Credit question

[KillaCams]

So my credit cards are now past due, they were due on the 2nd but i had no money to pay them. Im getting paid on Friday and i just sold my Jeep.
On Friday i will be paying the cards completely off, how do you think this will affect my credit?

Recently i went to a Scion dealer to buy a daily driver and they said i don't have alot of credit history. Anyone have suggestions on how i can build my credit up?


Thanks

[Eviltwin]

Get a Transunion/Equifax credit report online (about 15-20$)

See where you're suffering, pay off or *consolidate your debt.

than you play the waiting game, while you prove to lenders/debtors that your competant in paying your bills back ontime.

A credit score over 675 should get you appoved for a car loan/lease/finance.

*Consolidating is not always the best bet, as it will reflect as a "last case resort" to lenders stating that you needed to seek a consolidation loan to clean up your lazy ass to get a loan for something else...

good lyuck!

[Turf1600]

Your credit will jump when you pay off your debts. Mine jumped to about 725 when it all got paid off - and has gone up ever since.

Try to maintain a small (less than $100) balance on each card.

[Tricked 323i]

So my credit cards are now past due, they were due on the 2nd but i had no money to pay them. Im getting paid on Friday and i just sold my Jeep.
On Friday i will be paying the cards completely off, how do you think this will affect my credit?

Recently i went to a Scion dealer to buy a daily driver and they said i don't have alot of credit history. Anyone have suggestions on how i can build my credit up?


Thanks

When I was younger I was in the same boat. Instead of paying cash, I used my cc. I made a payment every few weeks and paid the balance in full. This will give a good solid credit history. You can do a few cards if you want, just make sure you make the full payment before the payment is actually due.
Kevin

[netcsk]

no reason to pay for a credit report. www.annualcreditreport.com

Three a year from the three companies that do it. I do one every 4 months.

[scabzzzz]

The key is to have some debt but have a ratio where you make more than you owe. If you have a couple of credit cards that you've had for a while, and show good history of payments on time, then you're good. Gotta keep the balance to a minimal however. You get more credit by others giving you more opportunities. So for instance, you have 1 CC and want another. The next CC company will see another CC company has issued credit. You're in good standing, so they issue you a card. The next CC company will do the same. Keep the ratio in line and you can buy a car or house just fine. Scion dealer needs more history rather than credit. Basically you need to be older.

[VacMan]

Five Factors of Credit Scoring

There are five factors that comprise the credit score. These are listed below in order of importance,

just as an underwriter will look at the score:

• Payment History: 35% impact. Paying debt on time and in full has a positive impact. Late payments,

judgments and charge-offs have a negative impact. Missing a high payment has a more

severe impact than missing a low payment. Delinquencies that have occurred in the last two years

carry more weight than older items.

• Outstanding Credit Balances: 30% impact. The ratio marking the difference between the

outstanding balance and the available credit is important here. Ideally, the client should keep their

balances below 10% of available credit limits.

• Credit History: 15% impact. This marks the length of time since a particular credit line was established.

A seasoned borrower is stronger in this area.

• Type of Credit: 10% impact. A mix of auto loans, credit cards, and mortgages is more positive

than a concentration of debt from credit cards only.

• Inquiries: 10% impact.

This quantifies the number of inquiries that have been made on a consumer’s

credit history within a six-month period. Each hard inquiry can cost from 2 to 50 points

on a credit score, but the maximum number of inquiries that will reduce the score is 10. In other

words, 11 or more inquiries in a six-month period will have no further impact on the borrower’s

credit score.

Remember, a computer that’s not taking any personal factors into consideration calculates these

scores. When a credit report is generated, it is simply today’s snapshot of the borrower’s credit

profile. This can fluctuate dramatically within the course of a week, depending on the individual’s

own activities. The borrower should be made aware of this when they enter into the loan process,

and know that it’s not in their best interest to go out on a shopping spree. They need to make sure

they are not creating a negative impact on the score while the lender is reviewing their file.

Secondly, it is often beneficial to compile a Tri-Merge Credit Report. This combines the scores

provided by Fair-Issiac (FICO) with the score generated by TransUnion (Empirica) and the Beacon

Score produced by Equifax. The lender should be provided with this rounded profile because

these three scoring systems can vary in their results. The lender is going to look at the middle

score and throw out the other two. In many cases, this works to the borrower’s advantage.

Good Credit Translates into Lower Rates for the Consumer

In the 1960s, Fair Isaac Corporation started working on a system lenders could use to evaluate the

likelihood of receiving repayment on loans. Prior to that, it was really a matter of trusting an individual

to be a “man of his word,” so to speak. Fair Isaac sought to take human error out of the equation

with a reliable system that could determine whether or not consumers were truly worthy of credit,

and thus FICO was born. This evolved to become the standard for lenders by the 1980s.

Credit scoring has an enormous impact on a borrower’s ability to purchase a home. It can mean the

difference between getting a good interest rate and the home of their dreams, or whether they even

qualify at all. For this reason, it is important to understand the credit scoring process, and know what

your credit score is when you look to obtain mortgage financing.

What the credit scoring model seeks to quantify is how likely the consumer is to pay off their debt

without being more than 90 days late on a payment at any time in the future. Credit scores can

range between a low score of 300 and a high of 900. Most commonly, we deal with scores ranging

from 400 to 800. The higher the client’s score is, the less likely they are to default on their loan. Only

a rare one out of approximately 1300 people in the United States have a credit score of above 800.

These are the slam-dunk clients that walk away with the best interest rates. On the other hand, one

out of eight prospective home buyers are faced with the possibility that they may not qualify for the

loan they want because they have a lower score between 500 and 600. Here is a sample chart that

illustrates how an underwriter interprets the score in terms of risk, and how the interest rate is affected.

Dealing with Challenges

Typically, a person with a bad credit score is in this position because they lack structure in their life.

There are, of course, cases where unplanned health or employment complications are to blame, but

for the most part, these are individuals who lack the discipline to pay their bills on time or curb their

spending. This is your opportunity to be the “knight in shining armor” that provides them with a simple

roadmap to get back on track.

Let’s take a look at some examples that can help improve less-than-perfect credit scores on the fly for

the potential homebuyer.

Let’s say we have a borrower who needs to do a stated income loan to buy the home they want,

but they have a credit score of 664. They have a concentration of credit card debt on one card; let’s

say $17,000 on a card with a $20,000 limit. At the same time, they have four or five additional credit

cards, all with a zero balance. I would advise the borrower to distribute the debt over the cards that

are available to work with. This changes the ratio of debt to available credit, and can cause their credit

score to pierce through that magical threshold on our chart (from Part I of this series), and put them in

the 680-699 category of having good credit.

Another thing to take into consideration in a case like this is what percentage each of the five factors

measure in the resulting credit score. Let’s say we have a borrower with a credit high (the maximum

debt allowance on all cards, combined) of $20,000. They have one card that is used for business purposes

that is pushing the limit. I would advise the client to get two new cards, each with a $5,000 limit,

and once again, spread the debt out over the cards leaving a 30% margin of available credit on all the

cards. This will affect the factor of credit history, but this specific factor only affects the overall score

by 15%. The big difference once again, is the resulting impact on the credit balance factor, which has

a 30% influence on the overall score and can cause the overall calculation to pierce through the next

level on our chart.

Conversely, the borrower should be advised not to close any existing credit card accounts, even if

they are at a zero balance. Some people think they are doing themselves a favor by having fewer

cards, and they lose out on the credit history factor. Even if the borrower does not have a good rate

on an old credit card, they are rewarded for having the long-term credit history, and from time to time

they should make a small purchase to keep the account in an active status.

These are just a few examples of what borrowers can do to improve their credit score when they

consider buying a home. If they are disappointed by the fact that they cannot get the A-Paper loan

up front, I would continue to monitor rates and their specific loan scenario on an ongoing basis and

advise them when they will have a chance to turn this situation around. The new mortgage debt will

temporarily drop the score, but once the first payment registers as “paid,” the score will begin to go up

again and eventually present the opportunity to refinance at a lower rate.

How long does information remain in my credit file?

Credit Accounts

• Accounts paid as agreed remain on file for up to 10 years from the date of last activity (DLA)

• Accounts not paid as agreed remain on file for seven years from the date of last activity (DLA)

Collection Accounts

• Remain on file for seven years from the date of last activity

Public Record

•Judgments remain on file for seven years from the date filed whether satisfied (paid) or unsatisfied

• Paid tax liens remain on file for seven years from the date released (paid)

• Unpaid tax liens remain on file indefinitely

• Bankruptcy -- chapters 7, 11 and non-discharged or dismissed chapters 12 and 13 remain on file for

10 years from the date filed; discharged chapters 12 & 13 remain on file for 7 years from the date filed

[Kruzen]

So my credit cards are now past due, they were due on the 2nd but i had no money to pay them. Im getting paid on Friday and i just sold my Jeep.
On Friday i will be paying the cards completely off, how do you think this will affect my credit?

Recently i went to a Scion dealer to buy a daily driver and they said i don't have alot of credit history. Anyone have suggestions on how i can build my credit up?


Thanks

You don't have enough money to pay your credit cards, you just sold a jeep, you have an e30 and you want to buy a NEW car?

Are you fucking stupid? All credit questions aside, get your finances in order before you even think about borrowing money from anyone.

[KillaCams]

You don't have enough money to pay your credit cards, you just sold a jeep, you have an e30 and you want to buy a NEW car?

Are you fucking stupid? All credit questions aside, get your finances in order before you even think about borrowing money from anyone.

If you read carefully i said they were a few days late and will be paid out in FULL on Friday. Shit happens no one lives in a perfect world where i have money at all times. Sometimes paying rent and keeping a roof over your head has to trump making 2 credit card payments on time. (This was the first time i was late) I was just curious that since i had to pay them late this month, but they would be paid in full if it would affect my credit score badly or it wouldn't matter. This month all my finances are falling into place, 0 debt and i just got a good raise. The lesson i learned from the Jeep i just sold is that i need a reliable daily driver while i work on an E30, i opted for a Scion TC because they are reliable and good on gas and comfortable to drive.

Geez


Thanks very much to everyone else that gave some USEFUL input.

[z31maniac]

^Usually one late payment isn't going to kill you. If you the call the credit card company and explain you can usually even get any late fee's removed, again if you have always been in good standing.

I've had it happen a couple of time over the last 5-7 years where I didn't have access to a computer to make a payment or their web site was down, and they always obliged.