repairing credit

[Anonymous]

Get him over to the credit forums on myfico.

He'll find better help there.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Canceling a credit card can also hurt you if it was an older card. Having it on your credit history shows you've been that much more credit worthy for that much longer. Also, as PP said, you want to keep your ratio of total credit available to outstanding debt on those credit cards low. I think they like to see that you only use 1/4 of your available credit. So if you have Card A with an available limit of $4000, and B with an available limit of $8000, and you regularly charge $3000 or so to Card B, and never use Card A and decide to cancel it, that's bad bc you've decreased your total available credit by enough to affect your total ratio. N you're better off keeping Card A open to keep that ratio better. You're even better off if you use Card A too every once in a while for a small purchase and pay it off full and on time, bc that will be another instance of responsible use, and that will increase your score.

Very helpful. thanks.

Except it's not all correct. Positive tradelines stay on your report for TEN years after you close them. Also, the magic number for utilization is 10%.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Canceling a credit card can also hurt you if it was an older card. Having it on your credit history shows you've been that much more credit worthy for that much longer. Also, as PP said, you want to keep your ratio of total credit available to outstanding debt on those credit cards low. I think they like to see that you only use 1/4 of your available credit. So if you have Card A with an available limit of $4000, and B with an available limit of $8000, and you regularly charge $3000 or so to Card B, and never use Card A and decide to cancel it, that's bad bc you've decreased your total available credit by enough to affect your total ratio. N you're better off keeping Card A open to keep that ratio better. You're even better off if you use Card A too every once in a while for a small purchase and pay it off full and on time, bc that will be another instance of responsible use, and that will increase your score.

Very helpful. thanks.

Except it's not all correct. Positive tradelines stay on your report for TEN years after you close them. Also, the magic number for utilization is 10%.

What are positive tradelines?

[Anonymous]

If the federal laws pertaining to credit repair are used properly, they can be extremely helpful! Nice job here. This is some additional information that I found very helpful http://mycreditlocker.com/

[Anonymous]

Anonymous wrote:

Anonymous wrote:It decreases your credit score because it decreases the available credit you have. I don't think it's a big deal though, if you have a large amount of credit relative to debt, it's not going to make much difference for you. If you only have one credit card and that is the only available credit you have, and you close the account, it could make your score go down.

Aahh. That makes no sense at all but I guess is how this nonsense works.

Fixed it for you.

[Anonymous]

Anonymous wrote:why does cancelling a card hurt your credit? I've never heard that before. I have excellent credit (over 800) and cancel cards periodically. Does it help if you hold onto a card for certain magical period of time and then cancel?

Here is an extreme example....In the boom years, I picked up some easy credit....I had two cards with 50K limits....One was Citi, and one was Bank of America. I never used those cards. The card I used had a 10K limit, and I was carrying a balance of between 5-8K on it.

When the credit crash hit in 2008-2009, banks were trying to limit their exposure. BOA canceled my card because I never used it....Around the same time, Citi put a $100 annual fee, so I canceled it.

Suddenly, I went from less than 10% utilization to 80%. Score dropped from ~800 to about 700. Because of that drop my used credit card max was cut to my current balance. Around that time, I went to borrow some money for a car. My score was down to 640, and I did not qualify for the best rates. That was when I looked into the issue. I was amazed how minimal actions....through no fault of my own, had such a big impact on my "credit worthiness".

I was worried about my next Periodic Review for my security clearance. But they only really care about delinquencies.

FWIW, I did not buy the car then, paid down the 8K owned to the other card, and my score shot up 130 points

[Anonymous]

It takes time, that's all. It'll go back up in time only.Get a new card for him or keep the existing cards if he has any and make sure he pays on time or he has to start all over again.

[Anonymous]

Also, he can help his credit score by reinstating the credit card that caused the problem, using it for a small amount every month and paying it off dutifully. While CC flags can lower your score, if you then continue with the same card but have a clean record going forward, lenders and creditors will often overlook at historical problem if it looks like you cleaned up a problem and you have a reasonable explanation for the problem that shows you were not living beyond your income. Your husband should contact the CC company and say that he has reconsidered and would like to get the card reinstated and explain why the late payments occurred (the fact that they were so regular and scheduled will help). Often a card company that has made a lot of money off a client will reinstate a card if they see that the person is not overspending and has the means to continue paying the card. He should also ask them to lower the available credit to something small, say $1000 or $2000 and that will help his credit score because it will keep the available credit below his monthly income. Then use the card a little each month and pay it off on time.

[Anonymous]

Not doubting your story OP, but credit cards typically don't report late payments to credit bureaus until they are 30 days past due.

In any case, if his credit is shot I agree a secured card like Capital One is a good place to start, assuming he cannot reinstate the card with which he had late payments.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Canceling a credit card can also hurt you if it was an older card. Having it on your credit history shows you've been that much more credit worthy for that much longer. Also, as PP said, you want to keep your ratio of total credit available to outstanding debt on those credit cards low. I think they like to see that you only use 1/4 of your available credit. So if you have Card A with an available limit of $4000, and B with an available limit of $8000, and you regularly charge $3000 or so to Card B, and never use Card A and decide to cancel it, that's bad bc you've decreased your total available credit by enough to affect your total ratio. N you're better off keeping Card A open to keep that ratio better. You're even better off if you use Card A too every once in a while for a small purchase and pay it off full and on time, bc that will be another instance of responsible use, and that will increase your score.

Very helpful. thanks.

Except it's not all correct. Positive tradelines stay on your report for TEN years after you close them. Also, the magic number for utilization is 10%.

What are positive tradelines?

+1.

[Anonymous]

Anonymous wrote:Not doubting your story OP, but credit cards typically don't report late payments to credit bureaus until they are 30 days past due.

In any case, if his credit is shot I agree a secured card like Capital One is a good place to start, assuming he cannot reinstate the card with which he had late payments.

OP here, it was past 30 days. This went on for months before he realized it. He had an auto payment set up, and thought it would cover the payment, then failed to check his account for months. Arghh, it pisses me off just thinking about it.