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Buy Here Pay Here used car lots prey on people with bad credit. You have high odds of buying an auction car with a rolled back odometer and damage history. They rely on the fact that most of those customers won't spend the $39.99 on a CarFax report because they don't have a credit card or can't spare the $40.00. They overcharge for the car and nail the buyer with outrageous 20+% interest rates. About 1 in 4 buyers default. There's usually a hidden GPS tracker on the car and often a remote control ignition disabler. The car is repossessed, cleaned up, and sold to the next sucker. They then sue the person who defaulted and garnish their wages.
Are you saying that once this cell phone bill is paid off, it takes 7 years to be removed completely off my credit?
It should be paid off by march or so of next year
Yes, it will take 7 years to be completely removed. However, once it is paid-in-full and ages for two years, the impact to your score will be less.
The lesson here is...don't allow people to take on obligations in your name. If things go south, the person stuck with the consequences is you. Decide right now to never make this mistake again.
I agree about the medical collections. Even though you were a legal adult when the account went to collections, you were not a legal adult at the time you received the service and thus you were not the person legally responsible for the bill. Someone else's bill should not be on your credit report. Dispute this with the credit bureaus (all 3...Equifax, Experian, and TransUnion).
I am not a financial guru, but I would recommend that BEFORE YOU PAY the debts, look on your credit report and find out who is reporting the debt (its either the collection agency and or the original creditor.)
If its only the OC, you should then ask them for a removal after you pay. It is not guaranteed that they will do so, but its worth a try.
If both the OC and CA are reporting, you should ask the OC for a recall of the debt from the CA and also request that the CA's trade line be removed. If the balance from the OC on your debt is $0, this means that they have sold the debt and can no longer legally accept any payment. You would have to deal only with the new owner (junk debt buyer or JDB).
If only the CA is reporting, I would simply send in a PFD letter (pay for delete). If they decline then I would go to the OC (if not yet sold) and pay through them.
Basically once the debt is completely removed, you will see a jump in score, instead of letting it sit for 7 years.
I agree about the medical collections. Even though you were a legal adult when the account went to collections, you were not a legal adult at the time you received the service and thus you were not the person legally responsible for the bill. Someone else's bill should not be on your credit report. Dispute this with the credit bureaus (all 3...Equifax, Experian, and TransUnion).
This is an extremely good point. If you can get the medical collection off your credit report because you were a minor when it happened, a single cell phone glitch isn't going to kill you.
The medical bill that was incurred while you were a minor is not an item you are legally responsible for and should not be on your credit reports. Unless you accepted full responsibility for that debt after you turned 18, it has to be removed.
See what you can do about getting the medical collection deleted (especially because you were under 18 at the time of the accident). You mentioned that you're working-if you can afford it-see if you can get a PFD (pay for delete) if you can pay the cell phone collection off immediately. If the collection agency agrees, get it in writing!
Get that taken care of and then you can establish a relationship with a credit union and try for a secured (or a low limit unsecured card if they'll approve you). Otherwise, Capital One tends to give people a chance with an initial credit line of $300 It's not much but it's a place to start.
Try not to buy a new (or used) car until you can put at least a few thousand down. With a good downpayment, banks are more willing to lend. But when you do the car buying process, be VERY careful that you don't get suckered with terrible loan terms and a high interest rate. I STRONGLY recommend that you bring another person with you when you go car shopping! If you can get those two collections removed, some car manufacturers have a first time buyer program with good interest rates that you may qualify for.
Bottom line-do your research and start somewhere with credit. If you are unable to take advantage of a first time buyer program and have to buy a used vehicle with a higher interest rate, put as much down as you can and make EVERY single payment on time (don't be even a day late)! After a year of on time payments, you should have a good auto-enhanced credit score and your next vehicle will come with much better loan terms. At that point, you can either re-finance your current loan or trade for another vehicle. My credit isn't all that good but I pay my cars ON TIME EVERY TIME and I can get good terms since I have a long history of doing so.
You are the second person who has posted in these forums this week about getting denied for a secured card. Could be just a coincidence, but I have to wonder if they have tightened the approval rules, and now are denying more people. The other person who posted also very little credit with no good items.
And yes, once the item is paid off, it stays on the report as a previously delinquent, but now paid/closed, for the next 7 years before dropping off completely.
True, but the impact on your credit report diminishes over time.
I'm 21 years old and I just recently found out I have really bad credit. I found this out because I'm trying to finance a used car with no luck because of my bad credit. I'm a student and I work so having a car is pretty important right now.
I had an accident when I was 16 and had several expensive medical bills and apparently one of them was never paid so it went into collections after I had turned 18.
When I was 18 I (stupidly) had a boyfriends phone in my name who racked up a lot of expenses and never paid the bill. This is on my credit report. I was able to set up a payment plan and I'm currently paying on it.
So I go to my bank to speak with them about my options for rebuilding my credit. Obviously I won't be approved for a regular credit card, so they offered the option for their secured card that I will put a deposit down and will be my credit limit. They told me it's very easy to get and people generally don't get denied. Well I got denied and the letter said because of my bad credit history.
So idk what to do. I'm used to paying cash for my things and have never had any type of credit. I don't have a car right now and can't really afford to pay cash (for a nice one at least) so I thought financing one was going to work out for me because I can easily afford the payments.
How are other people able to finance a car? Brand new ones at that?
My dad is deceased and my mom has very bad credit too so she can't co-sign for me.
I know people with worse credit are able to get credit cards, car loans, etc. My cousin had a lot of student debt and a couple unpaid bills and was able to finance a new car.
How am I meant to help rebuild my credit and prove myself if I'm getting denied for everything?
Sorry this is happening to you.
Let this be several lessons to you:
1} NEVER and I mean NEVER put "something" in YOUR name for someone else!
2} NEVER, and I mean NEVER co-sign for someone else {not even a boyfriend you "intend to marry"}. You, as the co-signer, are guaranteeing the loan and will have to pay if they don't!
Even if it is- say for a car- and you don't possess the car,they do and you will still have to pay.
3} GUARD your credit history with your LIFE!
4} Even if you can't pay a bill you do owe-like your medical bill-....offer to pay SOMETHING..even a $10/m payment shows you are not ignoring the obligation, even if you cannot afford to pay it all.
5} GET health insurance NOW if you are not covered on a parents insurance, if low income you will get a subsidy form the government.
6} PAY ALL YOUR credit bills BEFORE THE DUE DATE! Make SURE you do!
7} ONLY charge what you can pay off at the end of the month
8} NEVER go over the limit..they MAY approve the purchase, BUT you will pay an over-limit fee and then have to pay down more to be sure any interest {if any} doesn't put you back over the limit again!
9} DID I say GUARD your credit history with your LIFE?
10} Bad reports stay for about 7 years, and until they 'fall off' you will be dinged with bad scores. ONLY TIME will heal credit/establish credit history.
This {bad credit} can ALSO cause problems in: getting a phone, renting an apartment, getting utilities turned on and the like. Bad credit can also mean you will pay HIGHER RATES for some things than others with good credit.
SO GUARD your credit history with your life!
BEst of luck to you. Try a Credit Union {local decisions are made and you may be able to state your case to the credit review board} and see if they will give you a secured card.
Im going to disagree with most here and say that a crazy high interest rate car loan to get you started is not that bad. Just be very aware of what you are spending and try to at least double your minimum payment so you are knocking down the principle in a decent time.
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