Improving my credit rating

[cassique]

My credit is in dire need of repair . . . and my new year's resolution is to fix it, as I would like to purchase a house sometime in my life.

Now, I don't have much credit card debt. There is one card that is over the limit but has been apparently closed out. I am on a payment plan so I am no longer being charged over the limit fees, and it should be completely paid off by April. I have a lot of student loan debt, but those accounts are currently in deferment due to inability to pay the minimum with my current job situation. I have a couple of collection agencies, but the charges are minimum so I am planing to pay one off with my next paycheck (it is under $50) and the other is just a little over ($100). I have a plenty of dings for late payments, but they are all over a year old (except for the credit card I have mentioned above which has been paid as agreed since September). All in all, I didn't think I was too bad off. I knew I wasn't good, but I didn't think I would be denied a small line of credit--which I was.

I ordered my report from equifax and found that I had a bunch of old department store credit cards that had not been used since the late 90's, which were still opened with a $0 balance and a $0 line of credit. I wonder if this was hurting me, so I called the companies to close them out, and disputed the ones I couldn't reach with the reporting agency. I still haven't heard back. I had one CO from early this decade, for less than $200. And I also have a line of credit open with a very high limit. This credit card has never carried a balance. My parents put the card in my name when I was buying a car, and they never closed it.

So, after the department store cards are closed out, my active credit shows my very large student loan balance, and this very large line of credit. My closed accounts all have some sort of negative activity associated with them, all for small amounts of money. The report says 5 negative accounts and 1 collections (I am guessing that is the one that is close to $200 and not the $40 one).

So my question is, is it wise to keep the line of credit that my parents opened for me, open? I read mixed answers on this. One reason why I think it is good to keep it open is because it has been opened for nearly 10 years now and shows longevity, plus without it than my only active line of credit is my maxed-out student loans, so this helps my credit to balance ratio. But, I also read that because of my low credit score, some creditors might see this very large line of credit as risky for someone with my history, and they might be less likely to extend more credit to me, since I seem unstable in my habits. Or would it be better to keep the credit open, but have my parents reduce the limit to $5000.

What do you think will be my best course of action?

Also, I noticed that my credit report did not show any job history for me. Is this normal? I have worked since I was 14, but the past few years, after having children, I have worked on and off.

[VeVe]

I will just advise that you don't do ANYTHING else until you spend more time reading this site.

Specifically: Don't pay the collections and don't close accounts. Both of those things are going to have a negative impact on your score.

Read more here and then decide on how to proceed.

[cassique]

Why not pay collections? I thought that it was good to pay them off.

[2001Badyear]

No, VeVe is correct, in nearly every case that is the last thing you want to do, at least initially. There are very specific step that should be follwed and in the exact right order for your situation.

Collection agencies will tell you anything to get you to pay and may not even legally be allowed to collect, despite what they may tell you.

Read up on these boards and do searches for specifics. Everything you may need to know has been covered many times here. Read the stickies up on the top of the pages where there is LOTS of good information.

Then when you still have questions specific to your case ask here.

Employer name is generally all you will see. Not an important factor and has no influence on your score.

[hasas13]

Cassique,

You are not only that started like this. Regroup, read, ask, learn and do not close any account. We are all here to learn. There are others that are very good at this which we also learn from.

[cassique]

Ok, I started reading the stickies and my head is buzzing. It is going to take a while to process all of this new lingo and legal jargon.

But I do have a question. If you already partially paid a collector (My $40 balance is listed as originally being $70 so I must have made a payment to the CA at some point) do I still have a right to dispute the remaining $40, or does a partial payment validate the debt?

[momof5]

Just because it said original balance $70 new balance $40 does NOT mean you made a payment.... I have one medical collection that shows $1200 original - $789 due...because I disputed it and they said they would give me a discount but would not PFD. So there it sits.

My BF has a charter account....original $398 due $98... because when they turned it to the CA, they accused him of not returning the equipment (that is why you get a receipt). After proving that they got their equipment back, they reduced the CA amount. Whatever.

Paying a collection only hurts your score. That is why we PFD or nothing around here (unless it is large and a creditor that loves to sue - but that is another topic).