My credit is bad how do I get it better

[Guartho]

Some entries on the credit report are probably 10 years old or more! But I am a novice when it comes to credit, so I am not sure how to read the credit report.

It can be quite confusing. But, no legitimate debt should be on your report that is more than 7 years old. Only bankruptcy stays on for 10, and then it too is supposed to drop off. Unfortunately, collectors have sneaky little ways of illegitimately making old debts look new. Sometimes a collection agency will take over an old debt, and then report it as a new one.

Up-thread John Picard pointed you to http://www.daveramsey.com/ That's the best advice in the thread. Specifically, this page is a great outline of the program. For more details for free, go to your library and check out "Financial Peace," or "The Total Money Makeover" by the above author. Those books also have all kinds of tips and forms about dealing with collectors and your rights.

It is difficult to back track everything which is why I just simply can't pay the bills. And it is also why I don't know who I owe.

Up-thread there was a joke "There are these things called bills" You should seriously start there though. Just focus on the ones you actually have bills for. Worry about the others as they find you. You can worry about finding them once you have the ones you already have under control.

Before long you'll be like John Picard and Dave Ramsey, not caring about your credit rating because you don't use credit.

My wife and I have been on the 'Dave Ramsey' plan for just more than 3 months. We are already almost $700 a month better off than we were when we started, mostly just by living within our means and eliminating debts. By that I mean we have almost $700 a month in payments that we don't have to make anymore because we stopped growing our debt and started paying it off instead of just paying it. (all that's spelled out in baby step 2, it's called the debt snowball)

But people like Guartho can fuck the hell off.

I'm adding this to my signature.

Comparing me to a troll! That highly offends me...

Sorry dude, when larger-than-life stories happen 'round these parts, it's usually a trolling story. Don't take offense though. Some trolls are beloved for their ability to spin a yarn.

 

[CaptJimboJones]

This site may be helpful.

All of your creditors should be listed with your account numbers in the "credit history" section, so while it may take some work on your part to track them down, you should be able to get it done. Then just call them and say you want to pay off your debt, and I imagine they'll be happy to talk with you.

Also, the advice to check out Dave Ramsey is excellent. He's got the best approach to debt reduction and elimination that I've ever come across.

 

[Captain Ice]

Back with a more detailed answer.

First of all, my first post was serious. The only way that you are going to improve your credit score is to learn from your mistake. One part of this is to ensure that your payments are in the creditor's hands on time, even a little early.

I'm going to echo a few of the others and suggest that you check out the Dave Ramsey website. Go to your local library and read one or two of his books too. The man makes a lot of sense.

A few other ideas...

1. Make sure your rent is paid a few days early. Companies who manually underwrite home loans will see this and it will help you if you apply for a home loan.

2. Call whichever of the three reporting agencies you got the first report from and ask them for whatever contact information they have on these companies. The companies reported the bad debt to them and it's in their system, so they should know how to put you in contact with them.

3. Try calling the party to whom the debt was originally owed if you remember this. They may be able to tell you who the debt was sold to.

4. You have one of the reports. You need to get the other two as well, but that can waite until you get somewhat through the first. Different companies report to different reporting agencies, so not all of the agencies will have every company you owe on your report.

 

[Scout101]

Not really rocket science, though.

1. Stop borrowing money and adding debt
2. Cut back on spending
3. Pay as much as you can (more than minimums, pay more on the higher interest debts) to the people you owe.

wash, rinse, repeat, debt decreased, eventually gone, and credit fixed (if you care).

Decent emergency fixes for people that have screwed up, and the basic common sense that the folks NOT in debt are already living by.

Still think credit cards need to be separated from the conversation, though. People that have had problems with them (entirely their own fault) have an unhealthy fear of them, and equate them to the problem. I'm technically in "debt" every month, and then pay the card off IN FULL every month. Easy, no problems, don't have to carry much cash, and with the cash back rewards, get 1-2% off of every purchase. If you have any self-control, credit cards are just fine, and beneficial even. On the other hand, I only make money on mine because the irresponsible people give the CC companies extra in interest, so guess I should say thanks instead

 

[Squiggy]

How can you not know how to read a credit report? It tells you who you owe money to, how much, and when it was due. It's not hard.

Last I heard the statute of limitations for something to effect your credit was 7 years. So, in theory all you need to do is to lay low...in a cave or a ditch of some sort for seven years and emerge with blemishless credit! Suck it Experian!

 

[Captain Ice]

Still think credit cards need to be separated from the conversation, though. People that have had problems with them (entirely their own fault) have an unhealthy fear of them, and equate them to the problem. I'm technically in "debt" every month, and then pay the card off IN FULL every month. Easy, no problems, don't have to carry much cash, and with the cash back rewards, get 1-2% off of every purchase. If you have any self-control, credit cards are just fine, and beneficial even. On the other hand, I only make money on mine because the irresponsible people give the CC companies extra in interest, so guess I should say thanks instead

Maybe eventually, but you have to remember that, in this case, you're the exception to the rule. Most people who are having debt problems also owe a buttload of money to the credit card companies. Since they're already in the habit of putting everything on the card and are probably spending way more than they should on things that they don't need, wouldn't it make sense as a part of the wake-up call to cut up the cards?

After you've established the new habit of paying cash for everything, then you can get new cards if you want them. Then it should be a hell of a lot easier to get into the habit of paying the thing off each and every month. Doing this the other way doesn't remove the temptation to use them and, in some cases may prolong the process of getting out of debt.

 

[Mr. Laser Beam]

I must ask this to people who only use cash/debit cards: How do you buy stuff online? It can't be safe to use a debit card online. That's just asking for trouble. At least with a credit card, you can dispute a charge and not be out any money while you're doing it. If something goes wrong with a debit card, the money is already gone...

 

[Squiggy]

I must ask this to people who only use cash/debit cards: How do you buy stuff online? It can't be safe to use a debit card online. That's just asking for trouble. At least with a credit card, you can dispute a charge and not be out any money while you're doing it. If something goes wrong with a debit card, the money is already gone...

Don't buy stuff from shady sites. I've never had a problem with my debit card.

 

[Robert Maxwell]

I must ask this to people who only use cash/debit cards: How do you buy stuff online? It can't be safe to use a debit card online. That's just asking for trouble. At least with a credit card, you can dispute a charge and not be out any money while you're doing it. If something goes wrong with a debit card, the money is already gone...

I don't know, I use a debit card online for everything. As long as you are shopping on reputable sites there isn't a whole lot to worry about. I've been doing it for close to 10 years and have never--not once--run into an overcharge or been the victim of fraud.

You should check with your financial institution, but many debit cards are protected in the same way as credit cards these days. I am pretty sure Visa CheckCard (which is what I have) limits your liability to something like $50 in the event your card is stolen or used fraudulently.

 

[Guartho]

I must ask this to people who only use cash/debit cards: How do you buy stuff online?

With my debit card.

It can't be safe to use a debit card online.

yes actually, it can.

That's just asking for trouble. At least with a credit card, you can dispute a charge and not be out any money while you're doing it. If something goes wrong with a debit card, the money is already gone...

I will admit that I imagine it would be harder to get your bank to comply than your credit card issuing bank, but legally you are not responsible for fraudulent charges in either case. Your bank has to put your money back toot-sweet. They bank (no pun intended) on customers not knowing this.

 

[Locutus of Bored]

I must ask this to people who only use cash/debit cards: How do you buy stuff online? It can't be safe to use a debit card online.

I've never had a problem using it on reputable sites like Amazon.

 

[Mr. Laser Beam]

You should check with your financial institution, but many debit cards are protected in the same way as credit cards these days. I am pretty sure Visa CheckCard (which is what I have) limits your liability to something like $50 in the event your card is stolen or used fraudulently.

But aren't you still deprived of the money while they're investigating the charge? You may eventually get it back, but until that time, you'd be out however much the charge was. And that could drain your entire account. With a credit card, you can get it disputed *before you have to pay it*. You're not out anything.

 

[Locutus of Bored]

Easy solution; don't buy shit online when it will potentially drain your entire bank account if there's an erroneous charge. Leave plenty of leeway.

 

[Jan]

But aren't you still deprived of the money while they're investigating the charge? You may eventually get it back, but until that time, you'd be out however much the charge was. And that could drain your entire account. With a credit card, you can get it disputed *before you have to pay it*. You're not out anything.

I wasn't, at least not for long enough to notice. Two Christmases ago I found about $900 in fraudulent charges on my account and called the bank immediately. They took the information, emailed me a form (not noticeably different from a credit card dispute affidavit) and returned the money to my account less than 24 hours after I sent the form back.

Yeah, if they had decided that I was scamming them, they'd have returned the charges against my account but credit card companies have exactly the same right to do so.

Jan

 

[Mr. Laser Beam]

I sent an email to my bank asking them about this. They say they have a zero liability policy, I asked them how this applies to debit cards (i.e. do I temporarily get the money back while they're investigating). I'll see what they have to say.

Now don't get me wrong, Jan, I'm happy you got the money back so quickly, but wouldn't it be better to have used a credit card and thus you wouldn't ever have had that charge taken from your bank account in the first place?

 

[Guartho]

But aren't you still deprived of the money while they're investigating the charge?

Only if you have a shitty bank that's trying to scam you.

 

[Mr. Laser Beam]

Easy solution; don't buy shit online when it will drain your entire bank account. Leave plenty of leeway.

That's the thing about fraudulent charges though. They could be for any amount. You could buy, for example, a DVD, yet sometime later the place you bought it from gets hacked and your account is subsequently broken into and completely drained.

 

[Jan]

Now don't get me wrong, Jan, I'm happy you got the money back so quickly, but wouldn't it be better to have used a credit card and thus you wouldn't ever have had that charge taken from your bank account in the first place?

I might have if I could have but I couldn't so I didn't.

While what you say is true, it's one of those things that I just don't see makes a difference. The money was out of my account for 36 hours max and the bank assured me that they wouldn't charge any fees if I'd gotten overdrawn at that time because of them. Yeah, that it happened at Christmastime sucked a bit but the only real 'damage' was that I had to skip a turn buying dinner for my visiting brother.

There are lots of times when using a credit card instead of a debit card can make a big difference such as when buying airline tickets and the airline goes under and some buyer protections. But in the case of fraudulent charges, I believe that any reputable bank will do as mine (SunTrust, btw) did.

Jan

 

[Guartho]

Luckyflux, Here's a 6 minute clip from this morning's "Good Morning America" of the Dave Ramsey guy we've all been talking about.

 

[Luckyflux]

Wow, anyway to erase the first 2 pages?

This is the kind of stuff I needed to help start out. My current bills situation is manageable so I am not adding anymore debt. Still up to my old tricks though as it is GF's card. But I am good with dough now, no more 3 am benders for me.

Sorry again for the stir... today is a new day! (Love the sig by the way)