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What Should be Taken Off?

post #1 of 22
Thread Starter 
I need some help trying to make sense of my credit report. Do closed accounts that show up on the report affect the rating? If they are closed shouldn't they be off of the report? How does one go about doing that? Thanks!
post #2 of 22
You can't

Just because an account is closed, doesn't mean it doesn't have an impact on your credit rating for a certain number of years.

Not sure about the US, but in Canada things stay on your credit report for 6 years or more depending on what it is. A first time bankruptcy will be there for 6 years. Subsequent ones longer.

Also, creditors take into account your debt-credit ratio. Which means that as you pay off credit cards and close them, your debt-credit ratio actually increases which can end up affecting your credit in a negative way. Department store credit cards like Sears etc are not as bad to close after they are paid off, but it's actually better to keep your cards like Visa, MC etc open without using them, until they are all paid off.

For example... let's say you have 5 bank credit cards. One has a credit limit of $15,000 which is maxed out. One has a credit limit of $10,000, and the other 3 have credit limits of $5,000 each. That's a combined total of $40,000 credit. If out of all of those cards you owe $15,000 your debt-credit ratio is based on the $15,000 debt and the $40,000 credit which you have. That is looked at as favourable... you have $25,000 free credit available.

Now on the other hand let's say that you have been closing each card as you pay it off and are now left with only one credit card .. the one that is maxed out at $15,000. Creditors look at you as a high risk. You have $15,000 debt, but you also only have $15,000 credit which means you have zero available credit... so you appear to them as a high risk regardless of having paid off the other debts.

Probably more information than what you were wanting, but since I declared bankruptcy I have been doing a great deal of reading on money management and it's quite the eye opener!
post #3 of 22
Thread Starter 
Thanks for the help.

I was looking around online and saw that it can take up to seven years for something to come off a credit report. I have some loose ends that I need to take care of.
post #4 of 22
you know, for some reason i was kinda scared to look here hehe
post #5 of 22
Quote:
Originally Posted by theimp98 View Post
you know, for some reason i was kinda scared to look here hehe
Ya, but you did.
post #6 of 22
well you only live once,

one must learn to take chances
post #7 of 22
Quote:
Originally Posted by Essayons89 View Post
I need some help trying to make sense of my credit report. Do closed accounts that show up on the report affect the rating? If they are closed shouldn't they be off of the report? How does one go about doing that? Thanks!
I just did that because I am buying a house and it made a world of difference. There was an old thirty dollar bill (bogus) from a doctor that I did not even know about. That stupid thirty dollars was lowering my credit rating by forty points! That would have cost me tens of thousands of dollars over the life of the house loan. I simply got a hold of the collection agency and told them I wanted to pay it off. The next time I had a credit check run (BTW, each time you have a credit check, it lowers your credit score), my credit score had improved to the point that I went from getting a house loan for 6.25% to 5.75%, all for a lousy thirty dollars.
post #8 of 22
Most things last for 7 years, but late payments are only there for 36 months, affecting your credit. Also, only payments that are more than 30 days late show up on your credit report in the US. Any payments within 30 days do NOT show up.
post #9 of 22
Quote:
Originally Posted by Persi & Alley View Post
I just did that because I am buying a house and it made a world of difference. There was an old thirty dollar bill from a doctor that I did not even know about. That stupid thirty dollars was lowering my credit rating by forty points! That would have cost me tens of thousands of dollars over the life of the house loan. I simply got a hold of the collection agency and told them I wanted to pay it off. The next time I had a credit check run (BTW, each time you have a credit check, it lowers your credit score), my credit score had improved to the point that I went from getting a house loan for 6.25% to 5.75%, all for a lousy thirty dollars.
when YOU check your credit report your score is NOT lowered, when someone else does it will lower it, like a mortgage company or car loan company, but you can check your own credit report everyday if you wanted
post #10 of 22
If there is anything on your report you don't agree with you can write a statement and that statement will be added to your report when potential creditors view it.
If you have credit cards that you no longer use you can write to the company and request them to be closed and your credit report should then state that thoe credit files are closed at your request.
Its true that many inquires can lower your score. I used to work in auto finance and many business mgrs at auto dealerships would "shotgun" (our phrase) a person's credit application to many finance sources at once (so the dealer not you) would get the best deal. It can wreak havoc on your FICO score!!
post #11 of 22
Quote:
Originally Posted by Persi & Alley View Post
The next time I had a credit check run (BTW, each time you have a credit check, it lowers your credit score), my credit score had improved to the point that I went from getting a house loan for 6.25% to 5.75%, all for a lousy thirty dollars.
You are entitled to look at your credit report once a year which does not affect your score. When businesses have a need to check your credit report, that is when your score is lowered.
post #12 of 22
Thread Starter 
One of the big problems on there is an account that was past due, I paid it off in July but it's still being shown as open. I called the company today to verify that the account was closed. They said it was but I never received a letter saying it was paid in full and is now closed. They are going to send one to me but they don't know why it's showing up on the report as being open still. Do I dispute this when I get the letter saying the account is closed?

There is also something else I'm wondering about. In 1999 I bought a Gateway computer and it was an installment account. I received a card with a $2000 limit on it but was never able to use it. The card has no balance due on it but it's showing up as being open in my revolving accounts. It's not a negative account on my report. Do I call Gateway and ask then why it's open and close it or do I leave it alone since it's not harming me?
post #13 of 22
I would contact Gateway and close the account. Many creditors if they see revolving lines of credit (like a CC) they will add up the credit lines to find out they total amount of revolving credit available. If the dollar amount is substanial they may use this as a factor of granting more credit. So if you don't need it I would close it.

As for the loan that is paid off that information should have updated on your account. Sometimes it could take 90 days but its way past that time frame. I don't know who they creditor is but they should have some department that updates the information to the credit bureau. I think you need to make sure that happens. Sometimes you have to speak with someone higher up on the food chain!!
post #14 of 22
Quote:
Originally Posted by GailC View Post
I would contact Gateway and close the account. Many creditors if they see revolving lines of credit (like a CC) they will add up the credit lines to find out they total amount of revolving credit available. If the dollar amount is substanial they may use this as a factor of granting more credit. So if you don't need it I would close it.
No, no, NO, this is bad advice. NEVER CLOSE OPEN ACCOUNTS!

Leaving it open shows that they granted you credit and how much. Closing it will NEGATIVELY affect your credit report.

Yahoo.com has a finance section that has LOADS of great info on managing your credit report. You might want to check it out.
post #15 of 22
Thread Starter 
Quote:
Originally Posted by GingersMom View Post
No, no, NO, this is bad advice. NEVER CLOSE OPEN ACCOUNTS!

Leaving it open shows that they granted you credit and how much. Closing it will NEGATIVELY affect your credit report.

Yahoo.com has a finance section that has LOADS of great info on managing your credit report. You might want to check it out.
My mom and dad pretty much said the same thing when I was talking to them. I'm going to leave the Gateway alone.

The thorn in my side is Beneficial.
post #16 of 22
Let me reanswer your question. The one bill I was talking about was a bogus bill and we were able to prove it. So it came off of my credit rating, which went up 40 points. Make sure every bill they claim is for real, it is hard to remember 5 or 6 years and you usually have no proof. I was lucky in that I did.
post #17 of 22
Quote:
Originally Posted by GingersMom View Post
No, no, NO, this is bad advice. NEVER CLOSE OPEN ACCOUNTS!

Leaving it open shows that they granted you credit and how much. Closing it will NEGATIVELY affect your credit report.
Yep. That's what I said earlier. The key is to not use it. That shows future creditors that you have "self control" and that just because you have available credit, you don't abuse it. And it helps your debt:credit ratio if you have more credit than you have debt.
post #18 of 22
Quote:
Originally Posted by Essayons89 View Post
One of the big problems on there is an account that was past due, I paid it off in July but it's still being shown as open. I called the company today to verify that the account was closed. They said it was but I never received a letter saying it was paid in full and is now closed. They are going to send one to me but they don't know why it's showing up on the report as being open still. Do I dispute this when I get the letter saying the account is closed?

There is also something else I'm wondering about. In 1999 I bought a Gateway computer and it was an installment account. I received a card with a $2000 limit on it but was never able to use it. The card has no balance due on it but it's showing up as being open in my revolving accounts. It's not a negative account on my report. Do I call Gateway and ask then why it's open and close it or do I leave it alone since it's not harming me?
You can dispute the closed accounts from your credit report. What company did you go through? I did my report with all three and each one had a link to dispute closed cards to remove them or close ones that are. I had some companies that were out of business. From what I read last year other CC doing a search doesn't hurt you. Like when they check to see if they can increase your credit. Checks for loans will lower your score. If you owe close to your balance that will affect your score too. You can either pay it off or ask for an increase but don't actually use the extra credit.
post #19 of 22
Thread Starter 
I never was able to use it. It was a Gateway card and I don't believe I was ever able to use it when trying to buy something from Gateway. As a result I cut the card up a long time ago.

When I get the closure letter from Beneficial that I should of had 5 months ago I'll send in a dispute to show that the account is paid off and closed so it shows up like that on the report. Would that be the best course of action?

Quote:
Originally Posted by "Crazyforinfo
You can dispute the closed accounts from your credit report. What company did you go through? I did my report with all three and each one had a link to dispute closed cards to remove them or close ones that are. I had some companies that were out of business. From what I read last year other CC doing a search doesn't hurt you. Like when they check to see if they can increase your credit. Checks for loans will lower your score. If you owe close to your balance that will affect your score too. You can either pay it off or ask for an increase but don't actually use the extra credit.
I went through Equifax. So I can have closed credit card accounts removed? None of those have a balance due, most have been paid off for while, the most recent were two from last year. I have one card that is close to the max (I can cut that down to half by summer) the other is half and a loan. Those are the only accounts that will be active once I get this Beneficial thing straightened out.

I appreciate all of the information and help so far, many thanks.
post #20 of 22
Quote:
Originally Posted by GingersMom View Post
No, no, NO, this is bad advice. NEVER CLOSE OPEN ACCOUNTS!

Leaving it open shows that they granted you credit and how much. Closing it will NEGATIVELY affect your credit report.

Yahoo.com has a finance section that has LOADS of great info on managing your credit report. You might want to check it out.
Only closing major credit cards will negatively affect your score. If you close store cards and still have Visa, Mastercard or Discover you will be fine.
post #21 of 22
A couple years back when we were negotiating a "blended" mortgage, our personal banker at our bank told me to close all my (zero balance) store credit cards. She said that each card counted against our credit rating even though they were at 0 balance and had not been used in some cases for several years. She explained in layman terms to me that if each card had a limit of $5,000 and I had 4 cards, the bank considered I owed $20,000 because a day after I received a loan from them I could go out and run every one of those 4 cards up to the max.
post #22 of 22
Thread Starter 
I just received a credit increase on one of my cards, I've been paying early or on time, along with more than the minimum. Does an increase help your FICO score?
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