Do you understand how credit works?

I work reports for a major bank in the US. Most of my job is looking over reports, dealing with calls/emails and general corporate nonsense. I work specifically with the credit cards for my bank.

The amount of people that have charged off credit cards (over 120 days without payment on balance) that call in to "remove this from their credit report" blows my mind. The entire point of your credit score is to show you pay your bills, if you don't pay your bills your score is shit. Seems simple. In a 6 month period I deal with probably 500-1000 people who have serious credit card debt and then don't understand why they can't get a loan for a mortgage or a car.

 

On average I feel like most people understand how credit works, but I just wanted the OGs opinion on credit scores and what they mean.

I don't think I do, I just got a loan for a car and assumed my credit score would go down ( I figured more debt would effect me negatively) but somehow it went up 40pts.

I do. Pay your bills and the minimum on your credit card (or just don't carry a balance) and your credit will be phenomenal. 

StevetheWeasel - Paging CreditSnob.

Good post.

My credit score for the last several years has been above 800. I recently had to make a large purchase of several thousand dollars, so I put it on my credit card. My score immediately went down to below 700. I paid off the full amount a couple weeks later. My credit score is still barely above 700.

Fuck you and your credit scores. My score should be back to where it was since I paid off the full amount in a timely manner. Big banks still trying to fuck over the everyday man. #middlefingersup

What do you use to check your credit score? If you just recently paid the balance off and it's not reflected in your new credit card statement yet your score won't return to what it was. Places like Credit Karma give you a weekly report of credit scores but they only get info from credit card companies monthly when you're statement closes. Sometime it can take up to a month to see the changes.

Doesn't credit scoring mean you willing go into debt?

me lurk you long time -

What do you use to check your credit score? If you just recently paid the balance off and it's not reflected in your new credit card statement yet your score won't return to what it was. Places like Credit Karma give you a weekly report of credit scores but they only get info from credit card companies monthly when you're statement closes. Sometime it can take up to a month to see the changes.

Its been 2 months.

Again, FUCK the financial industry. Every one of them is a crook.

Great thread. How long does bad credit stay on your report? Lets say you have credit card bills that were delinquent, how many years of good payment would it take to improve you shit credit to a 600?

Also lets say you have a person who makes 100k and has lots of bad credit and wants to file bankrupcy. Do you let them flush or do you guys go after them and garnish?

VFR -

My credit score for the last several years has been above 800. I recently had to make a large purchase of several thousand dollars, so I put it on my credit card. My score immediately went down to below 700. I paid off the full amount a couple weeks later. My credit score is still barely above 700.

Fuck you and your credit scores. My score should be back to where it was since I paid off the full amount in a timely manner. Big banks still trying to fuck over the everyday man. #middlefingersup

Wow, that brutal, a life time of good responsible finances washed away for nothing

VFR -

My credit score for the last several years has been above 800. I recently had to make a large purchase of several thousand dollars, so I put it on my credit card. My score immediately went down to below 700. I paid off the full amount a couple weeks later. My credit score is still barely above 700.

Fuck you and your credit scores. My score should be back to where it was since I paid off the full amount in a timely manner. Big banks still trying to fuck over the everyday man. #middlefingersup

I fully agree. In your situation you 100% should not have had your score lowered. Not sure why it was. I would recommend contacting the credit bureaus to see why your score was lowered and contact whoever is reporting something to lower your score.

 

i am mostly speaking about people who don't pay their bills and then wonder why their credit is garbage.

 

I do appreciate you telling me to fuck off because I work for a big bank. I have a family to support. I'll burn your fucking house down to make sure my kids have a home and a future. 

Tim Duncan - Great thread. How long does bad credit stay on your report? Lets say you have credit card bills that were delinquent, how many years of good payment would it take to improve you shit credit to a 600?

Also lets say you have a person who makes 100k and has lots of bad credit and wants to file bankrupcy. Do you let them flush or do you guys go after them and garnish?

7 years is typically how long bad credit will stay on your credit. 

 

Payments of credit would depend on what kind of payment and status of  the account. Paying off delinquent accounts isn't going to make any noticable improvements to your credit quickly. Paying a balance in full is better, but depending on the level of delinquency before payment your credit could still be negatively impacted. Settling an account may have you pay less on debt but it will negatively impact your credit and any forgiven amount over $600 will have tax implications.

 

What it really comes down to is WHO is reporting to the agencies. Some banks/companies are willing to discuss reporting to agencies and some are not. Some will delete a tradeline and some will just report it as a delinquent account paid in full which can still negatively impact your credit.

 

Anytime a credit account goes delinquent it can fuck your credit. 120 days of delinquent payment can really fuck your credit dpending on the company.

LFTM -
Tim Duncan - Great thread. How long does bad credit stay on your report? Lets say you have credit card bills that were delinquent, how many years of good payment would it take to improve you shit credit to a 600?

Also lets say you have a person who makes 100k and has lots of bad credit and wants to file bankrupcy. Do you let them flush or do you guys go after them and garnish?

7 years is typically how long bad credit will stay on your credit. 

 

Payments of credit would depend on what kind of payment and status of  he account. Paying off delinquent accounts isn't going to make any noticable improvements to your credit quickly. Paying a balance in full is better, but depending on the level of delinquency before payment your credit could still be negatively impacted. Settling an account may have you lay less on debt but it will negatively impact your credit and any forgiven amount over $600 will have tax implications.

 

What it really comes down to is WHO is reporting to the agencies. Some banks/companies are willing to discuss reporting to agencies and some are not. Some will. Delete a tradeline and some will just report it as a delinquent account paid in full which can still negatively impact your credit.

 

Anyrkme a credit account goes delinquent it can fuck your credit. 120'days of delinquents payment can rally fuck your credit depending on the company.

Bankruptcy is an entirely different thing and I don't know enough about it to discuss the intricacies of how it affects credit. I don't deal with bankruptcies and am truthfully ignorant of all the details. 

"The amount of people that have charged off credit cards (over 120 days without payment on balance) that call in to "remove this from their credit report" blows my mind. "

The reason for this is because if you send letters or call the right companies you can get it taken off of your credit report.  It doesn't always work but you might as well try if you can.  Once they agree to take it off you get it in writing and you pay the settlement or whatever you agreed to with the company.

It's a standard credit fixing strategy.

quality -

"The amount of people that have charged off credit cards (over 120 days without payment on balance) that call in to "remove this from their credit report" blows my mind. "

The reason for this is because if you send letters or call the right companies you can get it taken off of your credit report.  It doesn't always work but you might as well try if you can.  Once they agree to take it off you get it in writing and you pay the settlement or whatever you agreed to with the company.

It's a standard credit fixing strategy.

Yes this is true. I am referring to people who are not settling or paying the debt. 

 

 

They simply are upset that their credit is negatively impacted by a credit card they stopped paying for and aren't attempting to pay for.

me lurk you long time -

What do you use to check your credit score? If you just recently paid the balance off and it's not reflected in your new credit card statement yet your score won't return to what it was. Places like Credit Karma give you a weekly report of credit scores but they only get info from credit card companies monthly when you're statement closes. Sometime it can take up to a month to see the changes.

Creditkarma is a great site for that. 

Only thing that matters to the credit score is what is reported or otherwise makes it onto your credit history. You could default on $100,000 loan and it won't affect your credit score if it's not reported. The flipside is also true, you can pay all debt, and if it's not reproted it won't matter. Which is why everyone with debt should check their score on a regular basis. If there is something that is incorrect on your score, you have legal protections to get it changed.

 

There are three credit reporting agencies, so check all three. You could have a great score on one and a not so great one on another because you have incorrect information on one and not the others.

 

Also, everyone should know how their debt compounds. If you have a daily compound rate, you will pay significantly more than if it's a monthly, quarterly, or annual computation. What you end up paying can be hugely different than what you thought if your debt compunds and you did a straight annual percentage when you figured out your repayment. Lenders are required to disclose this, so if they didn't, you should find out what it will be and note that they didn't follow the law.

There are some consumer protection laws that work in the borrowers favor if you know the requirements. Here's an example: in some states, a mortgagor has to have an original copy of the mortgage agreement with the note attached. If the note is not attached, then the entire mortgage is voided.

 

Know how Truth In Lending Act (TILA), Electronic Fund Tranfers Act (EFTA), Fair Debt Collection Practices Act (FDCPA), and the Fair Credit Reporting Act (FCRA) protect you beforeyou borrow from a lender.

VFR -
me lurk you long time -

What do you use to check your credit score? If you just recently paid the balance off and it's not reflected in your new credit card statement yet your score won't return to what it was. Places like Credit Karma give you a weekly report of credit scores but they only get info from credit card companies monthly when you're statement closes. Sometime it can take up to a month to see the changes.

Its been 2 months.

Again, FUCK the financial industry. Every one of them is a crook.

If all that happened was you used a high percentage of your available credit on your total credit available and paid it off your score will come back up. That ratio is a big factor in your credit score. Even if you pay your full balance every month everytime your statement closes that's what's reported.

 

Your credit score is a big game. Some people think keeping their available credit low is more responsible but if you use it all one month you could max out your available credit and your score will plummet. That's even if you pay it all off. So keeping higher avail credit lines so your usage percentage is less has less impact when it have to make a big purchase.

VFR -

My credit score for the last several years has been above 800. I recently had to make a large purchase of several thousand dollars, so I put it on my credit card. My score immediately went down to below 700. I paid off the full amount a couple weeks later. My credit score is still barely above 700.

Fuck you and your credit scores. My score should be back to where it was since I paid off the full amount in a timely manner. Big banks still trying to fuck over the everyday man. #middlefingersup

Never utilize more than 30% of any credit line.  It will seriously fuck your credit.  Maxing out a card with a $2000 limit even if you have another line with $10,000 will kiill your score.  Also dont utilize more than 30% of total available credit on all open lines.

I have a card with a $90k or $100k limit.   It's come in handy a few tomes for big unforseen purchases.  Had to purchase a new HVAC system for a rental property once while I was on vacation. That sucked, but my credit didnt take a hit when I charged $15k.