Credit "repair"?

[JB]

I generally pay off all of my credit accounts monthly, except the loan on my truck and my mortgage, which I usually pay a week or so early.

I was curious why the interest rates on my credit cards are so much higher than I think they should be, even after I called and requested lower rates. That was an academic exercise because I pay no interest by paying them off monthly.

I am considering buying a new vehicle and another house, so I am interested in what interest rates I would be dealing with.

One company rep told me that it was tied to my credit score, so I went to "Free Credit Report" and found the following:

My "score" is only 681!

All of my current accounts and closed accounts show zero negative history, but:

About 8 years ago I made two errors in judgement and let my generosity get the best of me.

1. In 1999 I invested in a friends start-up business and provided a credit card to help him with day-to-day cash flow. In 2004 the business folded. There was a $15K balance on the card, which I closed with a negotiated payoff of about 60% of the balance. I did not realize that the negotiated payoff was a negative credit event.

2. In 2000 I helped a local newly divorced single mom (damsel in distress) buy a home by co-signing a mortgage. I have not seen or spoken to her in years but the credit report shows a $33K balance and numerous events of 90 and 120 day late payments. The bank has not contacted me about any of those events. I wouldn't have made the payments, but I would surely have tried to help her get her act together. I think she may have remarried as much as a couple of years ago.

Error #1 shows as a default, and error #2 elevates my debt load and shows me as a slow payer. That is why my score is so low.

Now my question: Is there any way I can get this negative information off my credit report? How?

I do know that there are scams out there that claim they can repair credit for exhorbitant fees. Are any of those honest, ethical businesses? How do they do their thing, if at all?

 

[KM2]

Re: Credit "repair"?

I don't think the credit repair places can help, they generally sell a service that renegotiaties the cc balances and interest rates for a monthly fee. Helps only people who can't keep up and make only minimum payments. Gets them on a 3-5 year payment plan and is a negative on your credit score.

The cc settlement will disappear from your credit score in a few years. Things can't stay on forever it's the law. I think it's 7 years from the settlement.

I would try to get your name off the mortgage. It could be a negative in your credit score for a long time and they will come after you instead of foreclose. She is either really careless with her bill paying or, and more likely living on the edge and is only one negative event from foreclosure. Contact the bank to see if they can/will remove you or convince her to refinance without you. You would be in the clear if she sold the house which may be an option.

Credit scores work kind of funny, they have nothing to do with being financial smart. They only measure how well you use credit. Example: Not having balances to make steady payments hurts your score. Having multiple cards with balances (not at the max) and making timely payments is good for your score but not financially smart.

681 isn't bad at all and I don't think you will have any problems getting the loan(s) at close to the best rates available currently.

 

[athiker]

Re: Credit "repair"?

That's a real bummer but I would concentrate on the mortgage as it sounds like it is still outstanding.

The bank has not contacted me about any of those events. I wouldn't have made the payments, but I would surely have tried to help her get her act together. I think she may have remarried as much as a couple of years ago.

If you actually cosigned that mortgage is as much yours as it is hers! Did you get on the title as well as security?...or are you solely on the note? It doesn't matter as far as your liablity goes (though I'm not an attorney) but you may have some more leverage to negotiate with the lady if you are on title. You also may have rights to any profits on sale...this is IF you are on title.

As mentioned above this is a serious situation that could haunt you for a looong time if this mortgage is ongoing. Do what you can to get her refinanced, etc. Contact the lender and ask for options/suggestions, but I doubt they will let you off the note if they have had issues in the past w/ late payments. BTW her being remarried or not means nothing to the lender or your situation (unless maybe she is your ex-wife...but I doubt it). The mortgage/note are simply legal documents spelling out who pays who how much. I repeat, if you cosigned the note it is as much yours as it is hers and you need to treat it as such if you want to protect/improve your credit score. In fact if that house burns down, is blown away or flooded by a hurricane and she has let her insurance lapse, YOU will still owe the outstanding balance on that note even if the house ceases to exist!!!


The credit card thing is pretty much over and done with. I doubt it is affecting your score much after 8 years. When was it actually settled for 60% on the dollar? Be careful re: contact or any new partial payments re: that though, it can be considered as bringing a debt current and restarting the clock. This usually applies w/ non-negotiated settlement collections though. (EDIT: Sorry, after rereading your post, I see it's probably been only 3 years...so you have a ways to go on that one too...I've heard the 7 year # too.)

Good luck.

 

[tommays]

Re: Credit "repair"?

The honest ones (IF THERE ARE ANY) will tell you that can NOT remove true info


Both 1 and 2 would seem to be correct with #1 allmost like a bankruptcy and #2 still giveing you bad reports


I watch a trust for my 2 handicapped brothers there bad spending habits have come to my door many times because of that one trust fund with are 3 names on it

One brothers gas card help up a home sale and took 2 years to get off my record



Tommays

 

[Reel Poor]

Re: Credit "repair"?

Something else that will hurt your credit score is high credit limits on your credit cards, and if you have multiple cards with high limits that will really hit hard. You can request lower limits on your cards which will help, and also cancel any card accounts that you don't use. Drop the limit(s) to the dollar amount, or near the dollar amount, you use monthly. Keep in mind that if you need a higher limit for some reason the credit card companies can increase your limit again with a simple phone call. The reason this affects your credit score is because this is an open line of credit.

 

[JB]

Re: Credit "repair"?

Thanks, gents. I really appreciate your wisdom on this.

I will go to the bank tomorrow to see what can be done to minimize the damage from the mortgage thing.

 

[Vlad D Impeller]

Re: Credit "repair"?

Low credit scores also determine ones insurance premium.

 

[Drowned Rat]

Re: Credit "repair"?

Most items stay on your report for 7 years from the last event. Bankruptcies and settlements stay on there for a whopping 10 years. That is to say, that's how long they have to stay on there. Sometimes you have to ask to get them removed even after that time has elapsed.

 

[Scaaty]

Re: Credit "repair"?

by co-signing a mortgage. I have not seen or spoken to her in years but the credit report shows a $33K balance and numerous events of 90 and 120 day late payments. The bank has not contacted me about any of those events.

JB, you need to go to this bank and get this straightened out...this is probably the majority of the low score. Then get it settled with all three credit firms

 

[bruceb58]

Re: Credit "repair"?

...and also cancel any card accounts that you don't use. Drop the limit(s) to the dollar amount, or near the dollar amount, you use monthly.

These are the last things you would want to do.

Credit scoring models look at the following: Total amount of debt on credit cards and revolving accounts divided by the total amount of debt available on those accounts.

 

[rwise]

Re: Credit "repair"?

JB it is time for her to refinance the home, get your name off of it! She (most likeley) is just having a hard time making ends meat (or is it meet) besides maybe if she has hooked up with a new guy they can refi it and get a lower rate (right not with being behind), sounds like she is trying

 

[SS MAYFLOAT]

Re: Credit "repair"?

JB, here is something that I learned about a couple of months ago. This is something that is kept hush hush among creditors and they will not let the borrower know. It is not in any contract a borrower will sign.

It is called a "Universal Credit Agreement" (or something of that sort). What this does is if a default is on the loan,(her being late on the payments) ALL of the other creditors can default on that particular late payment. So basically, if you miss on a payment, it can cause all of the other loans be considered in default as well. This is what allows them to legally jack all the intrest rates up on all the other loans as well.

I'm in the credit counseling thing right now and still have 3 more years to go. After they are paid off,,,,,,,NO MORE, not even one. Everyone complains about the gas companies ripping us off,,,,,,,,,,The lending institutions are 5 times as bad, but nothing seems to be done since too many hands are deep in the politicans pockets. Legalized loan sharks is what I call them.

By the time I pay off my cards, all the things I bought actually cost me 10 times as much. Yeah that is real good for our economy,,,,,,,,I know there are lots of products that I could have bought with that money to help keep people working.

 

[BF]

Re: Credit "repair"?

Bummer... As much as I'm not a fan of them in general, you might want to talk to a lawyer to see if you have any options for getting yourself removed as a co-signer, or if you can do anything to reduce your liability. My guess is that she will not be anxious to re-do her mortgage, since she's been late paying, re-financing might mean she'd get a less favorable rate if she had to do it again now. Also, there will be a penalty fee for re-doing the mortgage before it's time. If she has other financial issues (card debt etc) it could be that she'd have a hard time getting a mortgage approval at all unless she can get a new co-signer (?). Perhaps you could offer to pay any penalty fees that it would cost her to get a new mortgage now? A lawyer might think that was an awful idea to open up a connection between your wallet and her finances (?). Are you off the hook as co-signer when the mortgage comes up for re-signing, or is does the co-signing apply for the whole amortization period? If the mortgage is coming up soon anyway, and you'd be off the hook, maybe you'd be better off to let sleeping dogs lie and not remind her that you're also on the hook for her mortgage.... depending on her personality/situation, her payments might get even slower (or cease altogether).

A question I'd ask a lawyer, is what would happen if I keel over tomorrow? Would the bank be looking for repayment of this mortgage out of my estate? That could be an unhappy surprise for your kin.

Anyway, it's too bad that your helpful intentions have caused you grief. Hopefully you can find an "exit strategy" to make this a historical thing. In the meantime, I'd definitely be trying to make sure my butt was covered as best as possible.

Edit----

Another thought... What was the term of the original mortgage? Around here the "long" version is 5 years (even if the amortization is longer). Is it possible that she re-did the mortgage some time ago (back in '03 or '05?) and that the bank never sought your signature?? If so, then you might have some recourse to have that debt removed from your credit record from that point forward.

 

[Bob_VT]

Re: Credit "repair"?

A very worthwhile link that I found. This is a .gov link (okay I know many people don't trust the Gov't )

http://ftc.gov/bcp/conline/edcams/credit/ycr_free_reports.htm

It is not full of the garbage advertising and has good links to look at.

 

[Tail_Gunner]

Re: Credit "repair"?

Just find yourself a credit union, while many bank's pretend to be understanding, intrest rate's and score's are how they make money. The slow mortage is done almost nothing can be done there and the card should be dropping any day, one thing you can do is go to www.freeanualcreditreport.com get a free copy and challenge both bad item's, the reporting agency's have 30 day's to respond, now if they dont get it done in that time the agency just drop's it off......Human error happen's alot youd be surprised..

here's a link

http://www.ftc.gov/bcp/conline/edcams/credit/ycr_free_reports.htm

 

[KRS]

Re: Credit "repair"?

Just find yourself a credit union, while many bank's pretend to be understanding, intrest rate's and score's are how they make money. [/URL]

I'm sure the credit union will report slow payments too, so that won't help at all. And, what's wrong with making money anyway? Aren't most people in business to make money? Don't you enjoy not having to open your wallet and pay cash for everything? Isn't your debit card convenient? Heaven forbid you pay for that service Anyway....

As for another suggestion to "go to the bank and straighten this thing out", there's nothing to straighten out, as you stated you co-signed for a loan and late payments have been made, therefore late payments were reported.

I would suggest requesting that she refi the property.

Too bad on the settled for less than the full balance.... there's no way to get rid of things like that other than time. 7-10 years.

As someone suggested and another person countered... don't go close everything and reduce your limits.... that will also reflect as a negative credit event.

Just ride it out, no "repair" company can remove valid credit history.

KRS

 

[athiker]

Re: Credit "repair"?

Here's a decent article on the subject w/ links to related articles:

http://articles.moneycentral.msn.co...ating/isthereastatuteoflimitationsondebt.aspx

 

[ezbtr]

Re: Credit "repair"?

I actually got some great reductions through a credit union, I did a refi and will do another soon, I saved at least 40% in interest L)

 

[kenmyfam]

Re: Credit "repair"?

It is basically on your record for 7 years. Credit card reporting is usually done by what your credit limit is compared to what your balance owing is.

 

[Tail_Gunner]

Re: Credit "repair"?

I'm sure the credit union will report slow payments too, so that won't help at all. And, what's wrong with making money anyway? Aren't most people in business to make money? Don't you enjoy not having to open your wallet and pay cash for everything? Isn't your debit card convenient? Heaven forbid you pay for that service Anyway....

As for another suggestion to "go to the bank and straighten this thing out", there's nothing to straighten out, as you stated you co-signed for a loan and late payments have been made, therefore late payments were reported.

I would suggest requesting that she refi the property.

Too bad on the settled for less than the full balance.... there's no way to get rid of things like that other than time. 7-10 years.

As someone suggested and another person countered... don't go close everything and reduce your limits.... that will also reflect as a negative credit event.

Just ride it out, no "repair" company can remove valid credit history.

KRS

KRS plz this is a public forum for boater's, when one post's here it's meant for the betterment to fellow boater's, Bank's cannot and will not compete with most credit union's that do not use risk mgmt or beacon scores to score a customer, plz do not turn this into a oil thread.......


Ummm