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Impact of Unpaid Debt on Credit Score
Posted on 2/8/11 at 9:32 pm
Posted on 2/8/11 at 9:32 pm
So I'm going to put an offer in on a house. When I checked my credit score in August, it's 780. When the loan officer checked this week, it was 650. As it turns out, there was a $150 unpaid debt from an apt. that I had co-signed on a year ago. This was the first I had heard of it.
Is it possible for someone who makes good money, carries no debt, has ample savings and always pays their bills on time to get shite on so mightily by a credit score?
Why on earth would a bank look at years and years of evidence of all bills being paid in full and on time and decide that a $150 unpaid debt makes me a high-risk borrower? It defies logic.
Is it possible for someone who makes good money, carries no debt, has ample savings and always pays their bills on time to get shite on so mightily by a credit score?
Why on earth would a bank look at years and years of evidence of all bills being paid in full and on time and decide that a $150 unpaid debt makes me a high-risk borrower? It defies logic.
4
Posted on 2/8/11 at 9:39 pm to The_Pistol
The Fico system sucks.
These have zero effect on your credit score.
Also, go ahead take a bite of a shite sandwich and pay the $150.
quote:
Is it possible for someone who makes good money, carries no debt, has ample savings and always pays their bills on time to get shite on so mightily by a credit score
These have zero effect on your credit score.
Also, go ahead take a bite of a shite sandwich and pay the $150.
Posted on 2/8/11 at 9:54 pm to Cash
quote:
Also, go ahead take a bite of a shite sandwich and pay the $150.
I did. I don't have the time to dispute it. Now I'm at the mercy of the collection agency to remove it from the report. Otherwise, it could cost me 0.5%.
Posted on 2/8/11 at 9:59 pm to The_Pistol
quote:
I don't have the time to dispute it.
If you co-signed you probably don't have grounds to dispute it. Unless the entire bill is bogus.
Posted on 2/8/11 at 10:01 pm to Cash
quote:
Unless the entire bill is bogus.
It is. I made sure to leave that apartment in immaculate shape. They said the charge was for trash removal. There was no trash, but it's the kind of situation where the consumer's argument is futile.
Posted on 2/8/11 at 10:03 pm to The_Pistol
quote:
there was a $150 unpaid debt from an apt. that I had co-signed on
And this is why if you cosign on a loan (bad idea) make sure you can check on whether it is getting paid on time. Website login info is a minimum IMHO.
Posted on 2/8/11 at 10:08 pm to foshizzle
Yeah. Lesson learned. Also, when you leave an apt, make sure you have the apt manager inspect the place and sign off on it. Otherwise, they can basically charge you whatever they want.
Posted on 2/8/11 at 10:14 pm to The_Pistol
quote:
Also, when you leave an apt, make sure you have the apt manager inspect the place and sign off on it. Otherwise, they can basically charge you whatever they want.
Yep. They have you by the balls on this.
Posted on 2/8/11 at 10:31 pm to Cash
quote:
They have you by the balls on this.
As a consumer, this is basically always the case.
Cell phones, cable companies, utilities, apartment complexes, credit card companies, banks. The only way to successfully dispute a charge is to stiff them, thus hurting your credit. Unless the merchant has a legitimate threat of losing your valued business to a competitor, they have you by the balls...and even then, sometimes they don't care because you only make up 0.00000001% of their revenue stream.
This world can be so fricking infuriating sometimes. I really want my $150 back.
/end of rant.
Posted on 2/9/11 at 11:28 am to The_Pistol
As a public service announcement you should tell us all what apt complex it is.
Posted on 2/9/11 at 11:42 am to The_Pistol
quote:
Cell phones, cable companies, utilities
Don't give them your social security number.
That is one way to limit what can get put on your credit report.
And for those that will say that's impossible....it's not impossible. With cell phones, you can get a pre-paid phone and not have to give them your SSN. Also, I think with the Wal-Mart family mobile plan (different than their pre-paid plan) you don't have to give a SSN.
Cable companies will ask for it, and even probably push you to give it to them, but I successfully got cable with multiple companies in multiple states without having to give my SSN.
And the same thing goes with utility companies. In fact, I think (though am not 100%) that public utilities cannot require a SSN in order to provide service. I have all my utilities and never gave any of them my SSN.
quote:
apartment complexes, credit card companies, banks
They are going to typically require it, although I'd bet with an apartment complex that you could bypass the SSN restriction by putting up a large enough deposit.
Posted on 2/9/11 at 11:50 am to The_Pistol
So why didnt you pay the 150?
Did your roommate get the bill? Someone got the bill and didnt pay it. Since you co-signed it hits your credit.
The debt is 1 year old so it will have a pretty big impact on your score. However in a home loan your fico score is only a small piece of the puzzle.
You should have the debt validated and contact your old landlord to find out what is going on.
Offer a pay for delete on the bill. DO NOT PAY IT without something in writing for a pay for delete.
Did your roommate get the bill? Someone got the bill and didnt pay it. Since you co-signed it hits your credit.
The debt is 1 year old so it will have a pretty big impact on your score. However in a home loan your fico score is only a small piece of the puzzle.
You should have the debt validated and contact your old landlord to find out what is going on.
Offer a pay for delete on the bill. DO NOT PAY IT without something in writing for a pay for delete.
Posted on 2/9/11 at 1:00 pm to Catman88
quote:
DO NOT PAY IT without something in writing for a pay for delete.
I asked for it in writing. The collection agency said, "That's not possible. We don't do that." I'm completely at their mercy when it comes to that.
This wasn't my apartment. I was just the co-signer. The primary acct-holder swears that a bill was never received, and they certainly never contacted me about it.
This apt. was not in Louisiana. I'd tell, but I don't want to divulge too much info about myself. Just be weary that ANY apartment can pull this kind of crap.
Posted on 2/9/11 at 1:11 pm to The_Pistol
quote:
"That's not possible. We don't do that."
And this is complete BS.. Tell them they will have to take you to court then.. Trust me they will deal. Otherwise you can ask that the debt be transfered back to the Apt Complex and you settle it with them.
Posted on 2/9/11 at 2:19 pm to Catman88
quote:
And this is complete BS.. Tell them they will have to take you to court then.
I know it's BS. They just didn't want to be bothered.
...and debt collectors wouldn't take anybody to court over $150. They just crap on your credit rating and sell the debt to an even lower-tier junk debt collector.
The debt has been paid, and I now have to wait to see if they are going to clear my credit like they promised. I've called 4 times today because they promised to send me an e-mail declaring that the debt has been paid and that it would be removed from my credit rating on the first of the month.
On the 4th call, they finally acknowledged that the wire transfer was successful and promised an e-mail by 5 o'clock. We'll see if they follow through.
I'm hounding a debt collector because they owe me something!
Posted on 2/9/11 at 2:54 pm to The_Pistol
Without anything in writing dont be suprised if they keep it on the report but only report it as a paid debt. Which BTW really makes no difference.
The only edge you had was that you owed them money. They are only required to report the debt as paid. The collection on your bureau can stay there for 7 years now.
The only edge you had was that you owed them money. They are only required to report the debt as paid. The collection on your bureau can stay there for 7 years now.
Posted on 2/9/11 at 3:36 pm to Catman88
Well, I guess I'm screwed again. No worries. I got my home loan at the interest rate I wanted b/c apparently, an FHA loan doesn't care that my score is a 650 vs. 780. Aint that grand?
Posted on 2/9/11 at 3:37 pm to The_Pistol
quote:
The_Pistol
Good news is, you get screwed for the next 7 years.
Posted on 2/9/11 at 3:40 pm to Catman88
quote:
Which BTW really makes no difference.
So even if I've paid it, it won't help out my score anyway?
If that's the case, Catman, do you know of any way to remove that blemish off of my credit report now that I've paid it? I'd rather not let it fester for 7 years. It's not hurting me now, but who knows what may happen in 7 years?
Posted on 2/9/11 at 3:56 pm to The_Pistol
Well since you paid it you did make it current.. I wouldnt have touched it until the loan was finalized. You could actually lose a few points because the collection date went from being 1 year old to being more recent since the new activity was reported.
Its sucks but its the way it works. Could have been worse people get in your situation and have a 3 year old debt that they choose to settle and make payments on it bringing a debt that went past SOL for Louisiana current.
In many cases paying off a collection can hurt you more than helping you. The LO will like seeing that balance at 0 however a 1 year old collection that is not paid looks better to the computer than a 2 week old collection that is paid.
Thats why I said dont pay it without a pay for delete. If they dont delete it hurts you. If they choose to delete then you are in the clear but that a big risk without something in writing. If it were me I would have let the debt ride get my FHA loan and then look into it. Unless they offered me a Pay for Delete.
Its sucks but its the way it works. Could have been worse people get in your situation and have a 3 year old debt that they choose to settle and make payments on it bringing a debt that went past SOL for Louisiana current.
In many cases paying off a collection can hurt you more than helping you. The LO will like seeing that balance at 0 however a 1 year old collection that is not paid looks better to the computer than a 2 week old collection that is paid.
Thats why I said dont pay it without a pay for delete. If they dont delete it hurts you. If they choose to delete then you are in the clear but that a big risk without something in writing. If it were me I would have let the debt ride get my FHA loan and then look into it. Unless they offered me a Pay for Delete.
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