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Old 12-29-2008, 07:09 PM
 
150 posts, read 926,462 times
Reputation: 124

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I currently have an excellent credit scores, and have Visa and Discover cards used just enough to keep me "active" on my credit report. Unfortunately, one of my cards was compromised. I caught the fraudulent activity and reported it immediately. The credit card company issued a replacement card.

My real concern (where the "yikes" comes in) is if it will impact my credit score? This was the older of my two credit cards, and the only thing the FICO simulator advises will boost my score is a longer credit history. So, my concern is regarding how the account will be reported to the credit bureaus. Will it show that I have had an account in good standing with Discovercard since 1998 or will it appear as a new account?

Any input would be appreciated, as we are seriously considering buying a multi-family rental property within the next few months and with a down payment of 30 percent, we would be financing the remainder, so I need to keep my credit scores high. Plus I have been really responsible and want a credit score that reflects my responsible use!

So, will it hurt my score? Thanks in advance for answers!
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Old 12-29-2008, 08:19 PM
 
406 posts, read 1,261,655 times
Reputation: 146
when you go to the bank, they will ask you about this. they can over ride this once you get a judgment in your favor or dispute the history on annualcreditreport.com (this is the ONLY site you can do this for free). then the bank will ask you for a letter from you, stating the whole incident, and everything should be peaches and cream.

this is quite common, and we actually did this because we were sent to collections because of fraud (imagine that). and our credit report was restored after we got a low interest, low down loan. keep an eye on your credit. check it as much as the site will allow.
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Old 12-29-2008, 08:24 PM
 
406 posts, read 1,261,655 times
Reputation: 146
Quote:
Originally Posted by 2006Buckeye View Post
I currently have an excellent credit scores, and have Visa and Discover cards used just enough to keep me "active" on my credit report. Unfortunately, one of my cards was compromised. I caught the fraudulent activity and reported it immediately. The credit card company issued a replacement card.

My real concern (where the "yikes" comes in) is if it will impact my credit score? This was the older of my two credit cards, and the only thing the FICO simulator advises will boost my score is a longer credit history. So, my concern is regarding how the account will be reported to the credit bureaus. Will it show that I have had an account in good standing with Discovercard since 1998 or will it appear as a new account?

Any input would be appreciated, as we are seriously considering buying a multi-family rental property within the next few months and with a down payment of 30 percent, we would be financing the remainder, so I need to keep my credit scores high. Plus I have been really responsible and want a credit score that reflects my responsible use!

So, will it hurt my score? Thanks in advance for answers!
just noticed a few more things in your post.

we also bought a multifamily. may i ask why you are putting 30% down? i would never mingle my money with investment property.

if it is for the low interest, i urge you to consider this. get the cheapest loan you can for as little down as possible. build some equity by doing something to the property, either fixing deferred maintenance, adding something functional etc. and then refi with your equity as down payment. use your 30% down money for sweat equity, it is a much better investment. get a high interest loan for a few months while you work. why use your money when you can use the bank's?

it works awesome, and if you qualify (sounds like you can) you may even be able to get an FHA for this multi family. it has been 2 years since we used this trick, but we put down 20k for a property valued at 450k, and have been making 20% on our investment since. good luck.
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Old 12-29-2008, 11:43 PM
 
Location: Plano, Texas
1,675 posts, read 6,651,953 times
Reputation: 694
What is your current credit score?
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Old 12-30-2008, 09:32 PM
 
Location: Cary, NC
1,036 posts, read 3,767,454 times
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Quote:
Originally Posted by michael11747 View Post
it works awesome, and if you qualify (sounds like you can) you may even be able to get an FHA for this multi family. it has been 2 years since we used this trick, but we put down 20k for a property valued at 450k

Great post and advice until that point. He is doing a rental property, so he can't use FHA. They are only for purcahse of primary residence.

Other than that, good advice. These days, few conforming lenders will do investments with <15% down and few MI companies will insure them. On multi-family properties some lenders ask for even more down payment.

While it makes sense for a buyer to put less, the lenders are really tough on investors right now. There are always non-conforming loans, but costs go up quite a bit for those.
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Old 12-30-2008, 09:33 PM
 
150 posts, read 926,462 times
Reputation: 124
Quote:
Originally Posted by michael11747 View Post
when you go to the bank, they will ask you about this. they can over ride this once you get a judgment in your favor or dispute the history on annualcreditreport.com (this is the ONLY site you can do this for free). then the bank will ask you for a letter from you, stating the whole incident, and everything should be peaches and cream.

this is quite common, and we actually did this because we were sent to collections because of fraud (imagine that). and our credit report was restored after we got a low interest, low down loan. keep an eye on your credit. check it as much as the site will allow.
Actually it's a credit card issued through Discovercard. I have had the account (in good standing) since 1998. My credit card number was compromised, so I notified Discover. I caught the activity the same day (noticed a pending transaction that wasn't mine for $43 - in Florida, and I haven't been to Florida in years) and I won't have any liability with Discovercard, and I won't have anything negative reported to the credit bureaus. I am not worried about the theft of the card number impacting my credit score, but rather the age of the account.

Maybe I wasn't clear enough, but my question is regarding the age of the account. I want my credit reports to reflect I have been an account holder in good standing since 1998. I don't want it to look like I have only had an account with Discovercard since December 2008, which is when I reported the card number stolen. Since age of accounts is a factor in the credit score, and this is my oldest account, I am really hoping it will still be reported as a 10-year old account.

Thank you for taking the time to answer. Sorry to hear that you were the victim of fraud, but glad you were able to take steps to remedy the situation and restore your credit. I put a fraud alert on my reports.
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Old 12-30-2008, 09:43 PM
 
150 posts, read 926,462 times
Reputation: 124
Quote:
Originally Posted by rcarrillo View Post
Great post and advice until that point. He is doing a rental property, so he can't use FHA. They are only for purcahse of primary residence.

Other than that, good advice. These days, few conforming lenders will do investments with <15% down and few MI companies will insure them. On multi-family properties some lenders ask for even more down payment.

While it makes sense for a buyer to put less, the lenders are really tough on investors right now. There are always non-conforming loans, but costs go up quite a bit for those.
Right, we would not be occupying the rental property. We're ok with 30 percent down. We are looking for a 4-unit, but it seems the best deals sell immediately/for cash/curb offers only. If the right opportunity comes along, we want to be ready, but we're not dead-set on being landlords, so we'll see what happens.

Any info on the credit score question?
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Old 12-30-2008, 09:49 PM
 
150 posts, read 926,462 times
Reputation: 124
Quote:
Originally Posted by VictorBurek View Post
What is your current credit score?
774, 781, 789. No negative items, never a late payment. Never above 10 percent DTI on CC. I don't have a lot of accounts though, which is why I am concerned about losing 10 years of history. The score simulators only advice is longer history and possibly opening another account (though this could also be a negative).
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Old 12-30-2008, 10:14 PM
 
Location: Cary, NC
1,036 posts, read 3,767,454 times
Reputation: 510
Quote:
Originally Posted by 2006Buckeye View Post
Right, we would not be occupying the rental property. We're ok with 30 percent down. We are looking for a 4-unit, but it seems the best deals sell immediately/for cash/curb offers only. If the right opportunity comes along, we want to be ready, but we're not dead-set on being landlords, so we'll see what happens.

Any info on the credit score question?

It should report that the card is lost or stolen under that account number and that it is now closed. Then there will be another notation with the new account number. Usually they will show that the account was open from the date you had the initial account.... I have seen it, so it can be done.

Whether it is automatic or only on some types of accounts, I havent looked closely enought to say. Ask Discover to see if they have any info on how they treat it. I lost me AMEX earlier this year and it showed the initial date and didnt affect my score.
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Old 12-31-2008, 03:09 AM
 
406 posts, read 1,261,655 times
Reputation: 146
Quote:
Originally Posted by rcarrillo View Post
Great post and advice until that point. He is doing a rental property, so he can't use FHA. They are only for purcahse of primary residence.

Other than that, good advice. These days, few conforming lenders will do investments with <15% down and few MI companies will insure them. On multi-family properties some lenders ask for even more down payment.

While it makes sense for a buyer to put less, the lenders are really tough on investors right now. There are always non-conforming loans, but costs go up quite a bit for those.
i have gotten an FHA for a 3 family unit in the past. used it as primary residence for 6 months, rented it out, sat on it, fixed deferred maintenance, reappraised, cashed out my equity, bought more. all i did was mow the lawn every 2 weeks, and i enjoyed it.
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