Understanding your credit rating

[greensinestro]

Many customers just don't get the grasp of what a credit history is, and how much of the time, there is nothing you can do to change it drastically over night.

I have worked in both the telecommunications industry and cable industry for close to 16 years now. Much of my job has been in customer service dealing with all sorts of issues. My favorites were credit checks and fraud investigations. Much of the time, if you get a customer with bad credit or no credit, restrictions are often placed on the account unless a deposit is on file. Sometimes, bad credit would come up because the customer had previous service with us, disconnected and went years without paying the bill, then paid it recently because the could not obtain service until this was satisfied.

My favorites were the ones who would say, "But, I just paid that bill! My credit should be good now!" Nope, even if you pay an outstanding bill, it stays on your credit report up to seven years. I had a guy a while back who paid of a bill from three years before, but was miffed that we still required a deposit from him before we could turn him on. This guy just could not get the grasp of the fact that even though he did pay the bill, he still had a terrible history before, such as not paying his bill on time, being in collections each month, paying his bill with worthless checks, etc. Many people think that when they pay that one bill, it will make their single digit credit rating into an 800 rating. Never mind they most likely have other unpaid bills out there that also count toward or against their rating.

[ShortTemperHatesStupidity]

In the consumers defense (maybe not this particular one, but in general) credit is a difficult concept to grasp, because not too much information is available in plain english for someone to understand.

On the flip side, the average person should know that a 3 year old bill just paid is gonna tarnish your credit for a bit...

[nick1091]

My favorites were the ones who would say, "But, I just paid that bill! My credit should be good now!" Nope, even if you pay an outstanding bill, it stays on your credit report up to seven years. I had a guy a while back who paid of a bill from three years before, but was miffed that we still required a deposit from him before we could turn him on. This guy just could not get the grasp of the fact that even though he did pay the bill, he still had a terrible history before, such as not paying his bill on time, being in collections each month, paying his bill with worthless checks, etc. Many people think that when they pay that one bill, it will make their single digit credit rating into an 800 rating. Never mind they most likely have other unpaid bills out there that also count toward or against their rating.

Agreed 100%. In working credit and collections, the biggest misconception people have (or wishful thinking, I suppose) was that once a delinquent bill was paid, it and anything associated with it would completely drop off your report.

Had a guy the other day who has hopping mad that his credit report showed his account had gone to collections, but was listed as paid. I asked him what part of that report was factually incorrect, and I just received a whiney "But I PAIIIIIID IT!" in response. Indeed you did, sir, and at a lightning fast 378 days past due.

[Gurndigarn]

In the consumers defense (maybe not this particular one, but in general) credit is a difficult concept to grasp, because not too much information is available in plain english for someone to understand.

Actually, the information is quite readily availible in plain english. The problem is that banks are so eager to trap you into debt that they don't mention the plain english, but use stack of legalese.

The plain english, by the way: If you don't pay your debts on time, nobody trusts you. Especially not the banks.

[Horsetuna]

I got trapped by the banks. I asked "are there any fees or anything on this account?" and I was told 'no'.

Which was true, but I honest, swear to god, did NOT know that credit cards had Interest. Yes, I read the agreement, well, briefly at least... And I'm still suffering for it almost seven years later. I can't even GET a credit card now to try and rebuild my bad credit with. I'm terrified of what my credit looks like.

[Mr B Rabbit]

Ah, fun with credit. Particularly when you're a student.

"So this account doesn't have interest, it gives an interest free overdraft, yes?"
"Yep. Just sign up, show your student card and its interest free."
"Can I see the terms?"
"Sure."

The terms do indeed say that the account and overdraft are interest free, provided that the customer is on a full-time university course, which I was.

A month later I get charged interest. I'm still trying to sort that one out five years later.

The other fun one was the credit card. I phoned a total of seven times insisting that they not increase my limit, and that they freeze the card, and sent several requests in writing. Now this is largely my own fault for spending up to the credit when they gave it to me, but I was living on a student loan of £2700 a year and had to eat somehow. I explain this to the bank, several times.

In the end they gave me a total credit limit of £12500, starting from £1000. I'm still not quite sure what gave them the impression that was a good idea, particularly as I kept warning them it wasn't.

[greensinestro]

In the consumers defense (maybe not this particular one, but in general) credit is a difficult concept to grasp, because not too much information is available in plain english for someone to understand.

Not always. I, for the first time, got my credit report and was astounded by what they know about you. Every credit card, every car loan, home loan......it was all there. It even showed the one and only month I missed a payment on my home (we were refinancing, which is another complicated concept). My rating was so high it was unbelievable.

My point of this thread was like what other people have responded with. Yes, you may have satisfied your debt, or debts, but that does not just wipe clean the slate. Nobody's perfect, and these companies know that, but they also have to look out for themselves by seeing who's a risk and who's not. What's always strange are the people who have low credit scores are also the ones who continue not have issues, like not paying their bill on time.

At some phone companies, the low score credit rating customers also have a choice of going prepaid. With cellular, you can do prepaid, but it means a credit card is required, which many of these people don't have. At Bellsouth, if you can't or won't pay a deposit, you can have your phone service restricted for only local calling and minimal services, and after one year of satisfactory service, it can be removed. What used to irk me was I handled these people. If after one year, their rating improved, I got to call them and ask them if they still wanted to keep their long distance block,and if they did, it would now have a monthly charge. Man, the language and ugly remarks that followed on that one.

Where I work now, NOW Communications, they offer prepaid phone service, but again, most of those customers are the ones with low, low ratings, some in the single digits. They have to pay at a payment center, up front, one month ahead, before getting their service. And yes, many of them afterward aren't able to pay the next month's bill, thereby losing the service. The big deterrent on that is this: If you have your phone shut off for non payment, it does not go into collections like a post pay account. But, you cannot get your number back again. In other words, if this happens, be prepared to get a new phone number, and go through the headache of informing all of your friends, family, and neighbors!

[ShortTemperHatesStupidity]

Actually, the information is quite readily availible in plain english. The problem is that banks are so eager to trap you into debt that they don't mention the plain english, but use stack of legalese.

Perhaps I should elaborate, since it appears I was quoted frequently. The information is out there, yes. However, you do have to do some detective work to find it-and in terms and words you can actually comprehend (not something like: if your brothers name is Earl, then you're charged fees, but if Earl has a dog named Fred, then you don't, but if Fred has worms, then you do). Otherwise, you're stuck with the stack of legalese that credit cards and banks give you, knowing full well you're not going to go through 18 pages of 8 point font legal jargon...

The point I'm trying to make is that predatory lending is rampant, and unless you do some serious homework you're lible to miss something and get dinged with some serious fees.

On the flip side (as I said earlier) if you pay a bill but it's a year or more later, yes it's going to be a derog on your credit for some time, or at the very least until you run and inquiry through the three credit bureaus to clean up unnecessary inquiries and satsified debts.
It's funny I should be saying this because I just got off the phone with a lady who was bitching and moaning over getting turned down because she paid a $95 dollar equipment bill over a year late-I spent 20 minutes rinsing and repeating the statement "I can't help you, call your broker and contact the credit bureaus..."

[BookstoreEscapee]

knowing full well you're not going to go through 18 pages of 8 point font legal jargon...

They print it that big?

Now I am going to check my credit report when I get home. It's one of those things that I keep meaning to do but keep putting off.

[protege]

Not always. I, for the first time, got my credit report and was astounded by what they know about you. Every credit card, every car loan, home loan......it was all there. It even showed the one and only month I missed a payment on my home (we were refinancing, which is another complicated concept). My rating was so high it was unbelievable.

Not trying to brag, but was going through getting my mortgage, several people said it was nearly perfect. I mean, I think there's only one or two late credit card payments total...and I've had that card nearly 10 years. Everything else was paid on time, or well in advance.

However, my rating is slightly lower...simply because of all the bastards running credit checks on me back in September

[ShortTemperHatesStupidity]

BSE-
Probably not, but that's as low as the default font sizes go on Word so I was using a number people would actually be able to type in and see just exactly how tiny it is... Chalk that up to being an admin that I actually know that.

However, my rating is slightly lower...simply because of all the bastards running credit checks on me back in September

You can contact the 3 bureaus and get them to clear off any inquiries that didn't result in a loan of some kind. That will boost your score, although it sounds like you may not need it.

And damn all you 800+ people!

[greensinestro]

However, my rating is slightly lower...simply because of all the bastards running credit checks on me back in September

Yes, I forgot to mention that fact. Many people do not realize that your credit rating can go lower due to companies doing frequent checks on you. I'm not sure that's right, but until the rules change, what can we do about it?

[ShortTemperHatesStupidity]

Not get your credit run until you're sure you're ready to finance. Don't let car dealerships run your credit until you fill out an application, get your yearly report and request inquiries to the bureaus to clear out all the old crap that didn't result in anything.

Other than that, nothing.

[SongsOfDragons]

I'm...confused.

I'm probably rated as a young'un on this site, being only 20 years old. I only have a debit card - I had one on my previous account before that was closed for my student account. I've never been overdrawn though I do have the safety net there and I have an ISA and an online savings account. I've never had to do anything like mortgages or loans except for my standard student loan. I don't particularly want to get a credit card because I like the swiftness of my debit card.

Is that good or bad? Is my not wishing to get credit putting a ? on my record and will it screw me over?

[Primer]

Is my not wishing to get credit putting a ? on my record and will it screw me over?

If/when the time comes that you wish to buy a car or a house, unless you are prepared to pay the full amount in cash, then yes, not having a credit history can bite you in the butt. No credit history may also be used against you when applying for insurance and/or jobs. It sux, but it happens.