting a house, but what about acquiring other things?

I had no credit, which is generally worse than bad credit! I was also making under $5/hr. I bought a home for $130k using my mom as a co-signer. I submitted a "plan" to the bank showing how I would make the payments (I had several signed year leases from friends that were going to move in with me). I made all the payments, and just "piggy backed" her good credit. Then I quit claimed her off about 12 months down the road. The house was bank financed. ...When I was working in RE in CA, everyday I dealt with people that couldn't afford the home they were buying. So they would join together as co-applicants, that way their income and credit were "pooled". I don't know to what extent lenders are allowing this- but if you have one party that will vouch for you, you are generally set.

I hear and agree with the fact that it can be done. I was unfair in making a blanket statement. But if what you say is as simple as you make it sound, I think everyone would have done it by now. I will modify my statement by saying that without money and/or credit, MOST doors ARE closed...but not all. The more one improves the situation, the more opportunities come knocking. Creativity means nothing if no one is receptive to it.
...The first step in any venture is to believe it is possible. I generally have a hard time thinking that something that seems out of my reach is possible for me- but if you can admit to yourself that it is possible in a general sense- new doors start to open, and next you realize that it is also possible for you!
 

AroundTheWorld

Be in the Moment
Speedway Pass
Jul 24, 2007
2,909
1,867
550
.
Does anyone know if the new formula for calculating scores has taken effect yet?
 

andviv

Gold Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
Summit Attendee
Speedway Pass
Jul 27, 2007
5,419
2,190
625
Washington DC
it was scheduled to start Jan 1st. I haven't check recently, but I will post when I find out (this is the topic I will be talking about at the get together).
 

venom

New Contributor
Aug 6, 2007
67
7
12
If you have a co- signer your credit isnt "pooled" . They just have another person to go after if you dont pay.
One of the key points about the information falling off after 7 yrs. These things get sold and then sold again for pennies on the dollar. I have at times wondered if I should buy one of these things then hound people. Anyway if you make any sort of payment the 7 yrs restarts. So if you get a call and you owe a grand and they say we will take 200$ and clear it off your credit... It actually can make it worse if you pay . Since that will now be on your credit for the next 7 yrs.

As to the guy that was complaining about the bad credit making things hard on him...
You reap what you sow. If you didnt pay people on time then why should I believe your going to pay the next guy ? Sorry I have had too many dirtbag tenants.
Rob
 

Bilgefisher

Bronze Contributor
Read Millionaire Fastlane
Aug 29, 2007
1,849
285
73
Aurora, Co
I just applied for my first credit card to boost my credit score. It turned my stomach doing so. You know that feeling, like you just locked your keys in your car. Ug, I hate this necessary evil. The idea of going in debt just to allowed to take on more debt still boggles me.

I think its a great thing I hate the card, it means I will be selective and sparing in its use. Gas and Groceries is all it will be used for.

Diane, thanks for the link.
 

AroundTheWorld

Be in the Moment
Speedway Pass
Jul 24, 2007
2,909
1,867
550
.
Hey Andviv,

at B and P we talked about a dispute v. a ?????? Something about sending a letter once a week?

Would you refresh my memory on this please?
 

andviv

Gold Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
Summit Attendee
Speedway Pass
Jul 27, 2007
5,419
2,190
625
Washington DC
hmmm great question, I wish I remember the exact term, but your request has implications for the bureaus. They have to demonstrate, in writing and less than 30 days of receiving it, that you are late or have not paid some balance. The strategy that many "credit repair" companies follow is to send the same request for information every week so they have to answer to your request. This causes, in many of the cases, that they drop it just to get rid of you. LegacyDad did this successfully in the past. He found about this in the credit forums. I will come back here and post it as soon as I remember the right term.
 

Create an account or login to comment

You must be a member in order to leave a comment

Create account

Create an account on our community. It's easy!

Log in

Already have an account? Log in here.


New Topics

Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Monthly conference calls with doers
Ideas needing execution, more!

Join Fastlane Insiders.

Sponsored Offers

Lex DeVille's - Advanced Freelance Udemy Courses!
-- HALLOWEEN SPECIAL STARTS TODAY! Get any of my courses at Udemy's current best price through Friday! Use code: HALLOWEEN Use any of the links...
Top Bottom