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credit report

Q&A: More credit score drama over a missed payment

May 20, 2024 By Liz Weston

Dear Liz: You responded to a woman who was concerned that a missed payment had hurt her credit score. My situation is also about a missed payment. In fall 2018, I received a dunning letter from a bill collector. I did a ton of research because I never received the bill that ruined my previously stellar credit rating (840). My rating sank by 200 points even after the retailer involved acknowledged that I never received the bills. Their office showed all the bills, although addressed correctly, were returned as undeliverable. The executive with whom I had lots of interaction wrote all the bureaus explaining the error was the retailer’s. The credit bureaus did nothing to restore my credit rating. It has been six years and I continue to pay in full on time as I had for the 45 years before 2018. My payment behavior has done little to improve my low score. Maybe 2025 will bring relief, as that will be seven years since the collection letter.

Answer: Your situation offers the opportunity to clarify a few things that confuse many consumers.

The first and most important: We are responsible for paying our credit card bills whether we receive those bills or not. Mail goes astray, emails wind up in junk folders, but if there’s a balance on our credit cards we’re supposed to pay at least the minimum when the due date rolls around. As mentioned in the previous column, setting up automatic payments can prevent missed payments. At a minimum, you should mark your calendar with your cards’ due dates and submit your payments, preferably electronically, in time to avoid late fees. Having online access to your credit accounts can help you track balances, and you can set up email or text alerts to remind you to pay.

Next, the executive you talked to either didn’t understand the credit reporting system or wasn’t entirely frank with you. The credit bureaus’ files reflect what creditors tell them. It’s a dynamic system, with information constantly being updated. If the retailer agreed that the late payments shouldn’t be reported, then it should have stopped reporting the erroneous information. Instead of corresponding with the bureaus, the executive should have been talking to the retailer’s finance arm.

If the executive provided you with a copy of the letter sent to the bureaus, however, you can use that to correct the record. Dispute the late payments with the bureaus and use the letter to back up your claim.

By now, your scores should have regained most of the ground lost to this unfortunate incident. If that’s not the case, something else is wrong with your credit reports. You should request free copies of your reports from AnnualCreditReport.com and scrutinize them closely. (If you’re asked for a credit card, you’re on the wrong site.)

Filed Under: Credit Cards, Credit Scoring, Q&A Tagged With: Credit Bureaus, Credit Cards, credit report, Credit Score, Credit Scores, credit scoring, late payment, Late Payments

Q&A: Great credit, but rejected for a credit card. What gives?

April 1, 2024 By Liz Weston

Dear Liz: I recently applied online for a credit card and was rejected, as my credit reports were frozen. I thawed them and applied again, only to be declined again. I received a letter stating that the rejection was because I have no installment credit history. I have no debt, credit scores in the mid-800s and $2 million in retirement accounts. Our paid-for home is valued at approximately $1million. This makes zero sense.

Answer: Federal law requires credit card issuers to send the “adverse action” letter you received to explain why your application was denied. But that letter doesn’t have to be the last word.

You can call the issuer and politely ask that your application be reconsidered. Most credit applications are evaluated by algorithms, rather than people. Getting a human involved can make all the difference, so you’ll want to get this person on your side. Be friendly and polite.

Mention all of the factors in your favor, such as a steady income and a (presumably) long history of handling credit cards responsibly. Explain that you don’t have an installment loan, such as a mortgage, because your home is paid off. If you have an existing relationship with the issuer, such as other credit cards or bank accounts, mention that as well.

There are no guarantees you’ll be successful if you ask, but you’re guaranteed not to get the card if you don’t ask. Good luck!

Filed Under: Credit Cards, Credit Scoring, Q&A Tagged With: appealing a credit card rejection, appealing a credit decision, applying for credit, credit application, Credit Cards, credit report, Credit Score, Credit Scores, credit scoring, installment loans

Q&A: Here’s what you should do about suspicious credit report activity

August 1, 2022 By Liz Weston

Dear Liz: I recently obtained copies of my credit reports from the three major credit bureaus and discovered my brother’s home address listed in the personal information section. I am extremely concerned about how and why this happened since I have never lived with my brother. This brother is the executor of our father’s estate, and the address listing was dated just before the distribution of that estate. What possible reason could my brother have for searching my credit background? I have zero communication with him because of an ongoing feud. He ignores any requests or inquiries. After I discovered this, I asked the bureaus to remove the address and put security freezes on all three credit reports, which I probably should have done sooner.

Answer: Your brother’s address wouldn’t show up in your credit reports in the unlikely event he had checked your credit. It might show up there if he had committed identity theft using your information, but if nothing else was amiss — you didn’t spot a credit account or loan you didn’t recognize, for example — then most likely the error was made by a creditor or other company that reports information to the credit bureaus.

The federal Fair Credit Reporting Act limits who can access your credit reports. Only businesses with a legitimate need to know the information can do so, and often your permission is required. You can check who has accessed your credit during the last two years in the “inquiries” section of your credit reports.

You may never discover exactly how your brother’s address wound up in your file, but you took the right steps in disputing the error and in freezing your credit reports.

For readers not as credit-report savvy: You can access your reports for free at AnnualCreditReport.com. But be careful; lots of sites want to sell you your reports from Equifax, Experian and TransUnion. If you’re asked for a credit card number, you’re on the wrong site.

When you get your reports, look for accounts that aren’t yours and other suspicious activity. Consider freezing your credit reports at each of the bureaus to prevent someone from opening new accounts in your name. You can thaw the freeze whenever you need credit, also for free.

Filed Under: Credit Cards, Credit Scoring, Q&A Tagged With: credit report, q&a

Thursday’s need-to-know money news

June 23, 2022 By Liz Weston

Today’s top story: Is medical debt disappearing from your credit report? Also in the news: A new episode of the Smart Money podcast on tackling the racial wealth gap, using the 25-year-rule to buy a cool, cheap are, and how to check if your new circuit breaker is part of a serious recall.

Is Medical Debt Disappearing From Your Credit Report?
Health care bills are about to become far less threatening to the financial well-being of millions of Americans.

Smart Money Podcast: Taking On the Racial Wealth Gap
This week’s episode is dedicated to a conversation with journalist Kimberly Atkins Stohr. We discuss her series about how to solve the racial wealth gap.

Use the 25-Year Rule to Buy a Cool, Cheap Car
Tiny ’90s-era Japanese imports are having a moment. Here’s what you need to know.

Check If Your New Circuit Breaker Is Part of This Serious Recall
Approximately 1.4 million electric panels are included in the recall.

Filed Under: Liz's Blog Tagged With: 25-year-rule, circuit breaker recall, credit report, medical debt, racial wealth gap, Smart Money podcast, used cars

Is medical debt vanishing from credit reports?

June 22, 2022 By Liz Weston

Health care bills are about to become far less threatening to the financial well-being of millions of Americans.

The three major credit bureaus are erasing most medical debts from people’s credit reports, and the Biden administration is reducing or eliminating medical debt as a factor in government lending decisions.

In my latest for the Associated Press, what you need to know about medical debt now.

Filed Under: Liz's Blog Tagged With: credit report, medical debt

Friday’s need-to-know money news

May 7, 2021 By Liz Weston

Today’s top story: 8½ birthdays that can affect your finances. Also in the news: How to navigate the costs of starting your van life, how to befriend your money and reap the benefits, and how long something stays on your credit report.

8 ½ birthdays that can affect your finances
Mark your calendars.

How to Navigate the Costs of Starting Your Van Life
Turning a vehicle into a home requires research and often a big budget. Here are some tips for getting started.

Befriend Your Money and Reap the Benefits
Looking at your money as a friend.

How Long Does Something Stay on Your Credit Report?
Most credit activity stays on your report for seven years.

Filed Under: Liz's Blog Tagged With: befriending your money, birthdays, credit report, credit report activity, financial milestones, van life

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