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Hi Fools,

I just paid off my last credit card (first time in 9 years ... no CC debt. YEA!!!!) and then ordered my credit reports.

Now I have a couple of quick questions. I plan to buy a house next summer (July/August 1999) and want to clean up my credit reports. Also, I have a full time job and realistically will be able to easily afford the mortgage and taxes for the range of houses I'm interested in.

First, I found a *ton* (3 pages worth) of those "pre-screening" checks on my reports. What affect do they have?

Second, "Dings": I had a bad spell a few years ago and in a very short period got a bunch of 30 day late CC dings (about 5 at once or right next to each other, but no 60 or 90 day dings, at all, ever). These were a one time thing. How do they affect my credit rating?

Also, I have a few other unexpected 30 recent day dings on my report that I really can't figure out what to do about. One is from my car lease which is supposed to be on an automatic payment, but they reported me (within last 12 mos.) on the month just before the automatic payments were started (it could be an error, but I'm really think that the paperwork didn't get processed in time for the cut over).

<RANT>
One was a legitimate late ding and fairly recent too (within last 12 mos.), but I called the CC company and they said they wouldn't report it if I mailed the check when I told them I would (even though it would be late). I did, but it got reported anyways. Arrgh!
</RANT>

So, what can I do to clean it up, and how do late dings affect my credit rating? Thanks in advance for your feedback.

- ChicagoBob
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When they are approving the mortgage they MAY ask for an explaination of the late payments. At that time explain that late carpayment happened when the paperwork got hung up on the automatic payment. The late credit card was I lost the check under the couch etc. Since you have no debt the lates should bite you too bad. It is a good idea to close most of the credit cards so that you don't have $50K of available credit line. Call up the credit company and ask them to close the account and to send you letter stating the account was closed at the OWNERS request.

~~paul
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Arrggg, I need to proofread the proofreading. The late payments should not bite you too bad.

~~paul
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Bob,

The 'pre screening' should not make any difference on your mortgage application at all. There are a few posts the past few days on how to deal with those by writing the credit Reporting companites and requesting your account not to allow to be pre-screened. I would recommend you look through those posts on this board as well.

As for cleaning up your account there are a number of books in various book stores that I have seen in their personal finance sections, usually titled 'Credit Repair'. A number of them have a good candadite list of 'Form' letters to send to the credit reporting agencies to dispute any late payments that you feel are disputable. They give you a good idea on what to write and how to deal with the reporting compaines. This might get a little lengtly since your shooting letters (snail mail) back and forth and waiting for responses. I would start this as soon as possible and have it all resolved before you even apply for you mortgage if at all possible.

As for your mortgage, it depends on your lenders requirements what you will need to do. Typically, I have seen where you have to provide in a written statement as to any late payments as well as organizations looking into your credit report recently. These are full inquiries not the 'pre-screens' as mentioned above. What the Lender is interested in is making sure you did not apply for a 25K line of credit at the same time you applied for a mortgage or something like that, that would not show up as a real account yet on your report. That is by getting written statements from recent credit inquiries to your credit history.

I also agree with pwyles, Close as many of the old accounts as you can and review the report before to verify that it is marked "Closed at consumers request".

Congratulations on Getting out of CC Debt!! And Good Luck with the House.

Rob

Bottles
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Dear Chicago Bob,

At last I have found a person with a few similarities
in terms of the credit report "dings" as you call them.
Prior to 1991 I had an outstanding credit record and
report. In 1990, I was unemployed due to an on-job
injury. While I awaited settlement of my workmens
compensation case, I had no income. I had exhausted all of my savings and retirement funds.
During that time, I had two accounts which were 30 days late and one account that was 60 days late. As soon as my case settled, I paid all of my accounts, returned to work in 1994 and have made timely payments ever since.

When I began to apply for lower interest credit cards to do balance transfers, my applications were declined. It happened several times even though
I have had an excellent credit report since 1994. When my husband and I applied for refinancing, the lender was hesitant because they said I didn't have
A1 credit. Here's my point. Those dings hurt and
follow you longer it seems that whatever good track record you may have established in the past. Also,
you would be amazed at the amount of erroneous
information contained in your credit report.

Now that lenders use some formula (I don't know the specifics), it seems to disqualify people who are not really poor risks by placing you in a "suspect" range. Challenge any information on your credit report that you are not in full agreement with. It matters.
Don't wait until you find your dream home and have your loan either declined or have to pay a much higher interest rate to get approval from the bank. I wish you
well in your endeavor.
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I would dispute EVERYTHING that is a negative on your credit report, whether it is true or not. The reason is this: The credit reporting agency (Experian, etc.) will request verification from the creditor (Visa, etc.) and they have a set time frame to either acknowledge the discrepancy or verify that the credit report is true. I beilieve this to be somewhere between 30 and 60 days, and it may vary depending on your state. If the creditor does not respond within the time frame, the "ding" is automatically removed from your credit report.

You will need to do this for each credit reporting agency. The worst case scenario is that nothing changes on your credit report. The best case is that some of those "dings" could be erased.

Good luck!

David (But I'm not) Boring
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Just thinking - wouldn't it be nice if there were people on this board who actually work FOR the credit bureaus, or have in the past - who could give us some real info about their mysterious ways? It seems like here it's all a collection of "I heard this" or "This happened to me but I'm not sure why" or "They have some formula ..." Which is all really helpful and interesting - but it's like whatever little information we can chip away from this big unknown thing. Whereas obviously SOME people know the specifics! Sure would be nice if they could share ...

Also, just had to say I really have appreciated this board since discovering it a week or so ago - I'm finally getting serious about paying down my debt and the info & suggestions here have been great.

Oh yeah - just got a copy of my credit report, and as far as the "inquiries", it said "The following inquiries will be reported to anyone asking for your credit report," and there were like 5. Then there were 3 or 4 pages of "These will not be reported." Don't know how they determine which are which (not by date!) but it seems like it shouldn't be an issue for potential creditors.
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Hi ChicagoBob! Congratulations on becoming debt free! I just wanted to add to my fellow Fools' comments.
#1 My fellow Fools are correct, the prescreens on your credit report (usually noted as "PRM" or "promotion") do not count against you, but if you want to stop these in the future see my post Re: unrequested card in mail, on 4/7/98 for the names and addresses to put a pre-screen block on your files.
#2 You cannot have legitimate bad information removed from your credit report (despite claims from "credit repair" firms), but you can dispute any inaccurate information with the credit reporting agencies. You should have received forms to do this with the copies of your credit reports. The creditor has 30 days to prove the disputed item (though there is a provision for a 15 day extension) or the item must be removed. If the reinvestigation does not resolve the dispute, the consumer may file a brief statement setting forth their side of the story. Thereafter, the report must show that the item is disputed and the credit reporting agency must provide the consumer's statement or a summary thereof to anyone receiving copies of the report. The procedure for disputing information in your credit report is spelled out in the Fair Credit Reporting Act which can be found at: http://www.ftc.gov/os/statutes/fcra.htm (see Section 611 Procedure in case of disputed accuracy). This site has the full text of the FCRA which other Fools might also find helpful when you have a question about your rights as a consumer when dealing with creditors.
#3 Those unresolved "dings" will count against you when you apply for a mortgage, but how much depends on the creditor. Unfortunately bad (but correct) information can stay on your report for 7 years, but the further you get away from it the better off you'll be. As other Fools have noted: Close all but one or two of your open credit card accounts and keep the remaining ones paid in full.
Sorry for the lengthiness of this post, but I hope you found it useful :-) Oh, and it's great you're trying to take care of this now and not waiting until it's time to shop for your mortgage!
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A couple, well few years, well 2-5 years ago when I was in cc debt, there were payments to the card holders that were 30 and 60 days late. It wasn't until about 2 yrs ago that i started closing accts (YEA!) and requested my first credit report. No "dings" showed up. I don't know what you guys/girls are talking about.

"you would be amazed at the amount of erroneous
information contained in your credit report. "

You aren't kidding! Errors like accts that you never opened at Profits store or Merchants. Oh, and statements like "account closed at grantors request".
Before applying for a mortgage, you should get a copy of your credit report at different time periods (hopefully for free--but $8 for each isn't that much). Each change that's made by you or the grantor will take 30 days or less (by law), so, if you have letters to write, write them all at once. Wait for confirmation letters (confirmation that something has been done--not confirmation that they recieved your letter) and then get a copy of your credit report again. Check it out again and proceed from there. The c. report will give you addresses of all accts (opened or closed).
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Thanks all for your feedback.

I will close the few open but inactive cards I still have. I found three (no fee / emergency cards) that I had stuck in a drawer, but forgotten about -- because I wasn't getting statements.

I will hope that the ancient late dings don't hurt and I will try to remove/explain any recent ones.

Hopefully, that will do the trick.

Thanks & Fool On!

- ChicagoBob
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Only a foolish fool would give up so easily.
Some credit repair companies have a successful track record in Improving clients reports over the course of a year for a nominal fee.
If you are hesitant, there are some law firms that will charge per item removed (between 35-50 for each of the three bureaus) so you have no risk.

Also, you can do it yourself if you have the poatience and determination. You must keep good records and send everything Certified mail.
When Experian, etc. verifies an item send them a letter demanding to know the name and address of the party who verified the info.

You can send them a letter saying you were never late, never had an account or paid as agreed.

Also, most schools would stop reporting to the bureaus once you pay. They rely on their alumni and gain nothing from reporting.

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