Why is my credit SO bad?

Deal Score0

I have never had a credit card, mortgage or car loan. I have never filed bankruptcy. I have looked at my credit report and the majority of problems are medical bills. I also have some unpaid utility bills on there. I cannot even get a cell phone without a $ 300 deposit. Why do these things make my credit score terrible? I though CC’s and bankruptcies were the major problems. Can anyone explain?

15 Comments
  1. Reply
    Derrick
    February 24, 2011 at 3:09 pm

    First, you have no credit history (loans, credit cards and mortgages show that you can pay and pay on time).
    Second, the history you do have is all negative.

  2. Reply
    Dav
    February 24, 2011 at 3:26 pm

    Not paying your bills on time can destroy your credit rating. According to what you have described, you never have done any behavior that helps your credit rating.

  3. Reply
    Spankee
    February 24, 2011 at 4:17 pm

    Thats credit for ya…Ive had bankrupties and bad credit cards and i have A+ credit lol.

  4. Reply
    Randi L
    February 24, 2011 at 5:06 pm

    Exactly. You have NO positive credit on your report, only negative. It looks like a. you have no stability (no mortgage, no long term auto) and b. you don’t bother to pay the bills you do have. Of course your credit is crappy!

  5. Reply
    croc hunter fan
    February 24, 2011 at 5:07 pm

    Credit Repair: Self Help May Be Best

    You see the advertisements in newspapers, on TV, and on the Internet. You hear them on the radio. You get fliers in the mail. You may even get calls from telemarketers offering credit repair services. They all make the same claims:

    “Credit problems? No problem!”

    “We can erase your bad credit — 100% guaranteed.”

    “Create a new credit identity — legally.”

    “We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!”

    Do yourself a favor and save some money, too. Don’t believe these statements. Only time, a conscious effort, and a personal debt repayment plan will improve your credit report.
    This brochure explains how you can improve your creditworthiness and gives legitimate resources for low or no-cost help.

    The Scam

    Everyday, companies nationwide appeal to consumers with poor credit histories. They promise, for a fee, to clean up your credit report so you can get a car loan, a home mortgage, insurance, or even a job. The truth is, they can’t deliver. After you pay them hundreds or thousands of dollars in fees, these companies do nothing to improve your credit report; most simply vanish with your money.

    The Warning Signs

    If you decide to respond to a credit repair offer, look for these tell-tale signs of a scam:

    companies that want you to pay for credit repair services before they provide any services.

    companies that do not tell you your legal rights and what you can do for yourself for free.

    companies that recommend that you not contact a credit reporting company directly.

    companies that suggest that you try to invent a “new” credit identity — and then, a new credit report — by applying for an Employer Identification Number to use instead of your Social Security number.

    companies that advise you to dispute all information in your credit report or take any action that seems illegal, like creating a new credit identity. If you follow illegal advice and commit fraud, you may be subject to prosecution.

    You could be charged and prosecuted for mail or wire fraud if you use the mail or telephone to apply for credit and provide false information. It’s a federal crime to lie on a loan or credit application, to misrepresent your Social Security number, and to obtain an Employer Identification Number from the Internal Revenue Service under false pretenses.
    Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the services they have promised.

    The Truth

    No one can legally remove accurate and timely negative information from a credit report. The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete. There is no charge for this. Everything a credit repair clinic can do for you legally, you can do for yourself at little or no cost. According to the Fair Credit Reporting Act (FCRA):

    You’re entitled to a free report if a company takes adverse action against you, like denying your application for credit, insurance, or employment, and you ask for your report within 60 days of receiving notice of the action. The notice will give you the name, address, and phone number of the consumer reporting company. You’re also entitled to one free report a year if you’re unemployed and plan to look for a job within 60 days; if you’re on welfare; or if your report is inaccurate because of fraud, including identity theft.

    Each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — is required to provide you with a free copy of your credit report, at your request, once every 12 months.
    The three companies have set up a central website, a toll-free telephone number, and a mailing address through which you can order your free annual report. To order, click on annualcreditreport.com, call 1-877-322-8228, or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. You can print the form from ftc.gov/credit. Do not contact the three nationwide consumer reporting companies individually. They are providing free annual credit reports only through annualcreditreport.com, 1-877-322-8228, and Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. You may order your reports from each of the three nationwide consumer reporting companies at the same time, or you can order your report from each of the companies one at a time. For more information, see Your Access to Free Credit Reports at ftc.gov/credit.
    Otherwise, a consumer reporting company may charge you up to $ 9.50 for another copy of your report within a 12-month period.

    You can dispute mistakes or outdated items for free. Under the FCRA, both the consumer reporting company and the information provider (that is, the person, company, or organization that provides information about you to a consumer reporting company) are responsible for correcting inaccurate or incomplete information in your report. To take advantage of all your rights under this law, contact the consumer reporting company and the information provider.

    STEP ONE
    Tell the consumer reporting company, in writing, what information you think is inaccurate. Include copies (NOT originals) of documents that support your position. In addition to providing your complete name and address, your letter should clearly identify each item in your report you dispute, state the facts and explain why you dispute the information, and request that it be removed or corrected. You may want to enclose a copy of your report with the items in question circled. Your letter may look something like the one on page 6. Send your letter by certified mail, “return receipt requested,” so you can document what the consumer reporting company received. Keep copies of your dispute letter and enclosures.

    Consumer reporting companies must investigate the items in question — usually within 30 days — unless they consider your dispute frivolous. They also must forward all the relevant data you provide about the inaccuracy to the organization that provided the information. After the information provider receives notice of a dispute from the consumer reporting company, it must investigate, review the relevant information, and report the results back to the consumer reporting company. If the information provider finds the disputed information is inaccurate, it must notify all three nationwide consumer reporting companies so they can correct the information in your file.

    When the investigation is complete, the consumer reporting company must give you the results in writing and a free copy of your report if the dispute results in a change. If an item is changed or deleted, the consumer reporting company cannot put the disputed information back in your file unless the information provider verifies that it is accurate and complete. The consumer reporting company also must send you written notice that includes the name, address, and phone number of the information provider.

    If you request, the consumer reporting company must send notices of any correction to anyone who received your report in the past six months. You can have a corrected copy of your report sent to anyone who received a copy during the past two years for employment purposes.

    If an investigation doesn’t resolve your dispute with the consumer reporting company, you can ask that a statement of the dispute be included in your file and in future reports. You also can ask the consumer reporting company to provide your statement to anyone who received a copy of your report in the recent past. You can expect to pay a fee for this service.

    STEP TWO
    Tell the creditor or other information provider, in writing, that you dispute an item. Be sure to include copies (NOT originals) of documents that support your position. Many providers specify an address for disputes. If the provider reports the item to a consumer reporting company, it must include a notice of your dispute. And if you are correct – that is, if the information is found to be inaccurate – the information provider may not report it again.

    For more information, see How to Dispute Credit Report Errors at ftc.gov/credit.

    Reporting Accurate Negative Information

    When negative information in your report is accurate, only the passage of time can assure its removal. A consumer reporting company can report most accurate negative information for seven years and bankruptcy information for 10 years. Information about an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. There is no time limit on reporting: information about criminal convictions; information reported in response to your application for a job that pays more than $ 75,000 a year; and information reported because you’ve applied for more than $ 150,000 worth of credit or life insurance. There is a standard method for calculating the seven-year reporting period. Generally, the period runs from the date that the event took place.

    For more information, see Building a Better Credit Report at ftc.gov/credit.

    The Credit Repair Organizations Act

    By law, credit repair organizations must give you a copy of the “Consumer Credit File Rights Under State and Federal Law” before you sign a contract. They also must give you a written contract that spells out your rights and obligations. Read these documents before you sign anything. The law contains specific protections for you. For example, a credit repair company cannot:

    make false claims about their services

    charge you until they have completed the promised services

    perform any services until they have your signature on a written contract and have completed a three-day waiting period. During this time, you can cancel the contract without paying any fees

    Your contract must specify:
    the payment terms for services, including their total cost

    a detailed description of the services to be performed

    how long it will take to achieve the results

    any guarantees they offer

    the company’s name and business address

    Have You Been Victimized?

    Many states have laws regulating credit repair companies. State law enforcement officials may be helpful if you’ve lost money to credit repair scams.

    If you’ve had a problem with a credit repair company, don’t be embarrassed to report it. While you may fear that contacting the government will only make your problems worse, remember that laws are in place to protect you. Contact your local consumer affairs office or your state Attorney General (AGs). Many AGs have toll-free consumer hotlines. Check the Blue Pages of your telephone directory for the phone number or check http://www.naag.org for a list of state Attorneys General.

    Need Help? Don’t Despair

    Just because you have a poor credit report doesn’t mean you won’t be able to get credit. Creditors set their own credit-granting standards and not all of them look at your credit history the same way. Some may look only at more recent years to evaluate you for credit, and they may grant credit if your bill-paying history has improved. It may be worthwhile to contact creditors informally to discuss their credit standards.

    If you’re not disciplined enough to create a workable budget and stick to it, work out a repayment plan with your creditors, or keep track of mounting bills, consider contacting a credit counseling organization. Many credit counseling organizations are nonprofit and work with you to solve your financial problems. But not all are reputable. For example, just because an organization says it’s “nonprofit,” there’s no guarantee that its services are free, affordable, or even legitimate. In fact, some credit counseling organizations charge high fees, or hide their fees by pressuring consumers to make “voluntary” contributions that only cause more debt.

    Most credit counselors offer services through local offices, the Internet, or on the telephone. If possible, find an organization that offers in-person counseling. Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate nonprofit credit counseling programs. Your financial institution, local consumer protection agency, and friends and family also may be good sources of information and referrals.

    If you are considering filing for bankruptcy, you should know about one major change to the bankruptcy laws: As of October 17, 2005, you must get credit counseling from a government-approved organization within six months before you file for bankruptcy relief. You can find a state-by-state list of government-approved organizations at http://www.usdoj.gov/ust. That is the website of the U.S. Trustee Program, the organization within the U.S. Department of Justice that supervises bankruptcy cases and trustees.

    Reputable credit counseling organizations can advise you on managing your money and debts, help you develop a budget, and offer free educational materials and workshops. Their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting. Counselors discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems. An initial counseling session typically lasts an hour, with an offer of follow-up sessions.

    For more information, see Knee Deep in Debt and Fiscal Fitness: Choosing a Credit Counselor at ftc.gov/credit.

    Do-It-Yourself Check-Up
    Even if you don’t have a poor credit history, some financial advisors and consumer advocates suggest you review your credit report periodically

    because the information it contains affects whether you can get a loan or insurance — and how much you will have to pay for it.

    to make sure the information is accurate, complete, and up-to-date before you apply for a loan for a major purchase like a house or car, buy insurance, or apply for a job.

    to help guard against identity theft. That’s when someone uses your personal information — like your name, your Social Security number, or your credit card number — to commit fraud. Identity thieves may use your information to open a new credit card account in your name. Then, when they don’t pay the bills, the delinquent account is reported on your credit report. Inaccurate information like that could affect your ability to get credit, insurance, or even a job.

    Sample Dispute Letter

    Date
    Your Name
    Your Address
    Your City, State, Zip Code

    Complaint Department
    Name of Company
    Address
    City, State, Zip Code

    Dear Sir or Madam:

    I am writing to dispute the following information in my file. The items I dispute also are encircled on the attached copy of the report I received.

    This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information.

    Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please investigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.

    Sincerely,
    Your name

    Enclosures: (List what you are enclosing)

    The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit http://www.ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

    December 2005

  6. Reply
    paleblueshoe
    February 24, 2011 at 5:35 pm

    Why wouldn’t your unpaid debts make your “credit score terrible?” ALL financial information is reported on your credit report… medical and utility bills included.

    Anyone you’ve asked for more credit can see that you don’t pay your bills… and won’t be very likely to extend credit to you, the cell phone company included. (They’re NOT in the business of providing a cell phone to someone that has a history of non-payment.)

    Grow up. Pay your bills… all of them.

  7. Reply
    Suzuki_Mouse
    February 24, 2011 at 6:33 pm

    You have yet to establish yourself in the “credit” world. While medical bills & utility bills don’t really give you any help in establishing credit, unpaid ones will hurt you more than you’d think.

    I am hoping that you are taking steps to pay off your medical & utility bills… this will help your situation when those no longer appear on your credit report. As far as a cell phone… consider getting a pre-paid (there are several offered by different carriers).

    To start boosting your credit score – and please do so responsibly – you may want to look into getting a SMALL-limit credit card, maybe through your bank. Use it for something like gas or groceries, pay it off when the statement comes in. You’ll be tempted to say “oh, well the minimum is only $ … I’ll just pay that.” Don’t fall into that!

    But if you start with the cycle of paying it off each month… you’ll see your credit start to improve, which will make it easier to eventually get the cell phone or the car loan or mortgage in the future.

  8. Reply
    stacy
    February 24, 2011 at 7:21 pm

    1) have NO credit (card) history, coupled with unpaid bills makes your credit score lower
    2) unpaid medical bills can be avoided by making small monthly payments until the debt is cleared up (I’ll be paying until I die). Additonally, if you has asked for the companies to write of your charges, [many will do this (in hardship cases) to help you] you
    could have avoided this as well.
    3)Try siging up for a fixed rate for utitlies to help you budget better.

    Your current status will remain for about 7 years, but you could improve it with a lot of hard work. Hang in there. You are not alone.

  9. Reply
    Annillie
    February 24, 2011 at 8:07 pm

    Utility bills that go unpaid are nasty for your credit, afterall if you’re not paying for things you really need why would you pay for extras like a cell phone?
    Since you mention most of the bills are medical, it doesn’t sound like you’re too healthy, so can they expect you’ll be out of a job soon? This may not be fair but it’s the facts they look at.
    You have to get a handle on your bills, pay them on time and in full. Once that’s established you can apply for a credit card. In order to work up your credit rating you’ll have to keep payments on time and occasionally you should pay the balance off.
    It takes time to build good credit, sometimes years, it takes one month of not paying to botch it.

    Most places ask for deposits now

  10. Reply
    amd s
    February 24, 2011 at 8:56 pm

    Utility bills & medical bills, if you don’t pay them, those companys call the credit beuro to give you a bad score, do to the fact that you missed out on some payments, thats why they got you Social Secirty #, anytime payments not being paid or late they they notes & return statues to the credit beuro. The best advice I can give you is -to pay your bills-, you’ll be fine, and dining with lots of wine and laughter, lol.< busting my raping ryhm. Yes CC"s & bankruptcies are also the major one's that affect you on the long run. Medical bills & Utility bills-you can call your credit beuro, and tell them your sad story & why you did not make your payments>lost job, don’t wan’t to pay & i thought I can sweep buy it, etc….
    Show credit beuro that you can make the payments, and you will see improvements on your score.

  11. Reply
    nirupoma h
    February 24, 2011 at 9:34 pm

    I am gonna tell u from my own experience. I had a bad credit history,[not for my fault,but it doesn’t matter to those credit companies]
    But fortunately ,not all the credit card companies cared about them.
    So first applied to some of those credit cards . U will get one .
    Now ,unpaid utility bills are very bad for Ur credit rating. So paid them right away. By cash or credit cards.About the medical bills, give them a call and make a arrangement with them to pay at least $ 10. a month.Do it religiously.or if u hv a forget full mind, arrange a automatic withdrawal from yoUr account.After 2 month give the credit company a call to say that u don’t have any unpaid things and ask them to fix Ur credit history. U r on ur way to hv a good credit ratings.In this country if u don’t have a credit card that means u r unable to maintain a regular repayment.So if u wanna live in this society , with a good credit ratings [ which is vital if u wanna buy a house or a car or anything], a credit card is a must .

  12. Reply
    Super - Level 5
    February 24, 2011 at 10:14 pm

    You might want to visit for many articles on the credit score:
    http://www.freewebs.com/infosource100/credit.html

    “Top Credit Score Factors and Disputing Bad Credit

    By R A Smith

    Do you often have too much month left at the end of your money? While you strive to pay your monthly bills on time, computers are keeping a close watch on your performance.

    Automated programs keep score on your payment punctuality, and other financial information, which have a direct impact on your ability to qualify for a loan, and the interest rate you will be offered. A score of 700 or better can provide the lowest rates, while a score of 620 or less can mean the highest rates, or possibly no loan at all.

    3 Primary Factors That Influence Credit Scores:

    Late Payments – Not considered late until 30 days past the due date. 60 or 90 day late payments are more negative than a 30 day late. The age of late payments can influence credit scores. Recent late payments are considered worse than older ones. More serious issues include: consumer credit counseling, collections, bankruptcy, and foreclosure.

    Outstanding Debt – Having a large number of open accounts can reduce your credit scores. Another issue is the ratio of your credit limit compared to the current balance. Using 75% of your credit limit is a greater risk than using 25%.

    Account History – Older credit accounts can have a positive effect on credit scores, as long they are not delinquent. Having recently opened accounts could reduce your scores. Also, multiple inquiries indicate a possible new account, which may cost a few points.

    Incorrect information can sometimes appear on a credit report. If you believe there is a potential error on your credit report, you are entitled to dispute the accuracy of the information. The federal Fair Credit Reporting Act gives you the right to challenge inaccurate information by contacting the reporting agencies, and the company who reported the information. Under the FCRA, they are responsible to correct any errors on your credit report free of charge, and within a specific time limit.

    The credit bureaus, Experian, Equifax, and Transunion, are required to investigate your dispute within 30 days of reporting the potential error. They will contact the source of the derogatory information and try to confirm the record. Providing documentation to support your claim, if you have any, can also expedite the process. If the credit bureaus are unable to confirm the derogatory information from the source, the item must be removed from your credit report, which can improve your score. “

  13. Reply
    Luckys Charm
    February 24, 2011 at 10:51 pm

    Get a copy of all you reports from
    annualcreditreport.com its free. Then dispute every negative item on your report. hospital bills are the easiest to fall off. Even if its your debt dispute it. Let me know what happens.

  14. Reply
    bettyboop
    February 24, 2011 at 11:30 pm

    you don’t have to have a mortgage or car loan, it’s what you put on your credit report. yet you can still fix it. call all the dept collectors for the medical bills, don’t pay the amount that is shown make a payoff offer (example) the amount is $ 300.00, offer $ 150.00 and say you can pay this right now and don’t back down they will take it. utility bills I have never experience this but call the creditor to pay them off. when this is done go to creditcards.com and get two credit cards to estiblish credit and make sure you pay everything on time and check your scores for updates. also make sure you tell the creditors to update thier information on your credit report.

  15. Reply
    ownlee_me
    February 24, 2011 at 11:46 pm

    You don’t have any credit to build up. You need to get a credit card or loan to get your credit rolling.

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