Credit Score Question

Sanrith Descartes

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My wife checks her credit score every month using the free program. She also pays all of her bills on time. In the last month, her credit score dropped ~25 points because of "late payments". She's completely baffled because she pays everything on time. How can she fight this ding? Her FICO score just dropped under the magic 740 that you need for everything.
A late is marked on her credit score. You need to look at all three and find the late. Then contest it.
 

Tarrant

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You can file a dispute through whatever app you use or directly with the Bureau reporting it. On credit karma you can do it through their app too.
 

Sanrith Descartes

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You can file a dispute through whatever app you use or directly with the Bureau reporting it. On credit karma you can do it through their app too.
Each of the big three has a button that says "file a dispute" or some such. Create a free account on their site and follow the prompts. It takes 2 minutes.
 

Khane

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I would start with finding what is being reported as late and calling that company to try to straighten it out first. If it's not in collections yet they can remove the filing with the credit bureaus.

I had this happen to me with American Express earlier this year and they were able to straighten out directly. However, a 20 point drop is unlikely due to late payments that are sent to collections. If it was already in collections her score would have dropped by at least 100 points (mine had dropped about 170 points from ~820 to ~650 until I got it straightened out )
 

a c i d.f l y

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I would start with finding what is being reported as late and calling that company to try to straighten it out first. If it's not in collections yet they can remove the filing with the credit bureaus.

I had this happen to me with American Express earlier this year and they were able to straighten out directly. However, a 20 point drop is unlikely due to late payments that are sent to collections. If it was already in collections her score would have dropped by at least 100 points (mine had dropped about 170 points from ~820 to ~650 until I got it straightened out )
I would rather the credit bureau do the leg work. They're the ones holding credit agencies accountable for their reporting to them (they're only as good as what's reported), and it creates a paper trail against a company instead of said company just fixing the individual report to said agency.

When you file a dispute with the credit agency (e.g. Experian), they and the company reporting are held liable to investigate and provide results in a legally specified time line, or the credit agency is then required to remove the mark against your record. If you dispute with the issuing credit company directly, they don't have the same requirements or consequences.

Even if you're supposedly late, there's a universal 15 day grace period to account for processing delays, weekends, holidays, etc.

In any case, if you pull your full credit report, you can see exactly which company is showing payments made 30+ days, which you can then dispute.

Disputing pretty much everything on your record that reflects negatively is the first thing any "credit repair" company will do to boost your score. Even if the negative reports are correct, if the credit company can't provide proof to the credit reporting agency in a timely manner, it will be expunged.

I would need to see your credit utilization, payment history, and several other things to understand your score. Constantly utilizing 80%, even if you pay it off at the end of the month, reflects negatively vs. utilizing less than 50% and paying the minimum balance. Don't ask me to explain the logic there.

If you're utilizing in the 80-90% range, and paying off every month, apply for an increase. There's a solid chance you'll get approved. This will help reduce your % utilization report, getting you into the goldilocks zone.
 

Oblio

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How do you actually contest it?

When I was in the Mortgage World I referred all my customers that had any credit issues to Lexington Law, I have never heard a bad thing about them and was thanked more times than I can remember. See Nemesis Nemesis quoted post below from page one.

Step 1
check out a credit repair agency like Credit Repair to Help Fix Credit Scores | Lexington Law
the cost is worth it. you'll be much more likely to get results, way faster than you would otherwise on your own, and with relatively little effort.
 

Xarpolis

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We did one of the free annual credit reports on her, and after a quick glance, I didn't see anything that stuck out. But this is the FICA score that's jumping around, and not one of the main 3. *shrugs* I don't really understand any of this.

Looking at the TransUnion report, there's a single 30 day lateness posted from November, 2016. Everything else is "OK". The 11-page report doesn't give a credit number, though.

The 37-page Equifax report is equally unremarkable. It says no fraud indicator on file, 0 results for "alerts", average account age of 9 years, 4 months, credit history of 17 years, 5 months. accounts with negative information: 1 (the one late payment in November, 2016). She only has 3 active accounts now. Debt-to-Credit on one credit card is 19%, the other is 22%. Her loan is sitting at 76%, but that's the one that auto-pays every month.

For some reason, she wasn't able to download the Experian report. It says wasn't available, and you need to mail in for it.
 

Sanrith Descartes

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We did one of the free annual credit reports on her, and after a quick glance, I didn't see anything that stuck out. But this is the FICA score that's jumping around, and not one of the main 3. *shrugs* I don't really understand any of this.

Looking at the TransUnion report, there's a single 30 day lateness posted from November, 2016. Everything else is "OK". The 11-page report doesn't give a credit number, though.

The 37-page Equifax report is equally unremarkable. It says no fraud indicator on file, 0 results for "alerts", average account age of 9 years, 4 months, credit history of 17 years, 5 months. accounts with negative information: 1 (the one late payment in November, 2016). She only has 3 active accounts now. Debt-to-Credit on one credit card is 19%, the other is 22%. Her loan is sitting at 76%, but that's the one that auto-pays every month.

For some reason, she wasn't able to download the Experian report. It says wasn't available, and you need to mail in for it.
Contest the late payment on the TransUnion site (even if you were late). If the same account is also on the Equifax report and doesnt show the same late, make sure to include that fact in your dispute.
 

Blazin

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Something like a 20pt drop does not have to be any particular item. I sometimes I get dinged for not having enough balance or because an account sat dormant. I just had a 37 pt change in score in one month with absolutely nothing changing in regards to my borrowing or accounts.

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Noble Savage

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A 20 point drop might be because of a recent credit inquiry. Has she applied for any new lines of credit lately?

I would start with finding what is being reported as late and calling that company to try to straighten it out first. If it's not in collections yet they can remove the filing with the credit bureaus.

I would advise against this. Filing a dispute directly through the credit bureau has the benefit of starting a timer. The creditor has 30 days after the dispute to present documentation to the credit reporting bureau that the infraction is legitimate. Even if the infraction is legit they have to remove it if supporting documentation isn't available. If you contact the creditor directly that gives them the incentive to start pulling your paperwork together so that if the credit bureau does ask them to verify they will have all your documentation handy. Thats why you should dispute everything negative on your report even if its legit because alot of times the debt is so old there is no supporting documentation anymore or the creditors are too lazy to dig it up.
 
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Borzak

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I second file a dispute. I did it with a medical bill that I couldn't get anywhere with the hospital/dr. that turned in the collection. Then they sub it out to someone and they don't care and most likely have no way to get anywhere. I had a cancelled check for the charge but the hospital ignored it when I sent it to them. The group they subbed it out to ignored the dispute and it was removed. Two years later I got a refund from the hospital for the amount. Who knows.
 

Dandai

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Sorry if this has already been discussed and I missed it, but I’ve been living off of savings and a credit card for the past 9 months or so and it’s almost maxed out now. Is it possible and/or advisable to seek a personal loan/debt consolidation at a lower interest rate? I’ve got nearly $80k equity in my property (appraised at $230k).
 

alavaz

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Sorry if this has already been discussed and I missed it, but I’ve been living off of savings and a credit card for the past 9 months or so and it’s almost maxed out now. Is it possible and/or advisable to seek a personal loan/debt consolidation at a lower interest rate? I’ve got nearly $80k equity in my property (appraised at $230k).

Do you have a source of income now? Without that, it might be hard to get approved for a personal loan. A home equity loan may be doable though.

If you have the income to pay it down quickly (12-18 months) then I'd look for a credit card with 0% balance transfer.
 
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Sanrith Descartes

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Sorry if this has already been discussed and I missed it, but I’ve been living off of savings and a credit card for the past 9 months or so and it’s almost maxed out now. Is it possible and/or advisable to seek a personal loan/debt consolidation at a lower interest rate? I’ve got nearly $80k equity in my property (appraised at $230k).
How much debt are you talking about on your CC and what is the interest rate?
 

Dandai

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Do you have a source of income now? Without that, it might be hard to get approved for a personal loan. A home equity loan may be doable though.

If you have the income to pay it down quickly (12-18 months) then I'd look for a credit card with 0% balance transfer.
I got my mortgage with the “income” from my monthly VA pension - approx $2k/month. I just started a new job but it’s part time at best. Doubt they’d accept it as another source of income. I’m looking for full time work.
 

Sanrith Descartes

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Approx $16k at 24.99 APR. We’ve had an Amex for ten or more years that we never really used. They’re running a “special” on transfers for a 3% fee.
Preface: nothing I say is said with malice. The nature of types words can sometimes come off as cold or hurtful when it is being analytical.

So 16k at 25% interest is an anchor that can drown you. I totally understand why you did it, but it put you in a serious hole.

1. Write down all your sources of income after taxes and put that number aside as a monthly value.
2. Write down all your monthly expenses excluding the credit card.
3. Subtract 2 from 1 and see what's left. If its negative your expenses are outweighing your income.
4. Look at the value of 3 and be honest with yourself.

Look at the transfer details on the Amex. A 3% fee sucks, but paying 480$ is going to save a ton of interest and give you a chance to attack that 16k principal.

That 25% interest rate is going to eat you alive. If you have to cut some lifestyle optionals to apply money to that debt then unfortunately that's what you should do.

Speak to someone reputable about a cash out refi. Let them model up some numbers. Dont do it if you think there is any chance you cant cover the new mortgage amount. Dont put your house at risk.

Wish I have better advice for you. The balance transfer is just a delay tactic. It will give you breathing room to handle that debt but it only helps if you have a workable path to apply cash to the principle. Otherwise it just kicks the can down the road for a bit.
 
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