Why Is My Score So Low?

[Anonymous]

Why Is My Score So Low??

I cannot figure out why my credit score is so low. I was stunned to find that my score is 563 as of Aug 2, 2009 when we bought the home 03/31/08 it was 622. I have never been late on a mortgage payment.

I have 30 positive paid accounts (although I don't have 30 ACTIVE accounts).

1 collections account for $67

I have $48K in student loan (current) and haven't been past due since...ever.  

The house was $75K (current) never been late.

3 credit cards with tot bal of $1300 all current, but closed by consumer (one cc bal is $114, one is $1000, and the other is $100 something). Was late 120 days on two August 2008 (a year ago).

1 account from AGF reporting at $2200 something, but is $1986 as of today's date. Never late.

I suspect the closing of the credit cards caused this issue, but I cannot get them re-opened. First Premier won't re-open b/c they say I cannot have more than one credit card with a balance, well duh...why not open a new one and just move the balance.

Applied bank card won't reopen b/c score is too low (catch 22). I had a delinquency in Aug of 2008. Been a year w/o any new delinquencies.

I cannot imagine why my score would be so low when the only real problem is the collections which is for a hospital (with its many many surprise fees for one visit). I personally think the punishment for being late a year ago and closing credit cards is way, way to steep. I almost feel like some sinister person is laughing at me. I don't want to play this game. I just want to live my life. God forbid I should fall down the stairs, break my back, and have to be on short term disability at 60% of my income (my credit was horrible when I had a hysterectomy in '04).

One could say, "well, don't go into debt." Well, if you don't then lack of credit history makes for a low score too. Damned if you do damned if you don't. How do you win this game w/o being wealthy????

We are putting the home back on the market as home ownership is way overrated and we want to go back to renting and I'm afraid I will not be able to find something to rent b/c of the score. If people look at my payment history for the last year I would think they'd see I am a payer.

Is there a wise credit elder who can enlighten me and put me on the path to at least 700? Thank you in advance.

[DI]

NDWT-  Your credit utilization and debt ratio is two of the reasons your scores are not higher.  You mentioned you have 3 cards with all being closed, and have a balance on all 3.  You won't see an  increase in your scores until your CC debt ratio is lower.

Although the 120 days late on two of your accounts was a year ago, they are keeping your scores lower too.  Those two 120 days late alone probably keeping your score down by 100 points.  

If you have medical collection reseach HIPPA to try to get them removed after you paid them off. 

good luck

Message Edited by DI on 08-06-2009 07:51 PM

[marty56]

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@Anonymous wrote:

One could say, "well, don't go into debt." Well, if you don't then lack of credit history makes for a low score too. Damned if you do damned if you don't. How do you win this game w/o being wealthy????

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You can build a great credit history and score without having any CC debt.  Just PIF each month and you will be fine.

LOL as the former owner of CC debt, I nenver charge more than I can PIF and a $1 CC balance is just as good as 9% of a 20000 CL.

You can make a high credit score with total CL of 200 just as well as 20000.

[DI]

I agree Marty.  I pay in full each month too.  I let one card report a balance before paying it in full. 

[Anonymous]

Thanks for the responses here everyone. I appreciate your input. It confirms my suspicions about the score, but I still say that it is just wacko. I just want to live my life. I got the credit cards to come correct on the credit after the medical bills from my hysterectomy. It worked, but it plays like a game. It would seem to me that potential creditors (renters, for example) would see that ok, you have a good job and make decent money and have NO BILLS so you're liquid and have great refs. That's the way it was in the good ol' days: no bills and great refs were all you needed.

Unfortunately, you cannot live life in the United States of America without having to owe someone something (doctor bills, rent, etc). I still plan on paying off the credit cards and not getting anymore revolving credit. After all these years there really isn't any protection for those times when you have to be human (illness, job loss). I would rather not play the game. I'm so angry that I don't even want to think about it.

When I had A1 credit (as it was called back in the day) I was constantly worried and watching my credit like a hawk and now that I have a "bad" score it is still just as stressful. So, I just won't worry about it. Would rather not be a pawn in the game of finance.

When I was too busy being in love with my husband who swept me off my feet in the early 2000's and enjoying life in my apartment with no responsibilty and driving my hoopie that I bought off my sister for $300 and my sofa, my score crept up and up. So, I guess I will go on and live the life God intended me to live rather than the one Banks intended me to live and maybe I'll be able to break even and hope someone has a gut feeling about my honesty and will rent to me.

[MarineVietVet]

One could say, "well, don't go into debt." Well, if you don't then lack of credit history makes for a low score too.

You need to remember that having a CC does NOT have to equal CC debt. As has been stated if you pay in full each month then you will never have debt but can and will build a long credit history. Having said that.......it took me many years of struggle and dumb decisions to come to that conclusion. It can be a long road but I'm living proof that it CAN be done.

7/09 (myfico)
TU-742
EQ-779

CC debt free as of 8/09 

Time can heal all wounds and a low FICO.
"Hello my name is Sandy and I'm a recovering crediholic".

[Anonymous]

Thanks for your input. Isn't it ironic how it takes YEARS to clean up the mess but only a moment to make it?

And if you have a balance on your credit card and have an accident or illness before you pay that balance in full then what? You pay for being human. What protects you from catastrophy? When you're sitting at your desk minding you own business and your supervisor calls you into a conference room and tells you that today is your last day, what do you do?

My husband and I once had an income of nearly $100K and though we didn't have much debt, after getting out of intensive care after a hematoma nearly strangled him after surgery he lost his job b/c he couldn't return to work  and we were left to live off my $24,000 a year salary. I wouldn't be so upset about this if I just decided I would rather not pay my credit cards. I am angry b/c life happened to us and we still get screwed the same as the people who just didn't care to pay their bills.

[DI]

And if you have a balance on your credit card and have an accident or illness before you pay that balance in full then what? You pay for being human. What protects you from catastrophy? When you're sitting at your desk minding you own business and your supervisor calls you into a conference room and tells you that today is your last day, what do you do?

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NDWT- Credit card companies knows that.  And that is why they offer credit card protection plans for job loss and illness.

Message Edited by DI on 08-06-2009 09:54 PM

[Anonymous]

CC protection is relatively new. It has only gained wide popularity now b/c of the massive layoffs. Automobile dealers were not even offering this type of incentive until, what 2008 or 2009 with the slew of massive layoffs across the country. I only recently saw an ad from Sears (just a couple weeks ago) where they offered this type of incentive.

5-10 years ago this was not popular if offered at all.

[DI]

CC protection had been around for at least 10 years.  Protection for car loans may be relatively new.