Credit nightmare

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Rebuildingmylife
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Credit nightmare

Post by Rebuildingmylife »

This is going to be long. Looking for any advice, and also the story is leading up to a question. From 18 to 22, I destroyed my credit. Like couldn’t get a monthly phone in my name.. not even a contract, like I already owned the phone.

I’m 25 now and over the past 2 years I have been rebuilding my credit.

I have let a lot of things drop off as it had been 6 years. But still a few things in collections which I plan to pay off in the new year.

In February of 2016 I applied for a capital one secured, I required the full $300 deposit. I came across this loan program through refresh financial around the same time. I regret the decision now, but here we are. On time payments from February to December of 2016 brought my credit score up about 100 points, nothing had dropped off my report at this point. In March of this year I applied for the capital one secured again and only required the $75 deposit which is the lowest.

In the spring of this year I realized they had not reported since December of 2016. I contacted them repeatedly and ended up having to dispute it. They changed the account to paid, without updating my on time payments for the past 7 months. My credit score went from 517 to 501. I again repeatedly contacted them and ended up disputing it. Finally, today they have got transunion to reopen the account and all my payments are there. During this battle a major credit card debt dropped off, bringing my score up to 532, then randomly it went up to 541 last week. I payed down the capital one a bit so maybe that had something to do with it.

But my issue is.. 11 months of on time payments, and loan account in good standing for almost 2 years did not move my credit score. It still sits at 541. Has anyone experienced this? Does it maybe just need some time to register? Months of paying and fighting for this is really disappointing.

Thank you, sorry for the novel.
gobsmack
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Re: Credit nightmare

Post by gobsmack »

The good news is that you are still young so you have time to recover from it. I am not sure if you will find someone who can answer your question. I was always under the impression that nobody really knows how they calculate the score. I think the rating agencies are pretty cagey about it. I understand that bad credit is something that can hurt you even when you don't need to borrow (e.g., applying for a job). However, I think if I were you, I would avoid checking the score very often. It may just add to your anxiety. If you keep paying your bills on time and stop borrowing, the score will eventually recover.
OnlyMyOpinion
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Re: Credit nightmare

Post by OnlyMyOpinion »

Welcome to FWF.
You are still young and moving in the right direction - congratulations!

You don't say how your low credit rating is actually affecting you and your daily living today. Are you still not able to get a phone account?

All I seem to read on financial forums these days is this short-term focus on credit score. Sorry but I don't understand why it matters so much.

Continue to pay off your debts as you have been for the last 2 years, continue to live within your means, and continue to save a % of your income.
Your credit score will eventually 'catch up' and at that time you will also realistically have the capacity to consider borrowing, opening new accounts, etc. Until then, you are 'in the penalty box' and shouldn't care what your score is IMO. You aren't in a position yet where it is safe to be back on the ice anyway.
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Zipper
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Re: Credit nightmare

Post by Zipper »

Equifax Credit Score 845.

Age 74
Never ever missed a payment or gone delinquent on anything........ever.
Always paid credit cards in full each month. No interest charges.
Same house and address for 34 years. No mortgage. No debts.
Married, same wife, 49 years.
Retired 20 years.

Waiting 6 years and letting things "drop off" is just plain stupid.
What did you expect would happen to your score?

You need to take control and slowly pay off everything you owe.
And never miss a minimum payment again.
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AltaRed
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Re: Credit nightmare

Post by AltaRed »

OnlyMyOpinion wrote: 01 Dec 2017 14:43 Continue to pay off your debts as you have been for the last 2 years, continue to live within your means, and continue to save a % of your income.
Your credit score will eventually 'catch up' and at that time you will also realistically have the capacity to consider borrowing, opening new accounts, etc. Until then, you are 'in the penalty box' and shouldn't care what your score is IMO. You aren't in a position yet where it is safe to be back on the ice anyway.
:thumbsup: Agree completely. It takes awhile for the needle to move and it takes time to get out of the penalty box. It really is as it should be. The OP needs to simply focus on getting his/her finances in order, continuing to pay down debt methodically and without exception. Don't take on any new debt such as an auto loan. Never miss a payment. Check your score again a year from now, and then a year after that, and then a year after that.
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kcowan
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Re: Credit nightmare

Post by kcowan »

I think this obsession with credit score is misdirected. What is the everyday impact between 850 and 650?
Until someone can articulate the every day impacts, what difference does it make? I think it is the transactions that lead to the score and not the score itself?
For the fun of it...Keith
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AltaRed
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Re: Credit nightmare

Post by AltaRed »

Scores matter at some level. Per Equifax:

Code: Select all

300-560	Poor		4% of Canadians
560-660	Fair		10%
660-725	Good		15%
725-760	Very Good	14%
760-900	Excellent	57%
There is no difference within categories, but consumer loan borrowing rates, and potentially getting credit with a utility/telecom or rental lease could likely matter below 660 (or 700).
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patriot1
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Re: Credit nightmare

Post by patriot1 »

AltaRed wrote: 02 Dec 2017 12:03potentially getting credit with a utility/telecom
When I moved to my current city, the power company gave me a choice of paying $20 for a credit check or giving them a deposit. I gave them the deposit, which I got better interest on than my bank account, and they credited the deposit against my account after a year or so.

I have never asked for my credit rating but I assume it's pretty good as I've never had a problem getting a margin account or credit cards.
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Zipper
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Re: Credit nightmare

Post by Zipper »

Equifax tells me.

Your loan risk rating.

Your Credit Score of 845 is better than 98% of Canadian consumers.

To the OP, the Zippers aren't wealthy and have always been middle class.
But we always paid on time and never ever defaulted on anything.
You need to honour your obligations for the rest of your life.
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