OFFICIAL NT Credit Thread

[elnino4530]

There have been a ton of threads on NT lately about building credit, checking scores, etc so I thought we could make a dedicated thread. Ask questions, share advice, and participate! I'll try to update this main post with questions people have and the answers that are given

Basics
FICO scores (used by lenders) range from 300-850. Usually anything below 680 is a less than average score, while 720 and above is considered "good"

Checking/Monitoring Your Score
Annual Credit Report - Sponsored by the three main credit bureaus (Equifax, TransUnion, Experian) this site allows you access to ONE free credit report per year

Credit Karma - This site allows you to track your outstanding debt, your TransRisk credit score, and also how you compare to others in the United States

How Your Score Is Determined

[h3]Payment History[/h3]

• Account payment information on specific types of accounts (credit cards, retail accounts, installment loans, finance company accounts, mortgage, etc.)
• Presence of adverse public records (bankruptcy, judgements, suits, liens, wage attachments, etc.), collection items, and/or delinquency (past due items)
• Severity of delinquency (how long past due)
• Amount past due on delinquent accounts or collection items
• Time since (recency of) past due items (delinquency), adverse public records (if any), or collection items (if any)
• Number of past due items on file
• Number of accounts paid as agreed

[h3]Amounts Owed[/h3]

• Amount owing on accounts
• Amount owing on specific types of accounts
• Lack of a specific type of balance, in some cases
• Number of accounts with balances
• Proportion of credit lines used (proportion of balances to total credit limits on certain types of revolving accounts)
• Proportion of installment loan amounts still owing (proportion of balance to original loan amount on certain types of installment loans)

[h3]Length of Credit History[/h3]

• Time since accounts opened
• Time since accounts opened, by specific type of account
• Time since account activity

[h3]New Credit[/h3]

• Number of recently opened accounts, and proportion of accounts that are recently opened, by type of account
• Number of recent credit inquiries
• Time since recent account opening(s), by type of account
• Time since credit inquiry(s)
• Re-establishment of positive credit history following past payment problems

[h3]Types of Credit Used[/h3]

• Number of (presence, prevalence, and recent information on) various types of accounts (credit cards, retail accounts, installment loans, mortgage, consumer finance accounts, etc.)

FAQ

 

[elnino4530]

There have been a ton of threads on NT lately about building credit, checking scores, etc so I thought we could make a dedicated thread. Ask questions, share advice, and participate! I'll try to update this main post with questions people have and the answers that are given

Basics
FICO scores (used by lenders) range from 300-850. Usually anything below 680 is a less than average score, while 720 and above is considered "good"

Checking/Monitoring Your Score
Annual Credit Report - Sponsored by the three main credit bureaus (Equifax, TransUnion, Experian) this site allows you access to ONE free credit report per year

Credit Karma - This site allows you to track your outstanding debt, your TransRisk credit score, and also how you compare to others in the United States

How Your Score Is Determined

[h3]Payment History[/h3]

• Account payment information on specific types of accounts (credit cards, retail accounts, installment loans, finance company accounts, mortgage, etc.)
• Presence of adverse public records (bankruptcy, judgements, suits, liens, wage attachments, etc.), collection items, and/or delinquency (past due items)
• Severity of delinquency (how long past due)
• Amount past due on delinquent accounts or collection items
• Time since (recency of) past due items (delinquency), adverse public records (if any), or collection items (if any)
• Number of past due items on file
• Number of accounts paid as agreed

[h3]Amounts Owed[/h3]

• Amount owing on accounts
• Amount owing on specific types of accounts
• Lack of a specific type of balance, in some cases
• Number of accounts with balances
• Proportion of credit lines used (proportion of balances to total credit limits on certain types of revolving accounts)
• Proportion of installment loan amounts still owing (proportion of balance to original loan amount on certain types of installment loans)

[h3]Length of Credit History[/h3]

• Time since accounts opened
• Time since accounts opened, by specific type of account
• Time since account activity

[h3]New Credit[/h3]

• Number of recently opened accounts, and proportion of accounts that are recently opened, by type of account
• Number of recent credit inquiries
• Time since recent account opening(s), by type of account
• Time since credit inquiry(s)
• Re-establishment of positive credit history following past payment problems

[h3]Types of Credit Used[/h3]

• Number of (presence, prevalence, and recent information on) various types of accounts (credit cards, retail accounts, installment loans, mortgage, consumer finance accounts, etc.)

FAQ

 

[sloanboy]

1.how much will my credit score increase when i pay my student off and early?
2.how bad is medical loan debt?
3.Are there banks that dont look at medical loans mines has a 1,000 dollar limit
4.will paying 5 year old debt (to a bank) make a difference now?

 

[sloanboy]

1.how much will my credit score increase when i pay my student off and early?
2.how bad is medical loan debt?
3.Are there banks that dont look at medical loans mines has a 1,000 dollar limit
4.will paying 5 year old debt (to a bank) make a difference now?

 

[tony montana]

If you pay on time how long does it usualy take to get a score of 720 or higher ?

 

[tony montana]

If you pay on time how long does it usualy take to get a score of 720 or higher ?

 

[lilpro4u]

Originally Posted by sloanboy

1.how much will my credit score increase when i pay my student off and early?
Probably not much if any increase occurs at all (credit is funny, your score could actually drop depending on the rest of your report) But don't worry about your score after paying off a SL, it will recoup.
2.how bad is medical loan debt?
If it was "charged off" meaning the Hospital, Clinic, Doctor, sold the debt to the highest bidding debt collector, it's pretty bad for your report. It's reflecting negatively to whoever views your report and its also keeping your score low.
3.Are there banks that dont look at medical loans mines has a 1,000 dollar limit
Firstly, there is no such thing as a "medical loan".. If you owed a Hospital money, you owe them money. They never extended you a loan for their services. They give you a grace period of 30-120 days usually before they try to sell whatever amount you owe them to someone else (sometimes for pennies on the dollar) So unless you made arrangements with that specific hospital, a "loan" is not what you have.
4.will paying 5 year old debt (to a bank) make a difference now?
NO, unless they are threatening to garnish your wages, tax returns etc.. Or you get summoned to court do not pay it out right. There are a lot of ways of handling this debt so it won't reflect on your credit report negatively. Negotiate a lower settlement, "Pay for delete" (pay them on a written promise that they will stop reporting that account to the credit bureaus)

 

[lilpro4u]

Originally Posted by sloanboy

1.how much will my credit score increase when i pay my student off and early?
Probably not much if any increase occurs at all (credit is funny, your score could actually drop depending on the rest of your report) But don't worry about your score after paying off a SL, it will recoup.
2.how bad is medical loan debt?
If it was "charged off" meaning the Hospital, Clinic, Doctor, sold the debt to the highest bidding debt collector, it's pretty bad for your report. It's reflecting negatively to whoever views your report and its also keeping your score low.
3.Are there banks that dont look at medical loans mines has a 1,000 dollar limit
Firstly, there is no such thing as a "medical loan".. If you owed a Hospital money, you owe them money. They never extended you a loan for their services. They give you a grace period of 30-120 days usually before they try to sell whatever amount you owe them to someone else (sometimes for pennies on the dollar) So unless you made arrangements with that specific hospital, a "loan" is not what you have.
4.will paying 5 year old debt (to a bank) make a difference now?
NO, unless they are threatening to garnish your wages, tax returns etc.. Or you get summoned to court do not pay it out right. There are a lot of ways of handling this debt so it won't reflect on your credit report negatively. Negotiate a lower settlement, "Pay for delete" (pay them on a written promise that they will stop reporting that account to the credit bureaus)

 

[Retroballer]

i need to consolidate my loans

 

[Retroballer]

i need to consolidate my loans

 

[that kid daniel]

my credit is horrible. It's probably in the 400's. First step to get it back to normal is to pay my debts, correct?

 

[that kid daniel]

my credit is horrible. It's probably in the 400's. First step to get it back to normal is to pay my debts, correct?

 

[elnino4530]

Originally Posted by Tony Montana

If you pay on time how long does it usualy take to get a score of 720 or higher ?

Getting to the 720 mark will take a different amount of time depending on a few factors. Your current credit score, types of credit you currently have, and also the amount of debt you carry.

 

[elnino4530]

Originally Posted by Tony Montana

If you pay on time how long does it usualy take to get a score of 720 or higher ?

Getting to the 720 mark will take a different amount of time depending on a few factors. Your current credit score, types of credit you currently have, and also the amount of debt you carry.

 

[sloanboy]

Originally Posted by lilpro4u

Originally Posted by sloanboy

1.how much will my credit score increase when i pay my student off and early?
Probably not much if any increase occurs at all (credit is funny, your score could actually drop depending on the rest of your report) But don't worry about your score after paying off a SL, it will recoup.
2.how bad is medical loan debt?
If it was "charged off" meaning the Hospital, Clinic, Doctor, sold the debt to the highest bidding debt collector, it's pretty bad for your report. It's reflecting negatively to whoever views your report and its also keeping your score low.
3.Are there banks that dont look at medical loans mines has a 1,000 dollar limit
Firstly, there is no such thing as a "medical loan".. If you owed a Hospital money, you owe them money. They never extended you a loan for their services. They give you a grace period of 30-120 days usually before they try to sell whatever amount you owe them to someone else (sometimes for pennies on the dollar) So unless you made arrangements with that specific hospital, a "loan" is not what you have.
4.will paying 5 year old debt (to a bank) make a difference now?
NO, unless they are threatening to garnish your wages, tax returns etc.. Or you get summoned to court do not pay it out right. There are a lot of ways of handling this debt so it won't reflect on your credit report negatively. Negotiate a lower settlement, "Pay for delete" (pay them on a written promise that they will stop reporting that account to the credit bureaus)

3. sorry i ment do all banks look at medical debts mines has a 1,000 debt limit so they wont give me any loans or credit cards

 

[1c3m4m]

What are some good ways to keep a good credit and for someone thats just starting how long will i have to keep a good credit to get a good score? im trying to buy a car and hopefully my own place in the near future

 

[1c3m4m]

What are some good ways to keep a good credit and for someone thats just starting how long will i have to keep a good credit to get a good score? im trying to buy a car and hopefully my own place in the near future

 

[sloanboy]

Originally Posted by lilpro4u

Originally Posted by sloanboy

1.how much will my credit score increase when i pay my student off and early?
Probably not much if any increase occurs at all (credit is funny, your score could actually drop depending on the rest of your report) But don't worry about your score after paying off a SL, it will recoup.
2.how bad is medical loan debt?
If it was "charged off" meaning the Hospital, Clinic, Doctor, sold the debt to the highest bidding debt collector, it's pretty bad for your report. It's reflecting negatively to whoever views your report and its also keeping your score low.
3.Are there banks that dont look at medical loans mines has a 1,000 dollar limit
Firstly, there is no such thing as a "medical loan".. If you owed a Hospital money, you owe them money. They never extended you a loan for their services. They give you a grace period of 30-120 days usually before they try to sell whatever amount you owe them to someone else (sometimes for pennies on the dollar) So unless you made arrangements with that specific hospital, a "loan" is not what you have.
4.will paying 5 year old debt (to a bank) make a difference now?
NO, unless they are threatening to garnish your wages, tax returns etc.. Or you get summoned to court do not pay it out right. There are a lot of ways of handling this debt so it won't reflect on your credit report negatively. Negotiate a lower settlement, "Pay for delete" (pay them on a written promise that they will stop reporting that account to the credit bureaus)

3. sorry i ment do all banks look at medical debts mines has a 1,000 debt limit so they wont give me any loans or credit cards

 

[2seatport]

The fact that my score lowers if I pay off my student loans early makes me feel like the whole chase for a good credit score is just one big scam and is really about "rewarding" those who have demonstrated a history of willingness to pay their banks various forms of interest....the "reward" being them letting you take out even bigger loans that make them more money??

I have a good income (70k %!+) lined up upon graduation and if i saved for a few years and wanted to buy a house, couldn't I just throw down >20% up front and use my parents offer to use their house equity as collateral with the credit union they have been with for 15 years and be fine, save a few fractions of a point on my mortgate rates?

someone educate me

 

[2seatport]

The fact that my score lowers if I pay off my student loans early makes me feel like the whole chase for a good credit score is just one big scam and is really about "rewarding" those who have demonstrated a history of willingness to pay their banks various forms of interest....the "reward" being them letting you take out even bigger loans that make them more money??

I have a good income (70k %!+) lined up upon graduation and if i saved for a few years and wanted to buy a house, couldn't I just throw down >20% up front and use my parents offer to use their house equity as collateral with the credit union they have been with for 15 years and be fine, save a few fractions of a point on my mortgate rates?

someone educate me

 

[BANLEU]

lilpro4u wrote:

---

sloanboy wrote:

---

1.how much will my credit score increase when i pay my student off and early?
Probably not much if any increase occurs at all (credit is funny, your score could actually drop depending on the rest of your report) But don't worry about your score after paying off a SL, it will recoup.



  
1. Paying off your student loan will definitely increase your credit score because some companies like Equifax count student loans as part of your credit utilization ratio. Therefore, paying off your student loans will obviously serve to lower your utilization ratio and increase your score, but that is regardless of whether you pay it off early or not.  

The fact that my score lowers if I pay off my student loans early makes me feel like the whole chase for a good credit score is just one big scam and is really about "rewarding" those who have demonstrated a history of willingness to pay their banks various forms of interest....the "reward" being them letting you take out even bigger loans that make them more money??


Paying your loans off early is often the opposite of showing a willingness to pay banks a form of interest. That is because often when you make payments above what is requiredit goes straight to the principle and interest is not charged on the payment that exceeds the required amount. My car loan, for example, is $300 a month, so anything I make over that goes directly towards the principle and is not charged interests. The same applies to student loans and is especially true if you start paying them while they are still in deferrment.

I have a good income (70k %!+) lined up upon graduation and if i saved for a few years and wanted to buy a house, couldn't I just throw down >20% up front and use my parents offer to use their house equity as collateral with the credit union they have been with for 15 years and be fine, save a few fractions of a point on my mortgate rates?
http://www.bankrate.com/finance/mortgages/mortgage-points.aspx

Look at that link it teaches you about points. But to answer your question, if the mortgage crisis has taught us anything it is not to use equity to get a line of credit because when housing prices drop you will be under water in your house. 

What are some good ways to keep a good credit and for someone thats just starting how long will i have to keep a good credit to get a good score? im trying to buy a car and hopefully my own place in the near future
1. Don't use more than 20% of your available credit
2. It can take up to 3 years to build a good score because anything shorter than that isn't significant enough to create a good credit history.

 

[BANLEU]

lilpro4u wrote:

---

sloanboy wrote:

---

1.how much will my credit score increase when i pay my student off and early?
Probably not much if any increase occurs at all (credit is funny, your score could actually drop depending on the rest of your report) But don't worry about your score after paying off a SL, it will recoup.



  
1. Paying off your student loan will definitely increase your credit score because some companies like Equifax count student loans as part of your credit utilization ratio. Therefore, paying off your student loans will obviously serve to lower your utilization ratio and increase your score, but that is regardless of whether you pay it off early or not.  

The fact that my score lowers if I pay off my student loans early makes me feel like the whole chase for a good credit score is just one big scam and is really about "rewarding" those who have demonstrated a history of willingness to pay their banks various forms of interest....the "reward" being them letting you take out even bigger loans that make them more money??


Paying your loans off early is often the opposite of showing a willingness to pay banks a form of interest. That is because often when you make payments above what is requiredit goes straight to the principle and interest is not charged on the payment that exceeds the required amount. My car loan, for example, is $300 a month, so anything I make over that goes directly towards the principle and is not charged interests. The same applies to student loans and is especially true if you start paying them while they are still in deferrment.

I have a good income (70k %!+) lined up upon graduation and if i saved for a few years and wanted to buy a house, couldn't I just throw down >20% up front and use my parents offer to use their house equity as collateral with the credit union they have been with for 15 years and be fine, save a few fractions of a point on my mortgate rates?
http://www.bankrate.com/finance/mortgages/mortgage-points.aspx

Look at that link it teaches you about points. But to answer your question, if the mortgage crisis has taught us anything it is not to use equity to get a line of credit because when housing prices drop you will be under water in your house. 

What are some good ways to keep a good credit and for someone thats just starting how long will i have to keep a good credit to get a good score? im trying to buy a car and hopefully my own place in the near future
1. Don't use more than 20% of your available credit
2. It can take up to 3 years to build a good score because anything shorter than that isn't significant enough to create a good credit history.

 

[edcotalivesagain]

Fellas can I get thoughts/opinions - in a tough spot right now.

Got 6k on a credit card. Minimum monthly payment jumped significant after the first of the year. Haven't made a payment since and get constant calls throughout day from their 800 number, which I just ignore. I expect to be able to pay it off completely by end of summer. Question is - do I continue to ignore, or do I make contact with them and inform them of this (guessing they'll close my account as a result - which from what I gathered is no bueno), or do I opt into one of their payment plans which lowers the monthly payment in half (which def closes my account as a result). Basically is my credit score/reputation in the same toilet now as it would be if they close my account? Had the card since 2006. I also have four other cards that I've had for over 3 years each and have manageable minimum payments.

Message for others out of this - Be responsible for your actions.  

 

[edcotalivesagain]

Fellas can I get thoughts/opinions - in a tough spot right now.

Got 6k on a credit card. Minimum monthly payment jumped significant after the first of the year. Haven't made a payment since and get constant calls throughout day from their 800 number, which I just ignore. I expect to be able to pay it off completely by end of summer. Question is - do I continue to ignore, or do I make contact with them and inform them of this (guessing they'll close my account as a result - which from what I gathered is no bueno), or do I opt into one of their payment plans which lowers the monthly payment in half (which def closes my account as a result). Basically is my credit score/reputation in the same toilet now as it would be if they close my account? Had the card since 2006. I also have four other cards that I've had for over 3 years each and have manageable minimum payments.

Message for others out of this - Be responsible for your actions.  

 

[witnesskb24]

I have absolutely no credit. What is a good way to go about building some? I don't really want to get a credit card, but I have tried for one at best buy and got denied twice (no prior credit being the reason) and I can't even finance a motorcycle without a cosigner. Any good ways to build it? I have enough money to cover most things I want so I'd like to avoid a credit card but I'm realizing that might be the only route