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FWF has long been flooded with questions about how to increase credit scores. The purpose of this thread is to offer a central location for general explanations and guidelines about credit scores, how to improve them, and how to keep them high. Along the lines of the LARGE credit lines thread, I will try to keep this post restricted to more or less verified factual info, and add my own more subjective suggestions/strategies in the post following this OP.

This is a draft, and needs further revision. Please treat the thread as such for the time being. Please also add your comments and suggestions, and I will do my best to keep the OP current. I would also appreciate links to the best CURRENT sources which confirm (or refute!) points made in this thread, for inclusion in the OP. Thank you!!

EDIT: PLEASE AVOID SENDING PMS OR EMAILS ABOUT "WHAT IS THE BEST PLAN OF ACTION FOR ME". I (and perhaps others?) have received many of these since this thread was posted. Even if I could answer those questions for you--and without knowing the DETAILS of your situation, I really couldn't--I simply don't have the time to provide detailed counseling for free. On the other hand, I will happily try to address, brief, questions that might be applicable to many other FW members. Thanks for understanding!


This post quickly grew so long that I decided to divide it into sections. I'm very open to suggestions on how to make the structure clearer or less cumbersome. While it may be overkill, I'm hoping a TOC will help:


TABLE OF CONTENTS

I. WHY SHOULD I CARE ABOUT MY CREDIT SCORE?
A. The Importance of "Adequate" Credit Scores
B. "Adequate" vs. "Super" Credit Scores
C. Why would a "Super" credit score be helpful?

II. GENERAL FEATURES OF CREDIT SCORING
A. Credit scoring models are intentionally ambiguous
B. Scoring model complexity prevents extrapolation
C. Scoring Depends on Reporting--which can vary considerably.
D. Scoring models and their key "inputs" are evolving significantly.
E. Scoring seems headed towards consolidation.
F. Scoring is always individual, not "joint".

III. RULES FOR KEEPING CREDIT SCORES HIGH
A. Do not EVER pay late.
B. Keep your apparent credit "utilization" low.
C. Seek higher credit limits.
D. Keep your "credit quality" high.
E. Cultivate a long credit history and an old average account age.
F. Avoid excessive "hard inquiries".
G. Avoid frequently changing your "official residence".

IV. TIME-TESTED TACTICS FOR FOLLOWING THE RULES
A. Establish credit early.
B. Be choosy about the quality of your credit applications.
C. Use "authorized user" status strategically.
D. DO NOT CLOSE ANY CC UNLESS YOU HAVE A SPECIFIC REASON
E. Time credit applications strategically.
F. Think through your "official" address.

V. MONITORING YOUR CREDIT
A. Why Bother?
B. Getting FICO, FAKO, Vantage, and other "scores"
C. Getting Access to your Report and Score

VI: RELATED ISSUES AND LINKS

Appendix: A Credit Glossary

___________________________________________


SECTION ONE: WHY SHOULD I CARE ABOUT MY CREDIT SCORE?

A. The Importance of "Adequate" Credit Scores


Clearly, having an acceptably high credit score is more important in recent years than at any time since scoring models were developed. If your score is not sufficient, you will:

-pay more to get mortgages, car loans, and other credit;
-be less likely to get offered a job;
-be unable to get many brokerage or bank accounts;
-pay more, perhaps much more, for insurance;

and those are just the effects that are widely documented. Because the increasing use of credit scores by various agencies is controversial, we often don't hear about their use.

B. "Adequate" vs. "Super" Credit Scores

A grading analogy might help demystify the importance of credit scoring. For most people, a credit score is more like a "high pass / pass / fail" grade than a letter grade. If you score a "high pass"--roughly, between a 680 and a 720, depending on the model--then that's "Adequate" for all practical purposes. Further improvements simply aren't important, and won't benefit you. Moreover, the higher into the 700 range one gets, the more difficult it is to raise them still further. The bottom line is that in the vast majority of cases, once one's true scores are well into the 700s, it simply isn't worth worrying about them anymore. The key is keeping a "high pass" or "Adequate" score.

C. Why would a "Super" credit score be helpful?

I can think of three reasons. First, super scorers sometimes receive the tastiest "by invitation" pre-approvals for new credit. Capital One has been especially aggressive about this, sometimes offering superb terms and huge lines to >760 credit scorers. Second, a very few lenders save their best rates for super scorers. Farm Bureau Bank, for example, will give a no-fee prime + 0 business LOC to super scorers (generally 760 or better) Finally, it's nice to have a "margin for error." For example, my credit profile is WAY too active to keep a score much above 750 on any sustained basis. But it's very important to me that it's always at least "adquate", as I earn several thousand a month from my credit lines and would suffer real losses if some snafu shipped me into "sub-prime" status. So, I like to shoot for the 740-760 range, so that I know that the minor issues (wrongly reported lines, unexpected inquiries, etc.) won't drop me below 700.


SECTION TWO: GENERAL FEATURES OF CREDIT SCORING

A. Credit scoring models are intentionally ambiguous.

The three major credit reporting companies / agencies (CRC or CRAs) are Equifax, Experian and TransUnion. They are private, for profit entities. They all maintain the position that their scoring models are "trade secrets," and they fight tooth and nail to reveal as little as possible about their details. Moreover, they are regularly tweaked, in ways that are not publicized. This is one reason why there can be no reliable answer to precisely how much a certain factor would affect a given person's credit score. This also explains why there is so much misinformation floating around on credit scoring, even from journalists and others who should know better.

B. Scoring model complexity prevents extrapolation.

Theoretically, two identical credit profiles, when faced with the same pertinent change (a new line, late payment, whatever) should have their scores change in the same way. But in practice, no two credit profiles are ever alike. There are simply too many relevant factors. The age of each credit line, its type, its payment history, its size, the degree to which it's used, and many other factors are get put into the "black box" of credit scoring. When all these factors are considered no two people are really alike. That's why you should be suspicious of anyone claiming that "doing x will increase (or decrease) YOUR score by y points." There is NO WAY that they or ANYONE else could know that information.

C. Scoring Depends on Reporting--which can vary considerably.

First, if a credit grantor doesn't report the use of the credit, then it isn't considered in your score. Most business credit lines don't report to one's personal credit at all--which is why business lines can be a great way to "hide" use of credit. Most personal cards do report the limit, the balance (generally as of the close of the last billing cycle), and the minimum payment due (at that cycle close). A few do not. Capital One is probably the most prominent exception, reporting the "high balance" instead of the limit to the CRCs. Counter to popular belief, such exceptions are rather easily worked around, provided one knows they are there. (Note: Cap1 in particular is almost always willing to offer no fee balance transfers, and they will sometimes even offer "purchase checks" that allow you do deposit your CL into a bank account. Simply pay the balance off before the cycle closes, and your new "highest use" will be your credit limit, while your balance (which is measured as of the close) may be as low as zero.)

D. Scoring models and their key "inputs" are evolving significantly.

The ambiguity of scoring models and the changes in reporting mechanics complicates the tracking of changes in CRC scoring models. Even so, anecdotal evidence and occasional industry comments confirm that major changes have occurred over the past few years. Here are a few worth noting:

-Inquires are often sent to the CRCs much more quickly than previously. Years ago, it wasn't uncommon for all 5 inquiries made on a Monday to not show on one's report until Tuesday or later. Now, most of them will show up almost instantly. Needless to say, this has implications for credit application strategies. In particular, huge "App-o-Ramas" don't hold quite the attraction they once did.

-Secured revolving lines are more accurately reported AND less damaging than they once were. Along with the HELOC boom of the early 2000s came many consumers whose credit was badly hurt by their >50% utilization on their equity lines. Gradually, equity creditors began to more precisely specify their lines as "secured revolving," "heloc", and the like, rather than the simpler "revolving" that all CCs are coded. Also, CRCs began treating them differently, recognizing that high use of a HELOC (at the prime rate or thereabouts, and secured by real assets) was a much lesser risk factor for creditors than similar balances on credit cards.

-Multiple loan inquiries within short time frames are more often bundled. Not long ago, "rate shopping" for a mortgage or a car could really hammer one's score, since every inquiry by each lender one spoke with would knock it down another notch. Now, CRCs allow for multiple inquires for certain products (generally mortgages and car loans) to count as one, provided they are done within a 14 or 30 day period. This more lenient treatment does NOT apply to CCs, however.

One key point can be inferred from the observations in the last couple of sections. That is, DO NOT ASSUME THAT YOUR CREDIT SCORING EXPERIENCE DICTATES WHAT OTHERS WILL EXPERIENCE. I've seen MANY people make claims like, "credit scoring doesn't work that way--I know because it didn't happen to me." Well, THAT SIMPLY DOES NOT FOLLOW.

E. Scoring seems headed towards consolidation.

The big recent news in credit scoring is the arrival of the Vantagescore . Among other useful revisions, this score will use an "Identical scoring algorithm and leveled credit characteristics across all three national credit reporting companies." That will make monitoring one's score much easier, and using the score significantly fairer to consumers. There is debate over how long it will take before this revision is phased in. Thanks to ksd for pointing out that consumers can get access to this score for $5.95 (as of July 2006) at vantagescore.experian.com .

F. Scoring is always individual, not "joint".

Unlike income taxes, where spouses can file "jointly" as one unit, credit scores are always individual. So, a wife can pay a household's bills on time for 40 years, and if she's never established credit in her own right, it WILL NOT MATTER if her husband dies, and she needs to get a mortgage or buy insurance on her own! Thus it's crucial that every adult establish the credit that they might need IN THEIR OWN RIGHT.


SECTION THREE: RULES FOR KEEPING CREDIT SCORES HIGH

While the subject of credit scoring is quite complex, the most important "rules" for credit scoring are simple and well known. You don't know what magic formula will get you an "A" on a UNKNOWN professor's term paper. Yet you do know that bad grammar, misspelled words, the wrong subject, and missing the page limits will keep you from getting a high grade. And you also know that if you do a serviceable job of following the guidelines of the assignment, and make sure you observe any firm rules, you'll probably do OK. Well, credit scores are similar. Follow the rules, and you might not get "straight A's", but you'll do just fine--and soon will get "high pass" grades. (If you have already "broken" the BIG rules--e.g., a chargeoff, bankruptcy, et cetera--then you need a credit repair strategy first. Other forums like creditboards.com are better suited for this. Please note that this isn't meant as a brush-off at all--just an acknowledgement that (1) I'm less informed on such issues, and (2) credit repair really is its own subject, and (3) sites that specialize in these issues do a better job than we could here.)

So, here are the key "rules," roughly in order of importance:

A. Do not EVER pay late.

Paying bills late enough so that they report as "30 days late" or worse is quickest way to drop your scores. OTOH, if you don't have any late payments, and all lines are marked "paid as agreed", it's difficult to get much lower than the 600s, regardless of what else you do. If you need to beg, borrow, etc, to make payments on time, do so! Do note that being a couple of days late on a payment will almost never result in it being reported as "late"...OTOH, going oversees and forgetting to pay that last Visa bill before you leave probably will, so BE CAREFUL.

B. Keep your apparent credit "utilization" low.

BOTH the percentage use REPORTED to the CRCs (which may differ from what's actually USED) on EACH available line, AND the total (aggregate) percentage used across ALL your REPORTING lines, are the crucial factors here. The degree to which these respective factors will matter varies considerably. I'll offer my more subjective opinions below. But it's safe to say categorically it's best NEVER to go above 90% on any line, especially a large line--and never to go above 50% on all your lines combined. Below the 90% threshold, there's ample evidence that 50% is a key level, and somewhat less evidence that 70% and 30% are used as "break points" for credit scoring models as well.

C. Seek higher credit limits.

Since low utilization is always better for one's credit score, it follows, that given the same credit usage patterns, higher limits will always generate higher credit scores than will lower limits.

D. Keep your "credit quality" high.

The best accounts are a single home mortgage (ideally infrequently re-financed), and one or more major UNSECURED bank cards (Visa, MC, AMEX, Discover, etc.), and perhaps one or two store credit cards. Car loans, personal loans, more store credit cards, etc. need not be big negatives, but they generally will do more harm than good. SECURED cards are to be avoided whenever possible.

E. Cultivate a long credit history and an old average account age.

The more established your credit profile, the higher your score. This is determined primarily via the age of your oldest REPORTING line (closed or open; credit card or mortgage, doesn't matter) and the AVERAGE age of ALL your REPORTING lines. Of course, there is only so much one can do to change this...it's largely a matter of time. But there are techniques that help. For example, lines in which you are an "authorized user" (AU) will often (but not always) report on your credit file.

F. Avoid excessive "hard inquiries".

Most credit-granting companies, and some banks/brokerages/etc. will "pull" a credit report from one or more of the three CRCs. (Customer service reps are often unreliable on whether and which reports get pulled.) They then remain on your report from that CRC for two years. Having more than one or so of these at a time is a negative, and having too many (generally 5-7 or more) may disqualify you for a particular credit product. Generally, the significance of these as a credit scoring factor declines after they are 6 months old. Once on, they are difficult to remove. One loophole: "bumpage", which results from generating numerous "soft" inquiries through such means as pulling your own credit via commercial services like PrivacyGaurd and through the solicitation of "pre-approved offers by other companies. Bumpage can remove inquiries from Equifax or TransUnion, but not Experian.

Note that while a few issuers pull credit at more than one CRC (notably cap1, which does all three), most will do only one. However, IME it's often tough to predict which one of the three it will be. I'm frequently told it will be x and instead it's y. One reason monitoring is can handy is because it lets you know how your previous inquiries are "distributed." For example, if you have 6 recent inquiries, but only two per CRC, you're not in bad shape. OTOH if all 6 are at one CRC, it would be best to avoid new inquiries that would pull yet another one from that same CRC.


G. Avoid frequently changing your "official residence".

One factor that makes a minor but measurable difference is how long you've remained at one residence, with longer periods being better. You don't have to keep physically living at the same place, of course (not that it would be feasible for many anyway)--just keep the address you list as your "official residence" for credit, bank, etc. purposes consistant where feasible.

OK, now that we've discussed the key rules, let's move on to some well-proven tactics.


SECTION FOUR: TIME-TESTED TACTICS FOR FOLLOWING THE RULES

A. Establish credit early.

Shortly after one graduates from high school, it's a good idea to seek out one or two high-quality bank cards with favorable terms and get approved for them, even if one doesn't intend to use them. After those report successfully for a year or two, then line increases and many more attractive offers may come your way...at that point, picking the cream of the crop and upping the mix to a few more cards can be a good idea. AS ALWAYS, the big caveat here is that one should only apply for credit if they have the self-discipline to use it responsibly.

B. Be choosy about the quality of your credit applications.

For example, one shouldn't "ghettoize" themselves by showing "secured" credit cards (NOT to be confused with "secured lines", like equity lines), rather than unsecured ones. If you are recovering from credit problems, it may be difficult to get unsecured bank cards, but in that case one should look for cards that will be eligible for conversion to unsecured cards within a reasonable period of time.

C. Use "authorized user" status strategically.

Many credit grantors will report AUs to the CRCs just as they would a primary cardholder. OTOH, if someone is removed as an AU, then they are required to stop reporting activity on that line. This opens up a world of opportunities for managing one's credit profile. For example, if you have a parent, spouse, etc. with a an older account and perfect payment history, it might help a great deal if you were to become an AU on that account--particularly if you have no or a short credit history. Also, if you're carrying a large balance on a card in which there are AUs, then have the AUs removed from the card until the balance is paid off. That way, the AU's utilization will come off much more favorable. The AU tactics are one more reason it's generally a bad idea to apply for "joint" credit. Far better to have one person apply as primary, and have the other apply as an AU.

D. DO NOT CLOSE ANY CC UNLESS YOU HAVE A SPECIFIC REASON.

Open credit cards that don't have any negative payment history only grow older with time, helping your "average age", payment history, and overall utilization factors. Counter to popular belief, closing the card won't remove it quickly from one's credit profile. It will fall off eventually (generally in 7-10 years from closure), but by that time it would almost always have been old enough to help your larger credit profile.

E. Time credit applications strategically.

If you are interested in, say, 3-10 new credit products, it's generally desirable to make sure that your credit report is at its short-term best, and then quickly submit all the applications at once--ideally the same day. This is the rationale behind the "AOR" / "App-o-Rama" / "application spree" strategy that's so often mentioned at FWF. There are several reasons for this. First, multiple same-day inquiries mean that one credit issuer often can't see that you've just applied elsewhere too. Second, some CRCs have not counted same day inquiries as more than one(!), which obviously helps that factor. Third, this "bunching" means that all the new credit grantors don't see the new "unseasoned" credit on your report, since it won't be reported to the CRCs until after their decision to grant you credit has been made. Forth, getting the "damage" of multiple applications over with in batches will give the report time to "heal" (inquiries will drop off, new lines will season, etc.), meaning that within a year or two one's score can be as high or even higher than it was previously.

F. Think through your "official" address.

For example, one who is renting an apartment for a year or two only near their college campus might apply for credit from their parent's address, and not switch that address for several years until they have a stable place of their own. (It goes without saying that this requires that you have complete trust with your parents!) Another example: if you have two homes, and spend part of the year at each, it's probably best to only apply for credit at the address that's been associated with you the longest.


SECTION FIVE: MONITORING YOUR CREDIT

A. Why Bother?

There are several reasons to monitor one's credit report and score. First, credit grantors and CRCs both make errors all the time, many of which can reduce your score. The only way to keep this from happening is to check the reports regularly, and dispute anything that's outdated or otherwise in error. Second, monitoring one's report identity theft is a growing problem

B. FICO, FAKO, Vantage, and other "scores"

For purposes of this FAQ, I'll stipulate that one's "true" credit score is simply what the inquirer will receive from the CRC at the time they submit their request. I DON'T mean that it's what one's credit score "ought" to be, or even that the score is derived from correct data.

It can be maddeningly difficult to obtain your "true" credit score. Virtually all of the credit scores sold through monitoring services are "FAKO" scores: made up scales that correlate only very loosely with true credit scores. Moreover, even if you can get a "true" score, it may very likely be a different score than the one your prospective lender will receive, since they may pull a different CRC's report or even a different version of the same CRC's "true" score.

For these reasons, it's a good idea to politely ask the lending officer to provide you with the score they received upon your applying for credit/insurance etc. Many are not supposed to share this with you, but in my experience they often are willing to. Some lenders (e.g. PenFed mortgages) even send you a written statement with the scores they received on you.

C. Getting Access to your Report and Score

Note that obtaining your own score directly (vs. through a lender) is never counted as a "hard" inquiry, and thus DOES NOT negatively impact your score.

While you can't get your scores for free, you are entitled to get one free report from each of the CRCs every twelve months.

I know of several monitoring services that provide credit reports and "FAKO" scores. Examples include Privacyguard and Truecredit . I subscribe to both, at around $100 yearly, but only because they both allow me to pull new credit reports every day. Other FWF users have reported that they are no longer given access to new reports each day.

Providian/WaMu credit cards provide you with a free "Bankcard Industry Option FICO score", and update it monthly. This perk is one reason we picked up the otherwise unexciting WaMu card. (See CreditGuy's posts below for more on this.)


SECTION SIX: RELATED ISSUES AND LINKS

My hope is that we can try to limit this thread to issues of getting and keeping high scores, as that is more than complex enough on its own terms (as the length of this OP demonstrates.) For related matters, please visit the following:

-Strategy and rationale for getting higher credit limits is here.

-Making money from credit via invested proceeds is discussed in detail here

-Getting LARGE credit lines is discussed here.

-Reallocation possibilities for credit lines are discussed here

-A useful list of 5% rewards credit cards is here.

There are also many, many threads that discuss great credit card offers and individual AORs, and new ones are constantly popping up.


Appendix: A Credit Glossary

This subject is complex enough so that a glossary seems warranted. Please suggest added terms:

-Credit Inquiry (also called "hard pull" or "hard inquiry" ) This is a request from some institution to access one form or another of your full credit report from one or more of the CRCs. By law (namely the FCRA), it can only be done for a "permissible purpose". Basically, this amounts to your asking to begin or continue a business relationship with the institution.

-Credit Report The list of information that a CRC compiles concerning your personal (or business) credit history. It will include personal information, open and closed credit, and balances, and payment histories.

-Credit Reporting Companies (CRCs or CRAs) For-profit companies to whom credit grantors report data about your credit lines and loans, payment history, and balances. The "big three" are Equifax, Experian and TransUnion, and they are typically the only ones that matter.

-Credit Score Generally (but not always) a 3-digit number assigned by a CRC to a credit profile. There are many different flavors of scores, and significant differences between flavors are common. Also note that there are many "scores" generated by CRCs that never get issued to a third party--so their practical effect is nill. These are sometimes billed as "FAKOs".

-FCRA, or Fair Credit Reporting Act. The major piece of federal legislation that spells out the rights and obligations of consumer creditors and debtors.

-Secured Credit Card A credit card which has a limit equal to funds set aside by the borrower that guarantees repayment. Usually, this takes the form of a bank deposit. For example, ABC credit union says, we'll give you a $500 visa limit if you give us $500 up front that "secures" the card. These are generally offered to people with poor or no credit. Some can be converted to more desirable unsecured credit once a good payment history of a certain duration is established.

-Secured Credit Lines. While this is sometimes used misleadingly to refer to a "secured credit card", it is commonly (and more accurately) used to refer to credit lines secured by physical property owned by the borrower, such as real estate or business equipment. A home equity line of credit (HELOC) is the most common form of secured line available to consumers.


OP content edit history:

7/19/06 OP, rearranging of sections
7/20/06 added table of contents, glossary, "related links" section
7/21/06 Added PM/email disclaimer, "seek to raise limits" rule, fixed WaMu credit score details (Thanks CreditGuy)
7/23/06 Updated "FEATURES OF CREDIT SCORING" section to include entries on "Scoring models and their key "inputs" are evolving", and "Scoring is always individual, not joint" per responder inquiries. Added link to the "higher credit limits" thread, and request that posts fitting better there be steered in that direction.


(This post and others written by its author are hereby licensed under a Creative Commons Attribution-ShareAlike 2.5 License subject to pertient enforceable provisions of the Fatwallet user agreement.)

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rated:
Specific suggestions forthcoming...

rated:
For use Neonates (Read: Youngins in early 20s, in grad school, etc) that are less informed of all these things:

Can you include a section on how to get your Credit Score (for free if possible) and the consequences of checking it, etc.

I try and find this information all the time, and its all contradictory and confusing.

Thanks,
A Neonate

rated:
It would be nice jsut to see what Credit Cards, etc. I have on my credit report. I know growing up, I had a credit card backed by my parents, etc. and I want to see if those are long established lines of credit, and things of that nature.

Edit for other questions: For those of us that applied for credit cards in college, etc. that did use our parent's residents when applying but now when in grad school, etc. have changed the address on that card to the appt/house that they will live in for about 4 years, is the address on the report still the one we used to sign up, or would it be wise to go back and change it back to the original address, our parents, that have been established for a lot longer?

Also: I wish I knew that keeping cards that arent being used was a good thing. I applied for a card last year and cancelled it months after deciding the Rate, CS was just not worth it as my existing card was light years better. Yes, right now I only have ONE credit card (besides being an AU on a parents way back when). In respect to this: Would it be possible to call the company up and "re-open" the same account, or is it six feet under and I should just move on?

Im sure that Im making WAY too big a deal over this, Im just trying to maximize all this stuff early and see that I have already made a few mistakes: a) cancelling a card last year for no reason really, b) changing the address on my credit card to my house now while I am in Med School when I had it originally as my parents home, a home for over 20 yrs. I just want to see if I can reverse those mistakes.

Also, I guess this can be c) Should I start openning more credit cards? I honestly only have ONE now in my own name that I openned upon leaving college/starting Med School. Before then, I always just used the one I was an AU on my parents and paid them, haha. Would oepnningabout 3-4 cards be beneficial right now even if I dont use them?

A true Neonate.

rated:
MiaFLSurf said:
Can you include a section on how to get your Credit Score (for free if possible) and the consequences of checking it, etc.

I try and find this information all the time, and its all contradictory and confusing.

Thanks,
A Neonate

MiaFLSurf said: It would be nice jsut to see what Credit Cards, etc. I have on my credit report.
Will not get you your score but will show your history


Free Report

rated:
There are no consequences for checking it. If you get your FACTA free report the credit bureaus get an extra 15 days to investigate disputes based on it. There are plenty of other ways to get a free report, like getting denied credit or looking for a job.

The #1 way to get and keep a good credit score is being ready to sue people, IMHO.

I am a student of the Flyingfir method. It kicks butt, and it works.

Everyone says "but I pay my bills on time, etc..." it doesn't matter. You could easily be the target of a shady collector, mistaken identity, or whatever. One of my good buds got dunned for some old $30 medical collection he has a paid reciept for. They plastered his credit reports no less. This company is going to get a summons.

You can be the victim of identity theft, although I think the potential for that is GREATLY exaggerated to sell more credit reports/credit monitoring products. At any rate, if I ever was, the creditors and credit bureaus would get one shot to get it right. On day 31, the summons' get mailed out.

Suing is the ONLY recourse that generates REAL results fast. You can contact the BBB, they have no authority to do anything. You can contact your state AG or the FTC. They don't care.

Notice, I didn't say threaten to sue, or send an Intent to sue letter, or anything like that. SEND A SUMMONS. Don't talk about it, be about it.

You need to know your rights and exercise them. Then you get your own personal reps at all the credit bureaus when you land in "special handeling" or whatever they call it.

rated:
I added some more questions above, Im just going to keep editting that post with more an more questions.

By the time Im probably done with it, I might single-handedly make this FAQ about a thousand questions.

rated:
If you're really interested in seeing how your FICO score is affected by individual events, I suggest getting an annual sub to MyFico Scorewatch. It's about $65 for a year (with the 20% discount that's frequently posted in FWF).

rated:
Re
That's why you should be suspicious of anyone claiming that "doing x will increase (or decrease) YOUR score by y points." There is NO WAY that they or ANYONE else could know that information.

A small note to this: generally you can predict what kind of effect "doing x" will have on your score, although not necessarily the exact number "y" of points.

rated:
Thank you, Dave! Your hard work is greatly appreciated around here!

I hope mods have enough brains left to ,make it a "sticky"!

rated:
Thanks for this great post, I do have few questions:

What's secure vs unsecure bank card?

What's the recommended way of dealing with cards you no longer use? Wouldn't it effect application for new cards?

Would maximizing credit limit of all cards/bank be a good strategy for lowering the apparent utilization?

rated:
-AVOID FREQUENTLY CHANGING YOUR PRIMARY RESIDENCE. One factor that makes a minor but measurable difference is how long you've remained at one residence, with longer periods being better.
Lol.

"I was going to move into that newer and bigger house, but it would have negatively impacted my credit score, so I didn't"

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Info you may want to add:

1) Info on how to get credit reports/scores (the annual free credit reports, providian/WAMU free credit score, etc.)

2) More detail on reporting differences between issuers and how to get Capital One to report acceptable information that doesn't hurt your credit score + other reporting issues.

3) How consolidation/reallocation of credit lines can affect scores - strategies for getting the cards you want with the longest possible history (consolidating and keeping the old card, then converting the old card to what you want). You may need to get specific with how different issuers treat consolidation, which I'm not sure is clearly discussed anywhere else on FWF (which issuers consolidate and remove a credit line from your report vs which just close/transfer credit line).

4) Information on hard inquiries by issuer - when you apply for a card, an issuer generally only pulls one report so you only get one hard inquiry with that CRA.

I dunno what else. As always, your FAQ/Review posts are the best, DH. Always elaborate, well organized, and on point.

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Dave,

Thanks for the FAQ. Very well written! Just an idea here: you may want to include a section on credit scores differentiating between true FICO and FAKOs like the Vantagescore. IMO, scores aren't cheap and nobody should waste their money on the fake ones (especially if they are applying for a mortgage, etc). Thanks again!

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A simple way to increase CL?

CL on AMEX BLUE Cash Back last week was 12100, made a BT for $7000 and new purchases about $3000. Today my CL is up to $22100.no BT fees for AMEX. so pull and pay pull n pay...might work for you guys....

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Great job!

Vantagescore is already available to consumers, see this thread

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DaveHanson said:
D. Scoring seems headed towards (long overdue) consolidation.

The big recent news in credit scoring is the arrival of the Vantagescore . Among other useful revisions, this score will use an "Identical scoring algorithm and leveled credit characteristics across all three national credit reporting companies." That will make monitoring one's score much easier, and using the score significantly fairer to consumers. There is debate over how long it will take before this revision is phased in and when consumers will have access to it.

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Thanks very much for the suggestions, questions, and kind words all. I've been revising the OP, including a new fifth section on getting scores, and will add more in the next couple days.


MiaFLSurf said: I know growing up, I had a credit card backed by my parents, etc. and I want to see if those are long established lines of credit, and things of that nature.You could tell by checking your report. You could even request that if it is NOT on your report, you have your parents call and request that the creditor report you as an AU. Asssuming their account is in good standing, this would help you, perhaps a lot. And while the creditor might not honor your request, it never hurts to ask. Edit for other questions: For those of us that applied for credit cards in college, etc. that did use our parent's residents when applying but now when in grad school, etc. have changed the address on that card to the appt/house that they will live in for about 4 years, is the address on the report still the one we used to sign up, or would it be wise to go back and change it back to the original address, our parents, that have been established for a lot longer?If you've already changed the address once, I'd say leave well enough alone. This isn't a big deal in any case. Also: I wish I knew that keeping cards that arent being used was a good thing. I applied for a card last year and cancelled it months after...Would it be possible to call the company up and "re-open" the same account, or is it six feet under and I should just move on?If it's within one year, I'd definitely call. You might even be able to "convert" it to something better after re-opening it, and keep the same history (and account number.) Would oepnningabout 3-4 cards be beneficial right now even if I dont use them?That very much depends on your situation. But assuming that (a) your credit is spotless, just light, and (b) you won't have a need for a mortgage in the next 12 months, and (c) you have the time and interest to pick a handfull of carefully chosen cards, I think that grabbing a couple of good ones might serve you very well.


codename47, I'm sure several of us would like to hear more about your suing the CRCs. It probably warrants its own thread, but it would also be very on topic here if you'd like to elaborate.


babyblue007 said, "What's secure vs unsecure bank card?" I'll put that in the OP. What's the recommended way of dealing with cards you no longer use? Wouldn't it effect application for new cards? Just make one small charge every year or two to keep them active, and otherwise ignore them. Would maximizing credit limit of all cards/bank be a good strategy for lowering the apparent utilization? Absolutely.


rtconner, it seems you were confused by my use of "primary residence", so I've tried to clarify. (Of course I'm not suggesting that someone not buy a new house to protect their score.)


dk240t and minghi, you raise good points..they mostly go to more specific strategies, so I'll try to bring them up in the second post. Feel free to remind me/bring them up again as appropriate.


Good point Nummerkins, let me know if you think more info on Section 5 would be helpful.


Thanks ksd, I've got your useful info in the OP. I also pulled the score for myself and pasted it as a bump to your thread.

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Thanks for the reply DaveHanson:

I just went to annualcreditreport.com or whatever and got a free credit report with just one of the companies, experian (so I could use the other 2 to check later this year after I open more cards, etc.)

It turns out I have 9 accts in good standing and 0 potentially neg. accts - I guess thats a great start.

Under the 9 accts, these are two CCs that I was put on as an AU in 2000, when I turned 18 right before college. My dad has flawless credit really (over 940 I believe) so that made me pretty happy.

With that said, I tried to call the CC company that I cancelled a card with in December. The CSR was in nice terms, really not helpful, so I basically gave up. After looking at my report, its nowhere near my oldest CC and it won't make a big difference at all in the long run since I am planning on openning new cards this summer.

So with this said, is the next step to open more accts?

My CC now is a Citi Platinum Select Dividend Card for College Kids (the 5% grocery, gas, drug store and 1% all else one).

I use that to basically pay everything, never really going that high and always paying the whole bill every month. In a year I have raised my credit limit on this card from $3500 or so to $7000, and every few months or so they offer it to go up more, and I always accept it.

I am thinking about taking out some more cards to set myself up for after med school. I am currently going into my second year, and plan on being one of the lucky ones to get out in only 5 figure debt if all goes as planned (my school gave me a great financial aid package). I dont plan on getting a mortgage in over 5 years, let alone 1, haha. I feel like I am already in the right direction having alot of my loan money from last year still left at the 4.75% rate, not the new 6.8% rate that starts this year. That is in a 5.05% and rising HSBC online savings acct to offset that interest until I use it this year so I take out less of the 6.8% money.

Regardless, I want to keep the credit rolling on up....

What do you believe the next step is?

Thanks in advance.

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MiaFLSurf, I'm sure you'll understand that I don't want the thread to get sidetracked into long posts applicable primarily to only one person. It's tough enough getting a handle on the all the aspects of the general subject!

Of course it's nothing personal. On the contrary, you obviously are a sharp person who has made many smart moves up to this point. Only you have a good sense of your objectives, so only you can know "what the next step is."

I will say that you seem to me to be on the right track. And as for more general questions on keeping scores high, feel free to fire away with follow-up questions of the kind you first replied with.

Moreover, you can do the same with the other threads linked in the new "RELATED ISSUES" section above.

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No problem, sorry about that.

Its true, sometimes I worry myself too much into these long rants.

Thanks for your help!

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Suing the credit bureaus

I am a litigious, angry consumer. I'll sue a creditor, collector, or credit bureau at the drop of a hat. Why? Well, it is the only thing they understand, since these are for profit businesses. Threaten their profits, and they sit up with rapt attention. Yell, scream, cry, kick, moan, groan, etc... and they don't care. The credit bureaus in particular ARE NOT YOUR FRIEND. They don't make any money off of you directly, YOU ARE NOT THEIR CUSTOMERS. The credit bureaus make money from selling reports and information to creditors and collectors. Only as of late have the bureaus embraced this concept of selling reports and credit monitoring products to consumers while throwing out the spectre of "identity theft". Before that, believe it or not, the big 3 ran collection agencies and were really in a consumer hostile mode.

One universal concept is that credit bureaus DO NOT FOLLOW THE LAW. They push the envelope as far as they can go, get a 1M fine or so every year from the FTC, chalk it up as a business expense, and figure out what to do with the other 199M they earned that year. If you can game the system and delete accurate info (and you absolutely can) you'll hear wails and moans about how it is fraud, and how future creditors could get burned, etc... Credit reports are defacto inaccurate by and large. I've seen numbers suggesting upwards of 70-80% contain inaccuracies. Why? Because contrary to popular belief the credit bureaus don't actually CHECK the information they are given, they just report whatever the creditor/collector puts in the E-oscar terminal. Anyone can report anything at any time, and you are generally powerless to do anything about it. The CRA's can rely on the representations of the data furnishers. The way the law is written, it is on YOU to do something about any inaccuracies.

As far as doing investigations, as Johnson V MBNA showed, the credit bureaus and data furnishers just parrot information back and forth. "You got a Johnson owing a debt? Yup, sure do. Ok, thanks, VERIFIED" That is about it. The data furnishers don't get information on your dispute, it is reduced to a 2 digit code (01 = not mine, 02 = never late, etc...) and sent off. Don't ever think for a minute that a "not mine" can't get confused and put in as a "never late" or something stupid like that. The data furnisher checks their records or is supposed to and then they update accordingly. For example, on a "not mine" dispute all that is checked is your name, SSN, DOB, and address. Match 2 out of 4 and it is verified. The deck is stacked against you.

If YOU are on the recieving end of a raw deal, though (ID theft, mistaken identity, just plain wrong info being reported), you'll often find that you have no recourse. Go ahead, complain to the worthless BBB. They are a private, for profit entity as well with no regulatory power to fine or do anything. Write your congressman: they simply don't care. Write the FTC: they won't get involved unless there is a "volume of complaints" which means as your civic duty, you SHOULD do this, but don't expect any personal attention, unless you have an egrigeous case. Write your state AG. They are like the FTC, and should be involved, but don't expect much help.

Now, what is a consumer to do? Just sit back and take it and hope superman comes to your aid? I don't think so.

There is one last recourse that for whatever reason consumers as a whole just don't do. SUE THEM!!! This is actually my first recourse. I approach EVERY call, letter, or whatever as me simply gathering evidence in preparation for a lawsuit. I record all calls ( I live in a 1 party state, as most states are, and even if I didn't, the big 3 give 2 party notification with the start of each call. Record everything no matter where you live when dealing with them, and don't tell anyone you are recording). I send my letters certified with return reciept, so I can have proof when they come with the "we never got it" excuse. They get one shot. If you screw up, I am going to be best of friends with your corporate counsel. I am on a mission to sue them, unless they make me happy. The CRA's are NOT your friends, they are NOT on your side, they do NOT have your interests at heart.

Suing is depicted as something to be done only in "extreme" cases, like nuclear war. Truth be told, consumers get sued every day by the hundreds by collectors, and businesses sue other businesses all the time as well. Suing has been depicted as "evil", mean spirited, or an opportunistic person looking for a jackpot judgment. In truth, you CAN absolutely get a monster judgment, depending on if you have actual damages, and rightly so. If you have some stupid collector or business reporting inaccurate info, or the CRA's fail to follow the established procedures and it costs you a house, that collector or CRA owes you a house, pure and simple. For smaller transgressions, 1k per violation is the legal max for statutory damages. If you can show actual damages, such as getting declined, then the damage o meter goes up from there. The point isn't to get paid, though, but to clear up your report. All I can say is nothing gets someone's attention like a summons.

One silly notion is that suing is hard. Suing isn't hard. Lawyers do it all the time, so it can't be THAT difficult. Head to the Western district of Texas Federal court website, and download the pro-se guide if you don't have one. The hardest lawsuit is your first one. The pro se guide has examples, definitions, etc... It is so easy. Describe yourself, describe your problem, how you were harmed, what laws were violated, describe what damages you have, if no actual damages go for statutory. Sign it, get a clerk to stamp it, send it off certified, and wait for your call the next day.

You will probably have to go pro-se, because it is harder to find a GOOD consumer lawyer to take your case on contingency than it is to find an honest politician. Lawyers want money. Consumer cases, generally don't have a lot of money, unless you have the magic case (good 700+ credit, collector or someone plasters your report, you dispute to no avail PROPERLY, and it costs you a house or something, and that gives you an ulcer, AND your wife divorces you) outside of that, you are probably better off going at it alone. People attach all sorts of mythical abilities to lawyers, but honestly, most have no clue about consmer statutes and a brief read through of the law and significant cases will make you more knowledgeable than 99% of the lawyers in the world, no joke. I've gone head to head with the best law firm in town, TWICE, and these guys are absolutely clueless. They don't know the first thing about consumer laws, and much of it was spent with them telling me why I should accept a pittance, with me telling them they better come hard with a settlement that makes me think about not continuing or not at all.

Next fallacy: suing is expensive. It isn't expensive. It costs more to have bad credit than it does to sue a few times. Federal court is now $350. Get an "Informa paupis" form to hopefully file for free. I've done it every time I have sued, and it was denied every time. I knew I had no chance to get it approved, but I did it anyway. Why? To get the suit filed. Once it is filed and served, the defendant will have 20 or 30 days (I can't remember which) to answer it. In that time, they'll do their best to convince you how you have no case, how lucky you are that they are letting you dismiss it with prejudice, and how they are going to sock you for atty's fees. If they come to their senses and make me a reasonable offer, which includes fixing my report and some cash, then I may be able to make out without paying the fee. Worst case, I add a few weeks to a generally long process, and I pay the fee in the end, no big deal.

I think the "we will sock you with atty's fees" is like the standard line lawyers have to memorize before taking the Bar or something. With just about every consumer statute, the ONLY time you can be hit with atty's fees is if you are suing in bad faith or for harassment. Prove one violation or one pseudo violation or heck, even if you are mistaken with your interpretation of the law, you have NOTHING to worry about. Furthermore, if you can prove ONE violation, all court costs, legal fees, and expenses are billable to the defendant. Suing in actuality is free.The lawyer just wants to get it dismissed, so they don't have to do any real work. Real work is expensive, and it costs their clients money. YOUR GOAL IS TO COST THEIR CLIENT MONEY.

The next step is discovery. Discovery is were you kinda ask them relevant questions about the case and they ask back. BURY THEM IN PAPERWORK. Ask for any and everything, the agents names and addresses that fielded your calls, who worked on your case, what FCRA training they went through, EVERYTHING. Start working on your motion to compel while you are waiting for them to send their blanket objections. Make it expensive to deal with you. Don't give them anything as far as free discovery or tell them about your case. After the first call, unless they are bringing a sizeable settlement, tell them not to call and to send everything via certified mail. The more money you cost them, the more likely they are to capitulate.

The big 3 talk tough and put up an initial fight, but generally capitulate easily. Why? They don't want bad caselaw out there, they don't want regulatory attention (the FTC DOES track Federal lawsuits), and they don't want to risk any Johnson V MBNA expenses (80k Judgment, plus atty's fees for both sides)

Oh, yeah make sure to sue in Fedreal. Small claims court is a joke. The judges are idiots, the clerks are idiots, they probably have never heard of the Fair credit reporting act, the CRA's will probably just remand the case to Federal anyway, and small claims courts generally lack the power to grant injunctive relief.

Common ways CRA's violate the law include:

not allowing people to dispute inquiries. This is a clear cut violation. When you get your standard "inquiries are a matter of record..." letter, respond with "so are lawsuits, here's a summons..." It is a stone cold, hands down, clear cut, violation. The FCRA says you can dispute ANY INFORMATION in your credit file. If a hard inq should really be a soft inq or it wasn't authorized, you can dispute it. Think of it this way, if you can dispute silly stuff like phone numbers or addresses that generally have ZERO impact on your FICO and marginally at best as far as getting approved, you should be able to dispute inq's. Bottom line: it is the law and your right to dispute ANYTHING in your file. If anyone gives you any static, sue them.

Not sending REAL responses to procedures requests. At anytime you can request the procedures used in your dispute. To ME that sounds like a detailed account of when the dispute was sent, what was transmitted, who responsed and how, when they responded, etc...The CRA's say it is a standard form letter saying they investigate your disptue and publish the results. Well, here is my standard form letter: Plaintiff: Codename_47, Defendent: Dumb credit bureau...

Not doing thing in the required time frames. This is an easy one. CRA's are supposed to transmit info within 5 business days to the data furnishers. The often don't. My response: "stop right there, delete it now" If they balk, sue them.

I had a certain regional CRA try this one with me: "We need a copy of your drivers license and SSN card to send you your dispute results" Please. For a CONSUMER DISCLOSURE, yes they can require proper ID. Dispute results are not consumer disclosures. Consumer disclosures are not dispute results. A consumer disclosure is when you are denied credit or purchase a free report. Dispute results are dispute resutlts, period.

Reinsertion. This is where you dispute something, the creditor re-certifies that it is indeed accurate, and it comes back. The CRA's are supposed to send you a letter stating that it has been reinserted. Do you think they ever do? Of course not, so why don't you send them a little letter instead.

Not reporting credit limits!!!! This one pisses me off. The FCRA says the CRA's must strive for the "maximum possible accuracy", but they WILLFULLY do not report credit limits. I am going to sue a credit bureau over this here shortly. I disputed the credit limit of one card, which is 26k, not too shabby of a limit, I think, much better than 17k that they were reporting. They changed it for a month, then it changed back. I have them for reporting inaccurate info, reinsertion with no letter, and not striving for maximum possible accuracy. Sure, it says high balance or credit limit, but lets assume for a minute that NOBODY reported credit limits. It is a huge part of your score, second only to payment history, and if it is so important, why do people get the option to report it or not. They don't, in my book.

My personal favorite is ID theft. I wish someone would. I have NO fear of someone stealing my identity. I would dispute ONE TIME, send in the appropriate paperwork, and in 31 days, if that stuff isn't off my report, EVERYONE is getting a summons.

Suing works. It costs people money, which they hate. It gets people's attention. I would never, ever spend hours upon hours on the phone trying to get someone from india to investigate my dispute. I'd bang out a 1 page letter in word, send it certified ONE time, follow up with a letter demanding deletion after day 31, and the third thing would be a summons. The only reason I would ever be on the phone is to get the name of the corporate counsel or to get a physical address if I can't quickly find one to send my paperwork. Put your number at the bottom, and they WILL call YOU within 24 hours. The credit bureaus get sued all the time. They have a special department at each that handles angry consumers that sue called "special handeling" or whatever the term de jour is. I think the best thing you can have to preserve your score is a solid understanding of the law, and the willingness to defend your rights.

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codename47, Amen. I just got a settlement (the terms of which I can't disclose) from one of the big three for refusal to remove derogatory inaccurate info. Now I have a clean record AND some money. I kinda wish it would happen again...

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You know what, I really appreciate great folks like you, taking the time and posting such valuable information in these forums.

Other folks might share such rich information only in their blogs and make money from Ads.

Green to you OP.

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Great post codename47. One of the most informative posts I've ever read on FW.

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I just came across a site with great info the other day. It really explains what your rights are. there are great pieces of information you can find many places but this is something I hadnt seen yet:

Myth: It is illegal to have truthful information removed from your credit report.

Fact: Congress has already set the precedent by making special provisions for the removal of correct information from individuals' credit files by fulfilling certain criteria. Congress realizes that dangling that carrot in front of college students encourages repayment of defaulted student loans. It should come as no surprise that creditors in other financial markets are hip to this. Let's face it; congress had to get the idea from somewhere. Right?

If you need more proof, read section 609(c)(2)(E) of the NEW Fair Credit Reporting Act that President Clinton signed in September of '96.

"...a consumer reporting agency is not required to remove accurate derogatory information from a consumer's file, unless the information is outdated under section 605 or cannot be verified."

Notice the wording above, "is not required to remove." It is very interesting that the law does not say that accurate information "can not" be removed, but only that the credit bureau is not required to. Now, there is law that says a creditor can not knowingly add wrong information to someone's file, but the subject of removing accurate information is mysteriously avoided. The truth is the FTC and the bureaus themselves spend a lot of money trying to convince consumers otherwise. Why? Lobbyists and money of course! It makes more work for the credit bureaus, thus increasing their labor costs. Bureaus save millions of dollars a year by convincing consumers that the consumer is virtually powerless. But congress worded things to leave the door open, and in at least one case drafted law allowing for it, specifically.

Fortunately, creditors make their profits by collecting from their customers, not reporting negative credit information. Many creditors, though, have an agreement with the credit bureaus that they will not allow a negative listing to be deleted upon settlement. Larger creditors, such as huge credit card companies or banks will require more pressure before they will agree to delete a negative listing, but virtually every creditor will give in with the right amount of convincing. Every creditor who reports to the credit bureaus can also change the information they report. In most credit organizations, there are several managers with the authority to make changes on the credit report.

Bottom Line: Anything a creditor is responsible for reporting and confirming, a creditor can change.


I am going to post a link to the site. It explains steps and your rights very clearly.

I'm gonna link to the page the gets straight to the point of how to build/rebuild credit.
ClickText

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I'll go one further, Check out Rule 5000 of the FDIC. It covers LEGAL re-aging. This is were negative, 100% accurate information can legally be removed from the credit bureaus. It is how you rehab a somewhat delinquent account. You have to meet certain criteria as a consumer, such as making a renewed promise to pay, making like 3 or 6 on time payments, and I think one other thing. My point is, again despite the wringing of hands, and shouts of terror on how the financial system will collapse tomorrow if consumers can remove accurate, negative info, the FDIC apparently is not worried.

As far as keeping negative info on, there are two reasons for it, I think. First, it is an excuse to charge more for credit. Mortgage types have known for YEARS that while FICO and overall delinquicies are correlated, it is a weak correlation with mortgage defaults. People will default on all sorts of things, like their car, default on a credit card, etc...before they default on a mortgage. Subprime lenders make a TON of money, don't be fooled, especially in the mortgage game.

Second, think about it in reverse. As a creditor, say there are 3 bureaus, one is known to be a softie (TU) in dealing with consumers. One is known to be 50/50 (Eq) with consumers, and the last one is known to be an absolute stonewall when it comes to consumers. (Ex) If you had limited resources, which one would YOU choose to pull reports from? Would you take a chance on TU and possibly miss something, or would you go with the one that absolutely would have any and all negative information to make a decision with (Ex)? I think most lenders want to make sure if there is any error, it is an error on the side of caution, so they would go with the CRA that displays all the information on the person and any other possible combinations, no matter how unrelated.

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I have a question about suing:

When I was 18 and in college I opened a Wellsfargo scredit card $700 limit. About 10 months later I wenton spring break and maxed it out. I was afraid to tell my parents so I waited, not paying anything for 2 months, after which I told my parents.(I know dumb) At that point they paid the balance and I requested the account be closed. A few months later when I went to switch banks I learned because of my credit the only checking account I could open would be one in which my parents co-signed. So that is the way it has been. For five yrs that is all I could get in my name, no leases, no credit cards, etc. So a couple months ago I finally was able to open a checking account in my name, but now 25 I have NO credit. I can not even get approved because of that for a gas card, and my apartment lease still needs a cosigner. Looking over my credit report Transunion reported the creditcard/same account# closed twice. One date reported in 2000 "account closed by consumer", then reported in 2003 "canceled by grantor". This is an obvious error I am working to change, can I sue anyone?

Experian amd Equifax have the account "closed(paid)" date reported 2003. Experian has "credit line closed-grantor request-reported by subscriber" and Equifax has "Paid account/zero balance accounts closed by grantor". Isnt this all weird since the account was closed by me 2000.

****I wanted to add that I could have been passover for jobs since many companies now check credit upon hiring.

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eyeluvtrget said: I have a question about suing:

When I was 18 and in college I opened a Wellsfargo scredit card $700 limit. About 10 months later I wenton spring break and maxed it out. I was afraid to tell my parents so I waited, not paying anything for 2 months, after which I told my parents.(I know dumb) At that point they paid the balance and I requested the account be closed. A few months later when I went to switch banks I learned because of my credit the only checking account I could open would be one in which my parents co-signed. So that is the way it has been. For five yrs that is all I could get in my name, no leases, no credit cards, etc. So a couple months ago I finally was able to open a checking account in my name, but now 25 I have NO credit. I can not even get approved because of that for a gas card, and my apartment lease still needs a cosigner. Looking over my credit report Transunion reported the creditcard/same account# closed twice. One date reported in 2000 "account closed by consumer", then reported in 2003 "canceled by grantor". This is an obvious error I am working to change, can I sue anyone?.
for being bad on spring break?

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SUCKISSTAPLES said: eyeluvtrget said: I have a question about suing:

When I was 18 and in college I opened a Wellsfargo scredit card $700 limit. About 10 months later I wenton spring break and maxed it out. I was afraid to tell my parents so I waited, not paying anything for 2 months, after which I told my parents.(I know dumb) At that point they paid the balance and I requested the account be closed. A few months later when I went to switch banks I learned because of my credit the only checking account I could open would be one in which my parents co-signed. So that is the way it has been. For five yrs that is all I could get in my name, no leases, no credit cards, etc. So a couple months ago I finally was able to open a checking account in my name, but now 25 I have NO credit. I can not even get approved because of that for a gas card, and my apartment lease still needs a cosigner. Looking over my credit report Transunion reported the creditcard/same account# closed twice. One date reported in 2000 "account closed by consumer", then reported in 2003 "canceled by grantor". This is an obvious error I am working to change, can I sue anyone?.
for being bad on spring break?


for losses incurred do to error.

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The question is: Did you ever disptue it? If you didn't dispute it, then no you'd be hard pressed to win in court. Like I said, anyone can report anything at any time, and until you dispute it, it can stay, and the data furnishers GENERALLY have some immunity.

The #1 thing you need to do is pull your reports and scrutinize them. Don't get the stupid annual report one. That gives the credit bureaus an extra 15 days to investigate. You've been denied plenty, so just write a 1 page letter, say "I've been denied credit, send me a copy of my report" and that should be that. Viola! Free report.

Dispute the negative stuff (don't do a "not mine" pick something else) and see what stays and what goes. IMHO, once a creditor gets paid, they don't care about credit reporting.

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eyeluvtrget said:
for losses incurred do to error.
you did not detail any efforts to correct the error. You need to give them an opportunity to correct the error, but its your responsibility to bring it to their attention - they are not omnipotent.

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Another way to get and keep a high credit score:

Continue to dispute items even if initially unsuccessful.

My story: I moved about 4 years ago. One of my credit cards (Citibank) they didn't change my address upon request. It wasn't immediately obvious because I didn't use the card much anymore (though it was my first card, from 1992). So apparently the card number was stored on an online site which my wife ordered from, $16. So the bill went to my old address, but I wasn't even aware of the charge so I didn't realize. Long story short, it ended up a chargeoff at $60 and a nasty black mark on my credit report, though I was completely unaware of it. To compound the fun, it was a joint account.

A little later, after finding FWF and becoming a little more credit savvy, I found this on my report. I contacted them, tried to explain the situation, etc., to no avail. They claimed I couldn't prove I had sked to change the address. I still wasn't that savvy so I ended up paying the total in the hope that would fix it, but no.

So since they wouldn't help me, every once in a while I would send off an electronic dispute via the credit sites, which never really did anything. Just last week, after yet another electronic dispute, poof, account gone. I'm a little annoyed because my credit history is now 3 years shorter, but not sure if anything I can do about that, as I suspect if I put the account back it will have the chargeoff.

So two lessons from this story:

1. Don't store your credit card anywhere, as it can lead to problems including identity theft and charges you don't know about.
2. Obviously if you are right, but even if a situation is questionable, or even if you are completely wrong, it's easy to send in disputes, and sometimes works.

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Rajjeq said: So two lessons from this story:

1. Don't store your credit card anywhere, as it can lead to problems including identity theft and charges you don't know about.
2. Obviously if you are right, but even if a situation is questionable, or even if you are completely wrong, it's easy to send in disputes, and sometimes works.

And learn to check your credit card statements online, don't just count on the paper statements...

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Rajjeq said: I'm a little annoyed because my credit history is now 3 years shorter, but not sure if anything I can do about that, as I suspect if I put the account back it will have the chargeoff.


From my understanding its very hard to get an account back on your report.

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I think I've decided to just accept it because my scores took a pretty large jump from not having the chargeoff on anymore.

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Once an account is deleted, you'd be better off to just leave it alone. FYI, the FCBA has some protection if you change your billing address, and the creditor doesn't follow through. I think it is like 30 days out, but just be aware of that in the future.

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Great info.

One thing I would like to add that by initiating a temporary credit alert for 90 days (I do it every three months in order to better protect my identity), you are entitled to a free credit report from each of the three CRC.

I wonder if you can add this info to the main message.

Mik.

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Thanks for the many kind words and especially the feedback: both are much appreciated. Answers and PMs RE this thread have kept me busy--I'm still planning to edit that second post, but getting to it will take some time.

Before PMing me about this thread with questions specific to your situation, please read the new disclaimer at the top of OP. I keep my PM option turned on, but simply could not answer all the detailed questions about credit strategy if I wanted to.


Along those lines, no need to apologize, MiaFLSurf. You posted here, and your initial questions should apply to many others--so I'm happy to try to address them. Thanks for your excellent attitude, and feel free to follow up with more questions that might assist others too.


codename47, thanks very much for taking the time to write such a detailed post about suing the credit bureaus. The unanimous green you received amply shows that many of us appreciate your thoughts! As the spouse of a consumer protection lawyer, I can also (sadly!) vouch for basically every substantive point you made in that long post:

-CRCs aren't consumer friendly;
-They and routinely violate the law;
-They respond best to legal action (sometimes threats of same will do);
-Other agencies generally can't or won't intervene;
-Good consumer lawyers are very hard to find (little $ in it), and
-Even they won't take most cases like this (too little return);
-Most lawyers are very uninformed on these issues;
-Many people have fixed their credit AND made $ filing their OWN suits.

I will likely add a separate section in the OP about disputes and fighting the CRCs. Alternatively, if you wish to spend time running your own thread on fighting them, I'll be sure to link to it.


highmktgoods, while you can't disclose the settlement, can you add more about the specific techniques you used to get it, along the lines of codename47's post?


eyeluvtrget, thanks for the link. Looks like an interesting site--I'll review it and perhaps incorporate it into the OP.


Rajjeq, I agree with codename47: best to leave well enough alone in situations like this. Do note that even though it's gone now, disputed items can come back very easily, so be on the lookout for them!


djmikmik, do you have a link on the "temporary credit alert" you refer to? I want to make sure it's the same thing I'm thinking of, and it'd be good to verify how one can most easily go about exercising that right to additional credit reports. Thanks--I'd be glad to incorporate that into the OP.

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codename...

Suing is lame unless you actually were hurt. Not getting a credit card due to bad info is not grounds to sue as far as I'm concerned. Especially when you can check your credit report for free yearly. People need to take personal responsability and fix their own credit reports. If you're trying to get a house you should have fixed your credit report before even getting an agent. Now if they refuse to fix your credit report then I can see that being grounds for litigation but I'd try a letter to the top dog long before heading to the court house.

Suing is a waste of time and money most of the time. Hopefully someone doesn't sue you one day, bury you in paperwork, and cost you tons of money. Then you'll sing a different tune. As a business owner it seems like everyone wants to sue. It's just lame. What you don't realize is that if they want to they can screw you over for several years (in some states) by just drowning you in paperwork, demanding depositions, filing change of venues to maybe the state where their corporate office is, etc. The pendulum swings both ways. You might win in the end but it can take years and years and years and you might go broke and just have to give up. I've seen it happen. They can smother you. I would only sue if you know what you're doing and can prove your case quickly. Then of course you have to hope you get a good judge since I've seen some judges just get lazy and delay a case out for years due to the volume of paperwork that generally accompanies these stupid tit for tat lawsuits. Once you start the paperwork war it's basically a mess and a judge won't want to spend 6 weeks of her time reading 600 pages of crap. Then when the company requests delay after delay they'll get granted. There are ways, motions, to stop large companies from outspending you by getting a case through a trial quickly but they're not necessarely going to work.

With that said, I agree completely that for most litigation you don't need a lawyer for these small legal matters. Lawyers are generally just overpaid bookworms and I've fired every personal lawyer I've had. I don't think I'd want to do any courtroom law on my own though. I wouldn't want to risk a win just because I couldn't talk the lawyerbabble. If it's just paperwork though (immigration and divorce within 5 years for example) don't bother with a lawyer. Most lawyers are pretty stupid unless you're getting one that costs several hundred dollars an hour which I've had to use for lawsuits pertaining to my business.

Skipping 780 Messages...
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These comments are AU accounts only.
In my experience, YMMV. After a couple of months, Chase was successfully closed and off my score utilization. Same for Citi Dividend Rewards. DiscoverCard (name change to DiscoverBank on many FICO and FAKO) still reports my MOM's closed account which raises my total possible utilization. Result the bottom number of the Divisor (total credit of all cards) is almost 9% higher than it should be.  In a couple of reports, the "last reported date" was reasonable to the date closed, but is still a factor in my credit scores.
AMEX cannot make up their mind. Over the past five years, it has been removed and put back in my reports affecting the Divisor (total credit of all cards). All these cards were paid in full at closing, so the only real effect is on Divisor (total credit of all cards) The top number (sum of credit in use) is not affected. Net result is my TOTAL utilization percentage is lower than it factually is.

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