topic Re: Just got my social and a bad surprise in Understanding FICO® Scoring

Just got my social and a bad surprise

AlwaysUp — Tue, 24 Apr 2012 01:30:27 GMT

Hi,

So I'm an international student. I'm 20. I just got my SSN today. I have a Wells Fargo Secured CC with a $1000 limit. The card is 7 months old. I was very excited this morning when I got my social. My State Farm agent told me that I was pre-approved for a CC and as soon as I get my social, they'll fill out the application for me. I contacted him today, he submitted the application and then got back to me with a very bad surprise. He told me that my application was denied because I have an account on collection. I went to check my scores online and I found 2 accounts that have been reporting even though I didn't have a social (They used first, last name, BOD and address). It was my CC with WF and a collection acccount for $572 from T-Mobile. I nevever used T-Mobile before, it wasn't me.

I filed a police report for identity theft and I'm gonna submit disputes with all the bureaus, but I'm expecting the worst. If my dispute get denied, I'm gonna have to pay that account because I don't want more problems. My question is :

How bad it will look if I pay the CC account? What score am I gonna start with? If the collection is removed, and I'll only have my CC on good standing, what is the score I should expect?

If I don't pay the account, how bad this baddie would impact my score? I couldn't get a score today since I just got my social, they said it takes up to a month...

I'm really frustrated specially when I was gonna apply for a auto loan in June..

Thank you for your answers and sorry for my bad grammar.

Re: Just got my social and a bad surprise

cassembler — Tue, 24 Apr 2012 01:55:03 GMT

Couple of things:

The accounts may not be fraud, might be another person with the same name. Besides, committing identity theft for a service (with a contract), much less a phone, sounds like poor planning on a criminal's part. Your best bet is to dispute the account to each of the three bureaus. If they get denied, dispute them again. If it's not yours, it's not yours.

Secondly, pay the WF. Pay the WF card. Make a payment towards the WF card. Go online or write a check to pay the WF card. Then, make sure WF got your payment. Regardless of any plans, always pay your debt obligations on time. Always. (When reasonably possible, of course).

Next, your initial score probably won't be great. Very short AAoA (average age of accounts), and only one open line of credit. I'd suggest opening another line of credit after your collection is removed - a builder card such as Cap1 (you should probably aim for a non-secured card at least).

Finally, there's probably no way around it - you'll need a co-signer for the car loan. The good news is that by the time you've paid the car off, you should already have or be in position for a nice premium card. See the auto forums for more details.

Re: Just got my social and a bad surprise

AlwaysUp — Tue, 24 Apr 2012 02:09:33 GMT

Thank you very much for your answer! My WF card is in a very good standing. I'm also self employed, I own an LLC and I make 5-6K / Month. I'm planning to put 50% down of the price of the car, since I don't have any relatives here. If the collection doesn't go away, how bad it would hurt my score and mess up my plans ? Even though I would pay it ?

The collection lady on the phone said that it's me because it has my name, dob and my adress, I said no way I've been with At&t since I got to the US.. She answered by saying that anyone who knows my dob, name and address can do a lot of bad things with it. I remember that I lost my wallet few months ago but I never reported it... I feel dumb now.

I know my score wouldn't be that good because of my AAoA, but do you have any range in mind ? I applied for a Secure Card with capital one (just to make sure I get it I don't want to be declined).. I'm waiting for an answer... typically 7 to 10 days. Also, my banker said that with my LLC I'm pre-approved for an unsecure Business CC that will report to my social... Should I accept the offer?

How many cards should I get ? Is it a good idea to apply for a gas credit card? Am I gonna get turned down if the collection doesn't go away (that's my nightmare)

Thank you again for all your help and sorry for my questions, I'm really confused and frustrated.

Re: Just got my social and a bad surprise

Revelate — Tue, 24 Apr 2012 03:23:47 GMT

I wouldn't pay it straight up. It's not yours, this sort of thing is fairly common where they just toss it on the best matching profile. I'd certainly contact the collection agency and T-Mobile (contact info should be on the credit report under the tradeline), and get it fixed.

Look in the Rebuilding credit form: there's a ton of information on Debt Validation (DV for forum shorthand), which was absolutely designed for you as the collection isn't yours.

As for the WF card: absolutely pay it. Never, ever take a derogatory mark you don't have to.

Re: Just got my social and a bad surprise

AlwaysUp — Tue, 24 Apr 2012 03:29:21 GMT

I called them, the woman from the CA said make a police report for identify theft (I just did it this evening) and then mail it to us. Then we will contact T-Mobile for you and remove it. With my luck, it sounds too good to be true lol. Does it sound right to you ?

Thanks!

Re: Just got my social and a bad surprise

webhopper — Tue, 24 Apr 2012 21:20:17 GMT

AlwaysUp wrote:
I called them, the woman from the CA said make a police report for identify theft (I just did it this evening) and then mail it to us. Then we will contact T-Mobile for you and remove it. With my luck, it sounds too good to be true lol. Does it sound right to you ?

Thanks!

That sounds like that is correct... There's no way that its you! They will fix it, and then you mail a COPY of the police report to the credit bureaus and they will fix it

Re: Just got my social and a bad surprise

AlwaysUp — Tue, 24 Apr 2012 21:29:14 GMT

Hold on I don't get it! She said that as soon as I send them the police report, they will forward it to T-Mobile and then they will take the account off my credit record since it's a fraud. That implies that I don't have to file a dispute with the bureaus since the CA is gonna take out by themselves ? Right ?

Re: Just got my social and a bad surprise

cassembler — Thu, 26 Apr 2012 03:48:29 GMT

Judgement call on your part. I'd follow your gut. Unless you need a clean report asap, I'd consider one thing at a time.

Re: Just got my social and a bad surprise

AlwaysUp — Thu, 26 Apr 2012 04:02:37 GMT

Yes I need a clean report asap since I'm gonna apply for a car loan in June.. I don't want to have any baddies! The PD here are slow, they said come back in a week to get a copy of your report.. Then I have to fax it to the CA then wait until maybe they take it off my CR..

Re: Just got my social and a bad surprise

cassembler — Fri, 27 Apr 2012 00:47:58 GMT

So in that case, then I'd dispute directly with the CRAs. You can find info on that process in the "Repairing Credit" forum.

Re: Just got my social and a bad surprise

AlwaysUp — Fri, 27 Apr 2012 01:46:29 GMT

I just got my first generated scores lol, it's horrible :

EX: 639 , EQ : 563

I need to have that collection removed sooon!

Re: Just got my social and a bad surprise

haulingthescoreup — Sat, 28 Apr 2012 05:31:15 GMT

Keep following the advice that you're getting here, and I'll add (because I didn't see it, although maybe I missed it), paying a collection will NOT remove it from your reports.

Hang tough, follow up with the police report, and get that thing off.

Just to clarify: there isn't a problem with your WF card, right? it's just that you were surprised to see it there? No mystery charges? If so, plan to pay it off every month. Don't carry a balance.

If the collection is removed, my guess is that your scores will be around 680 with just one card that is over 6 months but less than 1 year old. AFTER the collection is off all reports, you might want to add one more card. Your score won't drop when you add a second revolving account (as opposed to adding the 4th or 7th or 10th), and once it has reported for six months, in addition to your WF, I would expect that you would have scores around 720, as long as you have no negatives of any kind and low reported utilization.

Re: Just got my social and a bad surprise

AlwaysUp — Sat, 28 Apr 2012 14:27:01 GMT

I have no problem with my WF card. I just maxed out few times and it's showing up on my reports. I asked for a CL increase, I'm gonna try to incease it to 3K in the next 30 days in that way it doesn't look too bad on my CR.

I just need to get a copy of the police report, and they're taking forever here... I will let you guys know how it goes.

Thanks a lot for all your help!

Re: Just got my social and a bad surprise

haulingthescoreup — Sun, 29 Apr 2012 00:01:55 GMT

If you'll pay it off every month BEFORE the statement posts, so that it reports a $0 or very low balance, you'll get the same effect as that from a CLI. ;)

The score formula looks at percentage of CL being used, so it doesn't matter if it's $250 out of $500 or $2500 out of $5000. Make it report only $10, and the lowered percentage will help.

Re: Just got my social and a bad surprise

AlwaysUp — Sun, 29 Apr 2012 00:11:29 GMT

Yes but the problem is that it's showing on the report that I maxed out the card one, it will never go away and it looks bad for the lenders (that's what my banker friend said). He recommended that I increase my CL in that way it doesn't look so bad. So with a 3K limit, the maximum balance ever reported will be $992, it will be around 30% of my CL. Better than the 99% I currently have. I hope I'm enough clear.

I also got approved for a capital one secured card (I applied for a secured one), should I confirm that I want the account or no ? Would that hurt my score? Currently I only have 2 accounts, the fraud collection and my WF card. Should I add the cap one card ?

Re: Just got my social and a bad surprise

haulingthescoreup — Sun, 29 Apr 2012 00:20:30 GMT

AlwaysUp wrote:
Yes but the problem is that it's showing on the report that I maxed out the card one, it will never go away and it looks bad for the lenders (that's what my banker friend said). He recommended that I increase my CL in that way it doesn't look so bad. So with a 3K limit, the maximum balance ever reported will be $992, it will be around 30% of my CL. Better than the 99% I currently have. I hope I'm enough clear.

I also got approved for a capital one secured card (I applied for a secured one), should I confirm that I want the account or no ? Would that hurt my score? Currently I only have 2 accounts, the fraud collection and my WF card. Should I add the cap one card ?

Oh, OK, gotcha, I see what you're saying. It's true that other lenders might ask you how that happened. It probably isn't an automatic denial reason though. Just tell them that you use credit, and with a low-ish CL, it didn't take much to max it off, but that you do pay your bills promptly. I've actually got an historical balance reporting on a card that is higher than its current limit, because I moved the CL's around between it and another card from the same lender (USAA.) I've never had anyone ask about it, though. If they want to dig, they can see that the limit at the time was higher than the balance, of course.

Since you've already applied for the secured Cap One, I'd go ahead and take it. No point wasting a hard pull on all three bureaus. :P Keep using it, along with the WF, and keep building a string of clean history, month after month, while getting the fraudulent collection off. You'll look good to future lenders once you have at least a year of history on the older card and six months on the newer card, all clean.

Re: Just got my social and a bad surprise

AlwaysUp — Sun, 29 Apr 2012 00:24:14 GMT

It doesn't bother me increasig the colleteral account with WF to increase my limit. $3000 credit line looks better than a $1000 anyway. I'll go get the cap one, get the collection off and then go get my car loan. I'm gonna put 40% of the car price down, I hope they're not gonna rip me off with interests. Thanks a lot !

Re: Just got my social and a bad surprise

cassembler — Sun, 29 Apr 2012 15:51:58 GMT

AlwaysUp wrote:
It doesn't bother me increasig the colleteral account with WF to increase my limit. $3000 credit line looks better than a $1000 anyway. I'll go get the cap one, get the collection off and then go get my car loan. I'm gonna put 40% of the car price down, I hope they're not gonna rip me off with interests. Thanks a lot !

Good luck with everything. Remember, the folks on the Auto forums here are a good bunch and can help you if you have any questions. (BTW, 40% down is great!)

Re: Just got my social and a bad surprise

AlwaysUp — Sun, 29 Apr 2012 19:57:47 GMT

Are these Fako or Fico ?? ( From Equifax Website )

This is what I got from TU website :

The score is different from Equifax. And what does Grade D means ??? There is grades now ? It's funny!

Re: Just got my social and a bad surprise

MarineVietVet — Sun, 29 Apr 2012 19:57:51 GMT

Those are FAKO's. Those scores are based on the private "Equifax Credit Score" sold by EQ but they are not FICO scores and are not used by any lenders.

Equifax will still sell you a FICO score found here: www.equifax.com/web-myfico-products/