ABD74

How do I rebuild? Feeling anxious... worried- rock bottom?

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OMG !!  Where are you getting this information ?  Go to openskycc.com and you can clearly see what their interest rates are under rates and disclosures.  You can CLEARLY see their rates are NOT 297% as you stated.

 

Also, if you are repairing or rebuilding credit you want to pay in full EVERY month when the bill arrives.  That will not only improve your scores BUT you will NOT have any interest charges at all.

 

1.  EVERY book out on credit repair explains how having a secured card,( if not eligible for an unsecured card ) will improve your scores including FICO    

 

2.  Opening up a checking or savings account and using a debit card as "plastic" will NEVER EVER help with credit repair or rebuilding.

 

3.   It takes 10 weeks MAXIMUM to get your deposit back if you decide to close your secured card. 

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I stand rebuked...its Western Sky that charges high interest rates:

 

http://www.dailyfinance.com/on/western-sky-predatory-loan-new-york-lawsuit/

 

...sorry, I got the scams mixed up.

 

However:

 

1. Every book that claims secured cards improve FICO scores is wrong.  The only reason FICO scores go up is because the consumer with a secured card doesn't do all the things that make FICO drop.

 

2. Using your debit card helps with rebuilding FICO because a consumer using a debit card doesn't do all the things that make FICO drop.

 

3.  Agreed. 10 weeks.

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I stand rebuked...its Western Sky that charges high interest rates:

 

http://www.dailyfinance.com/on/western-sky-predatory-loan-new-york-lawsuit/

 

...sorry, I got the scams mixed up.

 

However:

 

1. Every book that claims secured cards improve FICO scores is wrong.  The only reason FICO scores go up is because the consumer with a secured card doesn't do all the things that make FICO drop.

 

2. Using your debit card helps with rebuilding FICO because a consumer using a debit card doesn't do all the things that make FICO drop.

 

3.  Agreed. 10 weeks.

 

Now I'm confused. :) I've always had a checking and savings account. I actually have 2 checking accounts! One for myself and one with me and my significant other. Both have savings account tied to them, and I utilize debit cards for both accounts. (This is with Bofa.. which is why I'm thinkning bofa could hopefully be lenient with me regarding getting a secured credit card). How does using a debit card help rebuild with FICO? I know it definitely doesn't help with credit scores because that's all I use, really- debit cards- and as you know, my scores are horrible!  I appreciate any insight on this topic because I had no idea! I'm grateful for any helpful knowledge!

 

I am not eligible for an unsecured card- and I'm not eligible for a lot of things such as renting an apt, applying for a car loan, etc. What I'm really aiming for is to be able to raise my credit scores so I can breathe a little easier. And so I don't have to rely on my siginificant other to co-sign for me if we're renting a home or anything like that. From my original post, you can see that I don't have any revolving credit on my credit reports. And the there are only 2 things on my credit report- my education loan and those Finex accounts. I believe I need some sort of revolving credit to at least bring my scores up a little. But because I don't qualify for any, I feel like the only thing I can do is apply for a secured card.

 

I'd also like advice on something, if you don't mind. My scores are in the below 500's. Is this because of the Finex accounts? Or the delinquincies on my education loan? I can't seem to remove the delinquincies on the education loan or the Finex accounts (until they get dropped off or something miraculous happens)... so without a secured card, I'm pretty much stuck on how to improve my credit life.

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Lots of questions...so, in no particular order...

 

1.  First, are you looking at actual FICO scores from myFICO.com?  Everything else is bogus...

 

2.  Having a debit card in and of itself does not help with FICO scores...but, it keeps you from doing things (like getting a secured card) that would damage your scores.

 

3.  There are actually many different FICO scoring models.  The one we're allowed to see is closest to the FICO Bank Card score (the "sucker score") that predicts who CCs will make money on.  Contrary to popular belief...the sweet spot is in the mid 600's.

 

4.  The student loans (assuming they're current) don't hurt or help much.  That FINEX thing hurts some of the FICO models more than others (i.e., hurts "new car" score...doesn't hurt sucker score much).

 

5.  Do you bank online with BofA?  Is you pay direct deposited?  Check out their online offers.

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If you have a savings account, see if you can get a loan against that savings account AND that payments on the loan will be reported to the CRAs.

 

Let's assume that you take a $1000, one year loan against your savings.

 

The interest is 10% and you pay $100 a month. You will be paying the interest to yourself, but it will be offset by the interest you won't be earning on the money while you carry the loan.

 

At $100/month payment of the loan, you'll pay yourself about $100 interest, and the loan will be paid off in about 11 months. 

 

You'll then have nearly a year's worth of loan payments on your credit record. 

 

What is REALLY hurting you is that you basically have no credit record, and the teensy one you have is negative: a payment agreement when an account is already past due doesn't help at all, until you have at least a year of on-time payments.

 

Borrow that money from yourself. Get a secured card if you can, but never never never let it go even 5 minutes late. If your SO has good credit, and you both trust you with this, see if you can get your name on one of their credit cards. One of the things that has helped me is that I am on my husband's AMEX card, and we both use it to get airline miles. AND we pay it off, monthly.

 

As your rating rises, you will be eligible for more and better loans, that, IF you deal with them responsibly, you can use to get even a better rating.

 

Two years ago, my highest credit rating was just over 500. Now, the lowest is 629. It takes time, but it's doable.

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Lots of questions...so, in no particular order...

 

1.  First, are you looking at actual FICO scores from myFICO.com?  Everything else is bogus...

 

2.  Having a debit card in and of itself does not help with FICO scores...but, it keeps you from doing things (like getting a secured card) that would damage your scores.

 

3.  There are actually many different FICO scoring models.  The one we're allowed to see is closest to the FICO Bank Card score (the "sucker score") that predicts who CCs will make money on.  Contrary to popular belief...the sweet spot is in the mid 600's.

 

4.  The student loans (assuming they're current) don't hurt or help much.  That FINEX thing hurts some of the FICO models more than others (i.e., hurts "new car" score...doesn't hurt sucker score much).

 

5.  Do you bank online with BofA?  Is you pay direct deposited?  Check out their online offers.

 

1.) I was looking at scores from Equifax, Experian, and Transunion- all separate

 

2.) Do secured cards really hurt FICO scores? Even the ones that don't report as secured?

 

3.) Yes, I bank online with BofA and it's direct deposited to both checking accounts- my own and my significant other's. I was eyeing their cash rewards secured card online.

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If you have a savings account, see if you can get a loan against that savings account AND that payments on the loan will be reported to the CRAs.

 

Let's assume that you take a $1000, one year loan against your savings.

 

The interest is 10% and you pay $100 a month. You will be paying the interest to yourself, but it will be offset by the interest you won't be earning on the money while you carry the loan.

 

At $100/month payment of the loan, you'll pay yourself about $100 interest, and the loan will be paid off in about 11 months. 

 

You'll then have nearly a year's worth of loan payments on your credit record. 

 

What is REALLY hurting you is that you basically have no credit record, and the teensy one you have is negative: a payment agreement when an account is already past due doesn't help at all, until you have at least a year of on-time payments.

 

Borrow that money from yourself. Get a secured card if you can, but never never never let it go even 5 minutes late. If your SO has good credit, and you both trust you with this, see if you can get your name on one of their credit cards. One of the things that has helped me is that I am on my husband's AMEX card, and we both use it to get airline miles. AND we pay it off, monthly.

 

As your rating rises, you will be eligible for more and better loans, that, IF you deal with them responsibly, you can use to get even a better rating.

 

Two years ago, my highest credit rating was just over 500. Now, the lowest is 629. It takes time, but it's doable.

 

Thank you for your response!

 I read about how installment loans opened against your savings account can help with credit. How easy is it to do? Would Bofa be able to help me with something like that or is that a type of thing (due to my credit scores) I'd have to contact a credit union for? (I am not part of a credit union, but my work is affiliated with one).

 

As we speak, my significant other is adding me as an authorized user on his bank of america unsecured credit card. I always thought about being an authorized user, but wasn't sure if my credit would get checked or if being an authorized user would hurt in any way. This card is used VERY responsibly, low utilization and paid monthly on a timely basis.

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I'm sorry...I'm really not trying to rain on your parade...but there are so many "yeah, buts" associated with credit reporting that you need to understand.

 

FICO caught on to the authorized user gambit a few years ago.  They originally adjusted their algorithms to ignore AUs.  They then took a bunch of flak for ignoring legitimate entries and they modified their policy again.

 

Nowdays, being an AU only counts if FICO has information that says you're a spouse, child, or other household member of the primary card holder.  So...YMMV.

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I'm sorry...I'm really not trying to rain on your parade...but there are so many "yeah, buts" associated with credit reporting that you need to understand.

 

FICO caught on to the authorized user gambit a few years ago.  They originally adjusted their algorithms to ignore AUs.  They then took a bunch of flak for ignoring legitimate entries and they modified their policy again.

 

Nowdays, being an AU only counts if FICO has information that says you're a spouse, child, or other household member of the primary card holder.  So...YMMV.

 

 

If you have a savings account, see if you can get a loan against that savings account AND that payments on the loan will be reported to the CRAs.

 

Let's assume that you take a $1000, one year loan against your savings.

 

The interest is 10% and you pay $100 a month. You will be paying the interest to yourself, but it will be offset by the interest you won't be earning on the money while you carry the loan.

 

At $100/month payment of the loan, you'll pay yourself about $100 interest, and the loan will be paid off in about 11 months. 

 

You'll then have nearly a year's worth of loan payments on your credit record. 

 

What is REALLY hurting you is that you basically have no credit record, and the teensy one you have is negative: a payment agreement when an account is already past due doesn't help at all, until you have at least a year of on-time payments.

 

Borrow that money from yourself. Get a secured card if you can, but never never never let it go even 5 minutes late. If your SO has good credit, and you both trust you with this, see if you can get your name on one of their credit cards. One of the things that has helped me is that I am on my husband's AMEX card, and we both use it to get airline miles. AND we pay it off, monthly.

 

As your rating rises, you will be eligible for more and better loans, that, IF you deal with them responsibly, you can use to get even a better rating.

 

Two years ago, my highest credit rating was just over 500. Now, the lowest is 629. It takes time, but it's doable.

 

Thank you for your responses!

I have another problem that just arose this morning! You all have been so knowledgeable so I'm hoping you can help me. Yesterday I received a collection notice from Jefferson Capital for a really old credit card that I had a loooong time ago. It fell off my credit report, and it's been a REALLY long time since I've seen anything about it- years! So yesterday I received a collection notice asking me to settle the debt or pay it off! I'm not quite sure what to do here. Do you think they got a hold of my address because I've been recently looking up credit reports actively?

Also, do I go through the whole process- request debt validation, etc- when it's not even showing up on my credit report?

 

Now, i'm pretty scared! ANy help would be appreciated!

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Nothing to be afraid of.  Yes...its possible a junk debt buyer was alerted by a CRA that you're looking at your reports.  Happens all the time.

 

Exactly how old is the debt?  I believe California has a 4yr SOL...that means if they sue you and you go to court and raise the SOL as a defense and the judge agrees, they don't get a judgment.

 

But, I would respond with a DV letter. 

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Thank you for your responses!

I have another problem that just arose this morning! You all have been so knowledgeable so I'm hoping you can help me. Yesterday I received a collection notice from Jefferson Capital for a really old credit card that I had a loooong time ago. It fell off my credit report, and it's been a REALLY long time since I've seen anything about it- years! So yesterday I received a collection notice asking me to settle the debt or pay it off! I'm not quite sure what to do here. Do you think they got a hold of my address because I've been recently looking up credit reports actively?

Also, do I go through the whole process- request debt validation, etc- when it's not even showing up on my credit report?

 

Now, i'm pretty scared! ANy help would be appreciated!

 

Don't be scared.  Jefferson will fold if you challenge them in anyway.  Simply DV them.  They are hoping you don't know about SOL, reporting, or any other credit management and will pay them some money.  

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Nothing to be afraid of.  Yes...its possible a junk debt buyer was alerted by a CRA that you're looking at your reports.  Happens all the time.

 

Exactly how old is the debt?  I believe California has a 4yr SOL...that means if they sue you and you go to court and raise the SOL as a defense and the judge agrees, they don't get a judgment.

 

But, I would respond with a DV letter. 

It's at least 8 years old.

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