Tracy Winters
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Only if they go unpaid
Similar to cell phone, medical or utility bills, credit score formula doesn’t consider parking tickets, and they are not reported to your credit report. However, unpaid parking tickets become unpaid debts and as such are reported to the credit bureaus and do go on your credit report.
Furthermore, unpaid parking tickets usually result in a law suit being filed against you, and in many cases a judgment follows. Judgments tent to have bad impact on credit scores, not to mention the added fines, interest & legal costs. If left unpaid, judgments turn into liens or even a garnish, which further impacts your credit score.
My recommendation is to pay off parking tickets or take legal action if you believe they are unjust, but never simply leave them unpaid.
See cellular-phones-and-credit-score.html for more information.
So typical of them to lie
Collection agencies have really earned their bad reputation. They are trying to collect money no matter what, and are simply lying to you.
They also like to create a false pretence of urgency, saying that the offer is only valid today, or this week. They try to put pressure on people so they can’t think straight and don’t have enough time to find out their real rights.
The truth is that all derogatory items age off your credit report 7-1/2 years from date of first deficiency (default). It makes no difference whether the debt is paid, settled, or unpaid (See how-long-do-negative-items-stay-on-my-credit-report.html for a complete list). This is per the FCRA and nothing restarts that clock.
If you have debts on your credit report that show up after that 7-1/2 year period, simply dispute them with the credit bureaus as being too old.
Like so many, you’re confusing SOL with the credit reporting time
The Statute of Limitations (SOL) is the time frame to bring lawsuit and has nothing to do with how long something appears on your credit report.
While SOL is based on state laws and varies between states, the reporting period is based on the FCRA, which is a federal law). Most derogatory items age off your credit report 7-1/2 years from date of first deficiency (default), and nothing restarts this clock (See how-long-do-negative-items-stay-on-my-credit-report.html for a complete list of all derogatory items and their reporting time limit).
If a collection agency or someone else sues you after the statute of limitation has passed, you can use the SOL as an affirmative defense to the lawsuit. But there’s nothing you can do to remove that negative item from your credit reports before that 7-1/2 years reporting period expires.
I’m pretty much sure it’s NOT your school?
Are you sure it’s your school that gave your information to lending agencies? I find it hard to believe.
First – your school is not allowed to give or sell your information.
Second – lenders and creditors rarely do business with schools.
Third – your school has no reason to have your credit information in the first place.Lenders and creditors BUY credit information from the 3 major credit bureaus for purpose of pre-screening and solicitation of credit offers, just like the one you’ve received.
It probably says you’ve been pre-approved or pre-selected, right?
The credit bureaus are allowed to sell your credit information to anyone that has “permissible purposes ” for buying them, which pretty much means all lenders and creditors (See Who has access to my credit report.
Although these credit inquiries do appear on your credit report, they DONOT count in your FICO score. Only credit inquiries initiated by you (such as when when YOU apply for credit) go into your FICO score.
Nevertheless, you have a right to request the 3 major credit bureaus to exclude your name, address or telephone number information from lists for pre-approved, unsolicited credit and insurance offers by calling 1-888-5-OPT OUT (1–888–567–8688). See FCRA for a summary of your rights.
Hardly
Your score won’t get to where you want it. If these delinquencies are old (how old exactly?), then you can expect 50 points rise at the most.
The FICO score formula puts emphasis on the information age. The more recent information (good or bad) affects your score much more than older information. Forom my experience, something else is pinning down your score. High utilization ratio perhaps? Any other delinquencies you didn’t mention?Here is a list of the most common negatives that can bring your score so low. Items are listed according to severity in decreasing order:
- Bankruptcy
- Foreclosures
- Repossessions
- Loan Defaults
- Charge Offs
- High Credit Utilization (above 80%)
- Court Judgments
- Collections
- Past Due Payments
- Late Payments
- High Credit Utilization (above 35%)
- Credit Rejections
- Credit Inquiries
What I’d suggest is that you pull your credit reports from all three bureaus, go over them and try to identify the culprit. Additionally, when you pull your report you get an explanation sheet that lists your most problematic delinquencies. Here is a good guide for identifying your credit problems and improving your credit score.
Good luck
P.S. do come back and let us know how old where the delinquencies, how much did your score went up after they were removed and finally – what was your real reason for your very low score.
It’s your debt & your responsibility
It is YOUR responsibility to make sure your medical bills are paid. Medical providers process claims to insurance companies as a courtesy for patients. It’s fairly common for bills to not get paid and bounce around for several years. It’s YOUR responsibility to check those benefit statements the insurance company sends and make sure the medical bills get paid.
Not receiving the bills is no excuse. The unpaid bills are eventually sent to collections, and once they get there your credit is affected.
As for the bills that are already in collection – the damage is already done, and even paying them won’t raise your score. You may want to try a pay for delete agreement, but it’s really very hard to actually get the collection agencies to cooperate.
In the future, keep better track of your bills and make sure they are covered.
Don’t get your hopes two high
Actually, it’s not unheard of for debts to disappear and then reappear. It probably has to do with collection agency re-selling your debt.
Most collection agencies re-sell uncollected accounts to other collection agencies. It happens all the time. Some companies update your account balance to show $0, other simply delete it. The new collection agency that bought your debt probably hadn’t updated the credit bureaus yet, but may do so in the future.
As long as the 7-1/2 year reporting period hasn’t passed, the debts can show up on your credit report later.
BTW, did they disappear from all three credit reports or only just one? If they still appear on even one credit report than you won’t benefit from it. Most creditors pull your credit reports from all 3 major credit bureaus.
It also has nothing to do with your liability to pay the debts. The 7-1/2 reporting period has nothing to do with the Statute of Limitations (SOL) which is the legal time frame to file a lawsuit against you.
Your score is probably fine, however…
Home owners do run credit check, but your credit score is less interesting than your actual credit report.
It’s common for young people to have lower scores on average. Usually, it’s because of no credit (lack of credit history) rather than bad credit. You renters will want to see if you have negative items on your report such as late payments, charge-offs etc. If you tend not to pay debts, then they will not want to let you the apartment.
If it’s just a case of “thin” file, then usually the credit check won’t pose a problem.
Apartments have various other requirements. You may have to show sufficient wages to pay the rent. It goes without saying that all of your friends will have to qualify as well.
If you can’t meet their requirements, you may need to come up with a co-signer that will be liable to pay the rent in case that you fail to.
Please see also credit-score-and-renting.html for more information.
Unfortunately, they DO require a clean credit report
The Graduate PLUS loan, or GradPLUS loan, is a low, fixed interest rate student loan guaranteed by the U.S. Government.
Unlike other Federal aid,the Grad PLUS loan is not need-based. Loan eligibility and total loan amount is not based on household family income level, personal income level, financial need, or personal assets.
GradPlus loans are similar to credit-based private student loans, with the benefit of having a fixed interest rate and federal guarantee.
The GradPLUS Loan allows graduate students to borrow the total cost for their graduate school needs, including tuition, room and board, supplies, lab expenses, and travel, less any other aid.
Here’s a quick overview of the Graduate Plus loans:
- The U.S. Department of Education is the lender.
- The maximum loan amount is the student’s cost of attendance (determined by the school) minus any other financial aid the student has received.
- Loans have a fixed interest rate of 7.9%.
- In order to qualify, the borrower must not have any adverse credit history (it’s not clear enough for how long)
- GradPLUS payments can be deferred while you are in school .
- Cosigner not required.
- Interest is tax deductible for most grad students.
- School must be participating in the program.
Considering you have a recent derogatory item on your report, I’d say your chances of getting approved are slim.
More information about Graduate Plus Loans at http://studentaid.ed.gov/types/loans/plus.
RE: Credit building tips
The best way to build good credit is to pay all your bills on time. Building good credit is about two things:
- Creating a stream of positive information
- Taking care not to accumulate negative derogatory items
Creating a stream of Positive information is best done by using a credit card. You will need at least two years of timely payment for your score to climb to the 700 area and above. However, for an excellent credit you will need at least two credit cards and probably an installment loan (either a secured loan or a car loan).
Avoiding negative information is very simple. Only thing you need to do is to ALWAYS pay your bills on time. Credit Cards statements, Loans, utility bills, medical bills, rent, gym…you name it. Remember – a single derogatory item will do much more damage than what 2 years of timely payment can render.
If you have no credit history, you will have problems getting any kind of credit card. Especially if you’re under 21. New laws require that people under 21 provide proof of sufficient income to qualify for the card. Credit card companies will also want to see at least 12 months of work history.
Your best chance would be to start with a secured credit card. Use the card for regular purchases, wait for the statement, and pay the balance in full every month. In about a year, you should be able to get a regular card and/or convert the secured card to a regular account.
See keeping-a-good-credit-score.html for a list of credit building Do’s & Don’ts.
Payment plans with debt collectors are bad idea
Payment plans with collection agencies are always a bad idea. To start with, they’re not going to agree to a 3-year repayment plan. They will want the debt paid within 6 months. Even if they agree and let you to start making payments, it is very likely that they will sell-off the debt to another collection agency in 6 months to a year, and you’ll have to negotiate a new settlement with them!
Paying debts does NOT remove the negative information from your credit report, nor does it improve your score. The damage is done and nothing can undo it. The negative information will remain on your report for 7-1/2 whether paid, settled or unpaid. Your payments will not be reported to the credit bureaus until the debt is paid in full. Only then will the collection agency update to show the debt is paid.
That doesn’t mean that you should not pay your debts. You definitely should, or they are likely to sue you (See why-pay-off-debts.html).
You would do much better to wait and save up for a lump sum settlement. You can probably settle for 50% in a year or two, unless they sue and get a judgment before.
You can forget about that pay-for-delete letter. Pay for delete agreements are hard to get even BEFORE paying, and are practically impossible to get AFTER you pay.
Make sure that you get a signed agreement in writing before you pay. If you do go with a payment plan, make sure it is detailed – total due, amount of payment, number of payments, due date, etc. NEVER give a debt collector direct access to your bank account. Pay them only with money orders or cashier’s check. See how-to-pay-off-debt.html for a more information.
I’d go ahead and pay it off
Paying off that loan makes perfect sense, and in general will never have a negative effect on your credit. It may have a negligible negative effect on your credit score, but it’s not something you should worry about. Sometimes it’s smarter to think with your pocket and not to worry about a few credit score points.
Installment loans build credit by making payments over time. You need to pay on a car loan for 12 to 18 months for it significantly affect your credit score. While paying off an installment loan early won’t hurt your credit, it won’t do anything extra for your score.
Paid accounts in good standing remain on your credit report for at least 10 years. They just don’t count as much in your score as open, active accounts. For this reason, paying off that car loan may lower your score by 10 – 15 points max. Not something to worry about’ unless you plan to take a mortgage in the next 6 month.
I’d go ahead and pay it off if I were you.
It depends entirely on the landlord
There is no single answer to your question. In reality it all comes down to what the landlord is willing to compromise on. While some may approve you, other will reject you for the same credit.
In general, the higher you income is and the more stable your jobs are – the greater the chances are that you’ll get the apartment.
Why is tour credit score so low? Is it because of bad credit or simply lack of credit history?
Landlords are more likely to accept low credit score due to lack of credit history than bad credit. This is why they pull and review your entire credit report rather than just your credit score. They want to look at your actual credit history and figure out for themselves how you pay your bills.
Hope this helps
It’s fairly common…
Collection agencies do this all the time. What happens is that the medical provider sold the debt to the collection agency, which reported it automatically. It’s normal for collection agencies to report debts even without calling debtors. Them reporting has nothing to do with your request for documentation.
Are you sure that the debt isn’t yours? It’s very likely that it is a medical bill your insurance should have paid or you thought they did. Pretty common for unpaid medical bills to get sent to collections.
If it turns out that it is your debt, try negotiating a pay for delete agreement, where you pay and they remove the item from your credit report.
If it’s not yours, dispute the item. You may need to repeat the dispute for all three credit bureaus, but first check all your reports.
In any case, since only a month has passed I’d give them another two weeks to send you the documentation. If they fail to provide proof – proceed with the dispute.
Good luck
It explains why you have a low credit score
Although you don’t mention it, I’m certain that your credit score is very low. Often, remarks of that kind come as explanation for a low credit score.
What it means is that compared to customers with similar credit profiles as yours, you have more derogatory items (late payments, charge-offs, collection accounts etc.) than you should have, and it’s impacting your credit score.
Most derogatory items age off your account 7-1/2 years from the date of first deficiency (default). Public records items also remain for at least 7 years (some are longer). However, paying-off derogatory items won’t remove them from your report, nor will it improve your credit score.
That doesn’t suggest you should keep ignoring them. You should certainly resolve those items, at least those you can do something about. To start with, it will look better to creditors looking at your credit report. More importantly, by ignoring them you ask for more trouble such as law suits, judgments and even liens or garnishment (See why-pay-off-debts.html for more information.
Resolving negative items is only half of the job. You need to re-establish good credit information if you want to see any improvement to your score. For this you need at least 24 months of consistent, timely payment history. If you don’t have an open, active line of credit get a credit card, even if you have to get a secured card. Use the card for normal purchases such as gas or groceries, wait for the statement, and pay the balance in full every month. That will build credit and avoid interest.
