Suggestion for fixing credit history

[jsk]

Hi
Wish you all a very happy new year.
I am posting this on behalf of friend. He was using sprint and was charged more than what he was told for international roaming. So my friend called up and told the sprint about this. Apparently sprint didn't agree and transfered the case to the collection agency. My friend wasn't aware of this, until he started getting the calls. The amount wasn't too much to pay but didn't want this to reflect in his credit history. now 61/2 years later it still remains in his credit history and when he is looking for buying a house, the rates are high. Any suggestions about to how to have this fixed? my friend is suffering for no mistake of his.

Thanks in advance
J

[maat55]

Your friend should have proved he was right and demanded the charges removed or paid the charges. His mistake was choosing neither.

I'm not an expert but I think these type of reports leave your report at 7 years. Unless he can have sprint accept that they were wrong and they remove it, the report will run it's course. IMO.

[jsk]

my friend was still talking to sprint to remove the charges, but they had gone ahead and placed it in the credit history. That him concerned, if he pays off, its like he missed out a payment.. years laters it is hurting him.

[maat55]

my friend was still talking to sprint to remove the charges, but they had gone ahead and placed it in the credit history. That him concerned, if he pays off, its like he missed out a payment.. years laters it is hurting him.

His report looks worse because he did not pay it as apposed to it being a late pay. Paying now would look better than nonpayment but would stay longer on his record.

I would not expect that sprint will conceed, he can either pay it or let it die naturally from his report. Surely someone will come behind with more info.

[jsk]

Thanks matt

[Superhuge]

Actually a paid collection makes no difference versus an unpaid collection. In FICO scoring, a collection account is a collection account.

What would save him would be a PFD - Pay for Delete. Basically it's an agreement between debtor and the owner of the debt to remove the credit history entry in exchange for a PIF - Pay in Full on the account. The alternative would be just to wait until it drops off @ 7 years.

I would suggest seeking a board specializing in credit advice.

[maat55]

I would take this question to this site:

Credit Card Statistics

[maat55]

Actually a paid collection makes no difference versus an unpaid collection. In FICO scoring, a collection account is a collection account.

What would save him would be a PFD - Pay for Delete. Basically it's an agreement between debtor and the owner of the debt to remove the credit history entry in exchange for a PIF - Pay in Full on the account. The alternative would be just to wait until it drops off @ 7 years.

I would suggest seeking a board specializing in credit advice.

I'm not sure if the credit score would change, but I've heard that how you are viewed by a new lender will be viewed more favorable. ( May vary depending on the lender)

[jIM_Ohio]

Things like this piss me off. But this is also a reason to NOT have contracts.

The big companies have lawyers which will screw you if they need to get some money from you. You have little recourse but to pay.

Always resolve all bills when they come- do not ignore them.
I ignored a speeding ticket I received in 1994 when I was young, stupid and in college. In 2004 it found me one state away (a warrant for my arrest had been issued in another state).

Same for cell plans- they can trap you into fees you may not be able to afford to pay... so avoid contracts if at all possible.

[Alex_Adviser]

Steps that could help you to enhance his credit score are:
1. Talk to Your Bank
If you have a checking or savings account, make an appointment with the bank loan officer. Explain that you are interested in rebuilding your credit, and ask what options the bank might provide. Quite often one option is a secured credit card. With a secure credit card you supply a deposit, usually as little as $300 and are in return given a credit line equal to the amount of the deposit. The benefit of applying for a secure card through your bank, rather than through many of the national companies offering the same, is that a bank where a client already has an account established will often waive application and annual fees.

Once obtaining a secure credit card, use it solely for purchases you would otherwise make, such as gas, and pay it off at the end of the month. After six months to a year of good on-time payment history the bank will usually increase your spending limits and get you on the way to establishing non-secure credit.

2. Run Your Own Credit Check
Take a look at your credit file and make a list of the companies you owe. Contact information for the companies should be listed on the credit report. In the case of a past due balance, attempt to contact the company and reach a settlement. Usually, if the account has been in collections for a while, they will settle for a small percentage of the original amount. It won't remove the listing from your credit file, but a paid account is better than a charged off account.

3. Second Chance Financing
There are a lot of opportunities for people with bad credit to obtain financing for an automobile, computer or some other expensive necessity. Apply for one of these accounts with the understanding that the interest rate will be less than desirable if approved. Unfortunately, credit repair isn't completely free. Take out financing on an item you can afford and make the payments on time. If it is in your budget, make double payments or pay the item off early to avoid additional fees from high interest rates.

4. Talk to Your Landlord
If you rent property, your landlord may be able to report on-time rent payments to your creditors. Usually there is a fee, somewhere around $25 associated with reporting information to a credit bureau, but if you explain that you're trying to rebuild your credit worthiness and offer to pay the fee, a good landlord should entertain the idea.

The path to credit recovery is long and arduous but well worth it. The day you're able to finance items without paying the penalty for youthful mistakes, is the day you'll be on your way to building a solid financial future.

All the best.............

[poundwise]

...was charged more than what he was told...

I don't doubt that he may have been misled by a rep in a Sprint store, or something similar, however, what you were told doesn't matter. What the rates are can be found in print. If you read your contract and check the rates before signing up or before making calls such as international roaming calls, then you can avoid issues like this.

It sounds to me like your friend didn't really check it out and then was shocked at the rate. If he was mis-charged, he could have pointed to the rate chart or list for his type of account and had it corrected. If he was mis-informed, either by being mis-led verbally and/or by failing to properly investigate the matter beforehand, then he should have just paid the bill and chalked it up to a lesson learned.

In any case, letting a matter go for years is never a good way to handle things.

Also, it is highly doubtful this one collection on his report is solely responsible for making his score low and his mortgage rates high. Your friend needs to take a honest look at his report and accept that perhaps he has not handled his business in the best fashion over the years, meaning his rates may be higher until time, and good practices, change that. (Most of us have made mistakes. When it comes to you credit report/score, you can't just undo them by wishing it wasn't so.)

[poundwise]

...avoid contracts if at all possible.

Ditto. I especially warn people about signing up for 2 year deals in order to a get a phone at a low price. Pay for the phone outright and have no contract or, at least, use the middle ground and pay a reduced price for the phone with a 1 year contract.

Of course you can, but don't have to, go with a prepaid phone to avoid a contract. My wife uses a prepaid but I use a regular account. When I bought my phone, it could be had for $29 on a two year contract, $89 on a one year contract, or $149 with no contract. I opted for the one year deal.

Contracts are also why I am with cable instead of satellite. DirectTV and Dish Network want two year sign-ups. Though you can get either without such an arrangement, it will cost you. With my cable company, I can change service, quit, etc. anytime I want. They did want me to sign up for two years to 'lock in' my rate, but I declined.

Though there are some situations where a contract, even longer ones, may be advantageous, I tend to avoid them, preferring the freedom to change and/or cancel services without any contract issues.

[jsk]

Thank you all for the suggestions. My friend is up-to-date on all bills and his credit card payments. Out of principle, he was arguing with the cellphone provider. It was not his intention not to pay. Once it got into history, he was scared of paying it and having a entry in the history. (When he looks back , he agrees it is not a good idea) As Matt suggested, will look into credit card statistics link.

[poundwise]

Thank you all for the suggestions. My friend is up-to-date on all bills and his credit card payments. Out of principle, he was arguing with the cellphone provider. It was not his intention not to pay. Once it got into history, he was scared of paying it and having a entry in the history. (When he looks back , he agrees it is not a good idea) As Matt suggested, will look into credit card statistics link.

I absolutely understand the 'principle' factor, however, if you are going to stand on principle, you have to understand that it may bite you in some areas, like your credit report. It would have been better to have paid the bill and then fought the issue on principle. You may be in the right, but you're 'playing' on their field, so you have to know the rules and the potential consequences.

I hope everything works out for your friend. Dealing with the credit bureaus and/or with collectors can be a real pain. Hopefully, he'll get a mortgage that works for him and can move on. Eventually, he can clean up the credit history as he takes care of business over time.

[jsk]

Thank you poundwise. That's a good idea to keep in mind. First pay and then work it out if it is taking time..