Credit score is very low. Need to improve it.

[Krynj]

So when I was 18, I failed to realize or understand just how important it would be to have a good credit score later on in life. And now, I'm paying for it. While I was in college, I wasn't working enough to pay some of the bills I had, so, there are a few things that went to different collections agencies. I kept telling myself that I'd take care of it once I'm done school and have a decent paying job. Now that time has come and I want to get it taken care of ASAP. I looked at my credit report on www.freecreditreport.com, and I was happy to see that I only had about $1,200 in delinquent bills that needed to be paid off. I thought it was going to be a lot more than that, so $1,200 is definitely a manageable balance. That, and the fact that there's little to no history on my credit report of me actually consistently paying any bills. I mean, I pay rent, cellphone, and utilities each month, but none of them are in my name. That will soon change though, since my girlfriend and I have just moved, and the electricity and internet are now in my name, and that will help establish some payment history.

My credit score is quite low, and I when I say low, I mean about 520 or so, which makes it impossible to get a car from any real dealership. There are of course those dealerships that don't do any sort of credit check, but then you pay 18% interest on a car. No thanks. Not that I need to buy a new car right now anyway, but, the car I have now is a '95 Saturn with 198k miles on it. It runs OK now, but, it might need a few repairs in November when its inspection expires, and who knows what that will cost (luckily my dad does all my repairs, I just have to pay for parts). So even though I don't need a new car right now, I have a feeling I will before too much longer. And during that time I'd like to improve my credit score, making it possible for me to get a new car when the Saturn dies.

So what's the best way to dig myself out of this hole? I don't have all the bills and papers that are mailed to me by collections agencies. During college I was moving a lot, and never bothered to change my mailing address, so all the old bills I had were mailed to my parents' house, and by now they've been packed away, thrown out, or simply lost. How much do those debt consolidation companies help out? Will they be able to track down which collections agencies I owe money to?

I just pretty much need to know where to start fixing this. Any advice/help at all would be greatly appreciated.

And let this be a lesson to anybody that thinks that leaving bills unpaid is OK. Don't be careless and irresponsible with your credit, because you will pay for it eventually.

Many thanks in advance.

 

[spidey07]

go to creditboards.com.

It's going to take a while to get it in shape. Glad you learned you lesson to never be late on any bill, let alone let it go 3-4 months and get turned over to collections - that's what really killed you.

 

[Beev]

Debt consolidation places are actually damn near useless and could cost you MORE money in the long run. I couldn't say if there are any alternatives, but don't use one of them.

 

[Krynj]

Yup. Definitely learned it the hard way.

I'll head over to that site now and check it out. Thanks.

 

[dullard]

Originally posted by: FetusCakeMix
Now that time has come and I want to get it taken care of ASAP.

"Credit repair" and "ASAP" don't belong in the same paragraph. Your credit score is a measure of trust. It measures how much companies trust you to repay money that you owe them. Trust is always slow to rebuild. Suppose your GF started to cheat and repeatedly cheated on you. How long would it take for her to regain your trust if she started behaving better?

You can improve your score a bit by removing incorrect entries on your credit report and by paying off debts (good and bad). But, the most improvement will come through patience. You'll need to prove (repeatedly) that you can owe companies money and pay it back on time. That takes time. Getting bills (especially anything credit related) in your name will help but you really can't speed things up. You can only slow things down (by ignoring the problems) you can't make it go any faster.

 

[Krynj]

Yeah, I know it takes time. I want to get the ball rolling now, so I can start getting it taken care of.

Just pulled a credit report, and got the names of collections agencies I owe to, along with account information. Time to start making some calls and giving them my new address.

 

[LTC8K6]

I looked at my credit report on www.freecreditreport.com

Why did you go to those scammers?

 

[eplebnista]

Originally posted by: LTC8K6

I looked at my credit report on www.freecreditreport.com

Why did you go to those scammers?

Behold the power of advertising.

 

[her209]

How old is the debt?

 

[kranky]

Originally posted by: spidey07
go to creditboards.com.

It's going to take a while to get it in shape. Glad you learned you lesson to never be late on any bill, let alone let it go 3-4 months and get turned over to collections - that's what really killed you.

And when you go to creditboards.com credit forum, please read thoroughly. There is a lot of information there, but I see a lot of people who skim a little and then start doing things they should not do because they didn't study the material in depth.

It will take some time, but you will be able to fix it. I can tell you this much, you don't need a debt consolidation company. You can do this yourself. Creditboards members are very helpful if they see you have tried to do your homework.

 

[mshan]

Digging around the message boards of Carmen Wong Ulrich's CNBC show "On the Money" may be a good place to start: http://www.cnbc.com/id/25392073/

 

[mcvickj]

Originally posted by: Beev
Debt consolidation places are actually damn near useless and could cost you MORE money in the long run. I couldn't say if there are any alternatives, but don't use one of them.

Agreed. I was also a bit foolish in my youth and was regretting it later on down the road. My second regret was going to one of those consolidation places without asking advice from any family or friends. It wasn't worth it.

 

[KentState]

Originally posted by: LTC8K6

I looked at my credit report on www.freecreditreport.com

Why did you go to those scammers?

How are they scammers? It's a site run by the actual credit reporting company Experian. They give a nice disclaimer that everyone is entitled to a free report from each of the three reporting companies each year.

 

[PhaZe]

"That will soon change though, since my girlfriend and I have just moved, and the electricity and internet are now in my name, and that will help establish some payment history. "

That won't improve your credit. Utility companies (AFAIK), don't report anything to any bureau unless you STOP paying them. Like if you get a huge light bill and you decide you don't want to pay it, they will attempt to collect from you and if they don't succeed, you go to collections.


PS. Freecreditreport.com is ok by me but the people who say it's a scam say that because "you are paying for something that is free"

 

[alrocky]

Originally posted by: FetusCakeMix
Time to start making some calls and giving them my new address.

Slow down, Sparky, you may wish to hold off on that for now.

 

[bobdole369]

I looked at my credit report on www.freecreditreport.com

No you didn't. You viewed a "triple report" or 3-in-1 report from a place that charges $hundreds to you in the long run. Expect a massive bill from freecreditreport.com within the next 30 days. You are enrolled in "tripleadvantage" a totally useless credit "monitoring" service that they will charge you a lump sum after 30 days. Thats why you gave them your credit card number right? www.annualcreditreport.com is the site to get your free yearly reports from the big-3. DO it now. Request paper copies to be sure.

and I was happy to see that I only had about $1,200 in delinquent bills that needed to be paid off.

Deadbeat. I mean that in the friendliest of ways - sort of a welcome to the club sort of gesture.

I mean, I pay rent, cellphone, and utilities each month, but none of them are in my name.

And even if they WERE in your name, none of them matter in the credit game, until you go late for 30 days. You can pay your rent on time for 45 years, and never get anything positive out of it, go late once, and get an eviction filed - wham, 50 point drop in score and can never rent anywhere. It's just the "filing" that matters too - even if you win and aren't evicted you are still scarred.

That will soon change though, since my girlfriend and I have just moved, and the electricity and internet are now in my name, and that will help establish some payment history.

Nope. No it won't.

My credit score is quite low, and I when I say low, I mean about 520 or so

I was in the 400 club when I started.

There are of course those dealerships that don't do any sort of credit check, but then you pay 18% interest on a car.
No thanks. Not that I need to buy a new car right now anyway

For reference - my wife - who scored 593/603/571 (eq/tu/ex) - managed 17.99% on $8k (after a $2000 down payment) The dealership pulled credit 14 times to get this. Only one slightly better interest rate, but was a 6 year loan, payment was a bit lower. Decided against it for an already 5 year old car.

So what's the best way to dig myself out of this hole?

I don't have all the bills and papers that are mailed to me by collections agencies.

This isn't perhaps the best forum for these kind of discussions. creditboard is nice, so is www.infinitecredit.com. Basically to start you are going to dispute each and every item counting against you - this checks to see that the company reporting is on the ball and (still in business), so you aren't mailing checks to abandoned office buildings. Once they verify, you know they can find your info - so you go based on what is on your paper reports. Each account will give you an address, you start your dispute letters first with the credit bureaus (all 3), then once you can't beat on em anymore you move to each CA and work on em that way.

How much do those debt consolidation companies help out?
Will they be able to track down which collections agencies I owe money to?

They don't. Stay FAR from debt consolidation loans. They hurt your score remarkably worse than if you had just let the debt ride.

As an aside - just note that there is NO incentive for a consumer to pay off old bad debt. It actually hurts your score to pay most things that are older than about 3 years. See an old bad debt might reduce your score by 5 points, but if you pay it, it becomes new bad debt, which might reduce your score by 15.... Paid collections are still collections, and new paid collections hurt worse than old unpaid collections. Now if you are buying a house, you may not be able to have anything bad there and be forced to pay it. Thats about the only time I would consider paying off really old bad debt.

 

[bobdole369]

WOAH no no no......

Time to start making some calls and giving them my new address.

PUT DOWN THE PHONE NOW

Stop.

RIGHT NOW.

stop it. Don't EVER talk on the phone.

 

[bobdole369]

How are they scammers? It's a site run by the actual credit reporting company Experian. They give a nice disclaimer that everyone is entitled to a free report from each of the three reporting companies each year.

freecreditreport.com - despite the jingles, and being run by experian are NOT good people. They sell you a product called "triple advantage" for god only knows how much, and throw in a "free credit report". Which is a useless 3-in-1.

The only thing free is the sucking sound as your credit card is charged something like $179 on day 31 of your "trial". You already gave them a credit card number, remember? They spend hours trying to keep you from cancelling too.

And even after you cancel, you might get charged anyways.

 

[blinblue]

Buy another (slightly better) used car with cash and wait until you get some more $ before getting a new car?

 

[bobdole369]

And an FYI to all ATOTers.

www.annualcreditreport.com is the site run by the government set up to give you your "free report from each of the three reporting companies each year"

Not only are you entitled to 1 freebie per year (which you don't even have to use that website to receive BTW) - you are also entitled to a freebie everytime you are "unemployed", or experience "adverse action based on information from that bureau".



Hint: The credit bureaus have no way of checking whether you are employed - so unless you are writing every week for a free one due to "unemployment" - you can pull it off easily 6 times a year.

Also they have no detailed log of what action is taken by a creditor based on info from that bureau, so you can cite any creditor reporting to that bureau. The adverse action could have been something like an interest rate or terms change that the bureau would never ever see.

 

[KentState]

Originally posted by: bobdole369

How are they scammers? It's a site run by the actual credit reporting company Experian. They give a nice disclaimer that everyone is entitled to a free report from each of the three reporting companies each year.

freecreditreport.com - despite the jingles, and being run by experian are NOT good people. They sell you a product called "triple advantage" for god only knows how much, and throw in a "free credit report". Which is a useless 3-in-1.

The only thing free is the sucking sound as your credit card is charged something like $179 on day 31 of your "trial". You already gave them a credit card number, remember? They spend hours trying to keep you from cancelling too.

And even after you cancel, you might get charged anyways.

Never happened to my gf or I when we signed up. We both have been using the service for over a year and nothing like that has been charged to either of our cards. Yes, you pay a small monthly fee, but being able to get your score and report at any time is nice when trying to improve things. Maybe people that sign up agree to additional services?

 

[bobdole369]

Time to start making some calls and giving them my new address.

Thats easily the worst thing you can do.

You WANT to establish that "this time" is the first communication you have received from them. That sparks the need for certain items they give to you - they must state they are a debt collector, yada, yada. If they fail to do that - you can sue them for $1000 a violation.

This is how most "credit repair" is done - to nail the CA's on a technicality, and sue them for fucking it up. It costs them too much money to defend so they sell off the debt, or drop it.

 

[bobdole369]

We both have been using the service for over a year and nothing like that has been charged to either of our cards.

Actually I think it might have been back in the day they would charge the entire year up front. So you actually pay $180/year x 2 for something you can get for free? The bureaus already provide a mechanism to contact if any item changes on your report, so if its fraud protection you are after there are much better ways! Just trying to help and understand. THe report provided is terrible compared to a paper copy. Have you ever seen the difference? For me it was remarkable. I won't even see my report online anymore, the paper ones are just so much more thorough. And the real ones straight from the bureaus are a lot better than what freecreditreport.com provides (Fairly sure its still a 3in1).

 

[SuperSix]

I filed bankruptcy ~4 years ago after my now ex-wife drove us into it. I dug us out the first two times, not this time. Divorced her.

That being said - over the next 4 years, I got 2 credut cards wth modest 2500 balances. Used them both monthly and paid them off each month.

My middle score os now 698, and I just closed on a new house last Monday.

Mostly because I have nearly zero debt-to-income. BUT, the lesson here is that it will take time, and you don't need to get an auto loan toimprove your credit.

 

[KentState]

Originally posted by: bobdole369

We both have been using the service for over a year and nothing like that has been charged to either of our cards.

Actually I think it might have been back in the day they would charge the entire year up front. So you actually pay $180/year x 2 for something you can get for free? The bureaus already provide a mechanism to contact if any item changes on your report, so if its fraud protection you are after there are much better ways! Just trying to help and understand. THe report provided is terrible compared to a paper copy. Have you ever seen the difference? For me it was remarkable. I won't even see my report online anymore, the paper ones are just so much more thorough. And the real ones straight from the bureaus are a lot better than what freecreditreport.com provides (Fairly sure its still a 3in1).

I actually called and said the price was too much per month and they greatly reduced it down. We are both paying around $60/year to get the reports and scores at any time. I have seen the paper reports and used them when getting a home loan, but the difference is not worth it for me. Are you saying that back when you used the online version, it used to combine everything into one report? The current process is three individual reports laid out much like the paper ones.

I do agree with your overall sentiment. If you go in eyes-wide shut, then you can be charge a lot more per month that anticipated.