Financing need help finding financing with damage credit

[RoyJackson]

I'm no expert, but have done a lot of research and know my own credit history and score.

One thing to remember is the credit score has nothing to do with your income. The credit agencies do not know how much you make. The scores are about your history of borrowinig and paying it back.

Assumptions can be made about income based on how much you have borrowed, but there are no income reporting.

The agencies that loaned you the money on the other hand know what you make... and use that along with your credit score to make a lending decision.

And, since the credit reporting agencies are required by law to give you a free report annually, it's a good idea to get those reports.
Credit reports can have errors, but they are not responsible for correction of those errors...the consumer is.
Another thing...I don't like it and think it should be illegal, but potential employers can review your credit scores (you have to authorize it, but it's one of those things you're basically required to do). It'd be a real bummer to lose out on a job offer because of erroneous data on your credit reports. Sooner or later, those agencies will be sued (if they haven't lready) for negligience on this, but until then you're on your own.

 

[EddieWalker]

You sure? I co-signed a loan for one of my boys a year or so ago and was surprised how low my score was. Why? Because I don't owe anyone anything! Haven't for a long time. The very nice lady at the credit union my son joined explained with no recent history of being in debt I was considered a risk:confused2:
I've also heard canceling cards drives your score down. Don't know for sure on that one. BTW I put $2000 or more on my credit cards every month but also pay them in full every month, apparently that also counts against me- again:confused2:

Oh yeah- when I co-signed for my son my interest free Kubota 3 year loan did not show up in my credit profile, so it didn't help build my rating at all

Credit scores are a funny thing with all sorts of experts out there who make a living on trying to understand it. Dept to income ratios, payment history and total outstanding debt are the basice to my understanding. While establlishing credit and getting a good score as a young person an be challenging, fixing a bad score is even harder. Paying things off, making payments on time and paying more then the minimum are huge. The number of cards you have, even if zero will also affect your score.

Combining all the cards into one card is a trick that those so called help you services do, or paying off the cards and getting on a conventional loan also helps raise your score.

I was at 780 two years ago. I've paind off a loan since then and just taken out another loan that I'm paying almost twice the minimum and will have it paid off in two years or so. My goal is to get over 800, which I know I'm close, but just checking your score will lower it a few points, and since I don't need to know my score, I havn't checked to see where it's at right now.


Eddie

 

[smstonypoint]

Another thing...I don't like it and think it should be illegal, but potential employers can review your credit scores (you have to authorize it, but it's one of those things you're basically required to do). It'd be a real bummer to lose out on a job offer because of erroneous data on your credit reports. Sooner or later, those agencies will be sued (if they haven't lready) for negligience on this, but until then you're on your own.

I think I have to disagree with Roy on this. I think credit history could provide useful information to an employer. Other things being equal (education, experience, etc.), I would rather hire an individual with a good credit history than one with a bad one.

Steve

 

[smstonypoint]

But who cares about a credit score unless you want to borrow money..

Even debt-free folks should care!!! Some auto and homeowners insurance companies check credit scores and your premiums can be affected by your score. This thread has served as a reminder for me to check my free report, but the last time I did check it, there had been inquiries from my auto insurance company.

 

[timswi]

I think I have to disagree with Roy on this. I think credit history could provide useful information to an employer. Other things being equal (education, experience, etc.), I would rather hire an individual with a good credit history than one with a bad one.

Steve

I fully agree, especially when you have to be bonded. Insurance companies also check credit scores. Lower scorers tend to have more frequent claims. There was a very large study done on this. So with a 600 FICO, your car insurace rates could be higher than someone else with an 800 score.

I do Credit Risk and I can say that there is no gurantee that someone with a 780 FICO won't default on a loan, but someone with a 520 score is almost a guaranteed risk. We have studied this stuff over decades and it proves true no matter how you look at it.

Normal shopping inquiries (mortgages, lendingtree, car shopping etc.) don't really harm your score, 50 of them in a month will have some impact.

Closing cards can lower your score. Keep them open and throw them in a drawer with a zero balance. Keep the debt load to a minimum and keep some positive activity and the score will slowly recover.

Personally I like the all cash plan, but that's tough nowadays. Can't buy anything on the internet with greenbacks. Renting a car or a hotel room is nearly impossible, or a least difficult. Ramsey says to use a debit card for this because it has all of the Visa protections. True, but if your debit card gets compromised, your checking account will be emptied and you may not find out until checks start bouncing. True that you are only responsible for the first $50, but your reputation can take a hit locally and you would also be illiquid until you are reimbursed. Plus your checking account would need to be closed and a new one opened.
I'd rather a credit card be hit by a scammer, the only harm to me is the lack of available credit. My checking account is still fine.
Ramsey doesn't think all the way through this issue.

Nothing wrong with credit cards if you pay them off every month. They can be very dangerous otherwise.

Ramsey is pretty much on target but some of his income calculations depart from reality. He doesn't factor in the 8 pages of deductions on a pay advise. I barely bring home 50% of my gross pay.

 

[brucew44guns]

First post, can't spell and he wants to borrow more money before paying off his current debt? Either a scam or he just doesn't get it.

Pay off your bills and your credit score will go up. Then cancel the cards except for one that you can use for an emergancy. With the changes that have been done to the credit card companies, I'm sure your paying close to 20% in interest.

The tractor can wait.

Eddie

+1 Good advise. Being debt free, is like a prison sentence that got cancelled, you will really enjoy a beat up doggy old tractor if you OWN the tractor and have some change jingling in your pocket.

 

[rjkobbeman]

And, since the credit reporting agencies are required by law to give you a free report annually, it's a good idea to get those reports.
Credit reports can have errors, but they are not responsible for correction of those errors...the consumer is.
Another thing...I don't like it and think it should be illegal, but potential employers can review your credit scores (you have to authorize it, but it's one of those things you're basically required to do). It'd be a real bummer to lose out on a job offer because of erroneous data on your credit reports. Sooner or later, those agencies will be sued (if they haven't lready) for negligience on this, but until then you're on your own.

I think I have to disagree with Roy on this. I think credit history could provide useful information to an employer. Other things being equal (education, experience, etc.), I would rather hire an individual with a good credit history than one with a bad one.

Steve

Roy didn't say it was not useful information -- of course it is -- but I agree with him. I don't think it should be allowed.

Just because something is usefull or beneficial to one party does not make it right!

 

[smstonypoint]

Nothing wrong with credit cards if you pay them off every month. They can be very dangerous otherwise.

Finally, an expert. I'm not so sure that you should have admitted that as you may be deluged with questions, so let me try to beat the rush.

I use my credit card for the reward points and always transfer money from my checking account to my credit card account before receiving my credit card bill. Thus, I always show a $0 balance due. I think I remember Clark Howard saying that having a small balance on the bill and then paying that off could increase a FICO score. Is that true?

I don't have any debt, but I do have auto and property insurance, and I would like to make sure my credit score keeps me in good standing on that front.

Steve

 

[timswi]

Finally an expert. I'm not so sure that you should have admitted that as you may be deluged with questions, so let me try to beat the rush.

I use my credit card for the reward points and always transfer money from my checking account to my credit card account before receiving my credit card bill. Thus, I always show a $0 balance due. I think I remember Clark Howard saying that having a small balance on the bill and then paying that off could increase a FICO score. Is that true?

I don't have any debt, but I do have auto and property insurance, and I would like to make sure my credit score keeps me in good standing on that front.

Steve

I don't know if I'm an "expert" but I have been in this business for 20 years...The only people who truly understand the credit score black box is Fair Issac who have proprietary formulas that generate this number via data from the bureaus.

Generally, your balance is reported by the bank at the end of the month. So if the balance carries over this period a balance will show even though you pay it off prior to it's due date. I don't know if every financial institution sends the add/update record at month end, but my guess is that most do.

Activity should show on your bureau for that account regardless.Never experiminted with your specific activity though.

Keep in mind that raising your score is a marathon...Trashing it is a sprint.

Pull your free bureau and look at that credit item and see what it looks like. You can do this once a year. I forget the name of the site, but be careful of the ones that make you sign up for credit monitoring or you'll be paying. I think the site is something like freeannualcreditreport or something like that...Again, be careful.

Let me know what you see.

 

[smstonypoint]

I don't know if I'm an "expert" but I have been in this business for 20 years...

That makes you an expert to me.

Thanks for the useful information. I'm overdue in checking my free report so I will followup on your info ASAP.

The free site is https://www.annualcreditreport.com/cra/index.jsp

Thanks again.

Steve