OK, makes sense. But why unsecured? And would it do as to lower my score if it were not being used as it would if it were being used?
And yes, you’re right, I guess I don’t have much credit hx. I’ve never made payments on anything. The car was a gift. All my other cars were paid for in cash.
I do have some outstanding bills, utility bills, on the report…<$200.
Pulykamell,
Thanks for that–that’s the way to go. I guess then, the student loans would be the thing to pay more aggressively on—and steadily pay off the $2000 judgement.
It is really encouraging to hear how you did it. How did you keep track of the fluctuations in your score? Do you have credit monitering?
Pulykamell,
I reckon then that the thing to do is to start paying, agressively, the student loan I have which is accruing interest, and pay steadily the $2000 judgement. Hell, I could pay them using my “crappy” credit card, as long as I pay it off responsibly each month.
Thanks for explaining how it went for you.
How did you keep track of the fluctuations in your score? Do you have credit monitering?
Oops, that post was not showing and I thought it got lost.
Simply having credit available builds your credit score. There are different kinds of credit, and while they’re not usually spelled out on your credit report, they’re used to calculate your score. It sounds like you have no revolving credit. You’re not taking any risks, so lenders have no way of gauging how well you handle risk (which is sort of backwards because not having a credit card at all seems pretty darn responsible to me, but whatever).
By getting an unsecured credit card and not using it, you establish a history of risky credit, and a pattern of being responsible with that credit. You could actually build your credit faster by using it and paying it off each month, but I agree with Sateryn76 that it’s far too easy to dig yourself into a hole. You should know that part of your score is based on how old your credit is. For example, if your oldest credit card was opened ten years ago and you never use it, and you have another credit card that was opened six months ago that you use and pay off all the time, your credit score will go down significantly if you close that ten-year-old credit card.
I used MyFico.com. I can’t remember what the offer was at the time, but there was a one-time fee for the credit scores, and then there was some introductory offer with some sort of credit monitoring. I only used the monitoring itself for about 3 months, then cancelled it (because I didn’t want to have another monthly payment I forgot about.) Then, every six months to a year, I’d just pay the one-off fee to see where I was at.
I personally would not recommend subscribing to the service, but rather just checking in every so often (twice a year max) just to see how things are going. When you pay for your FICO score, there’s also a handy little FICO estimator they have on there which lets you see what your projected FICO score will be after whatever period of time you want based on your payment projections. That honestly was very helpful to me. Seeing progress and that FICO number going up was nice positive reinforcement. The simulator isn’t totally accurate, but it does give you a good idea of how various factors affect your score. At the very least, I think it’s worth a one-time $20 payment.
You have an agreement with the landlord to pay monthly payments? Since they’re your creditor they are the ones who should be reporting your on time payment status to the credit bureau. The only thing that should be giving negative “points” toward your credit rating are bad income to debt ratio and late payments or defaults. In fairness, if you’re paying on time, even though it’s a judgment, the landlord should have reported that to the credit bureau and in three months, that should “fall off” of your report and you should get your points back. Sometimes you have to keep on top of it, (even paid off bills), as the creditors don’t care if they report it in a timely manner.
I don’t know if all Wells Fargo banks are like this, but “my” Wells Fargo Financial agent helped me out a lot with information about the credit bureau, points, payments and blah blah blah. With poor credit, I had a hard time rebuilding, but luckily I’d had several “good” loans with WFF and they gave me a chance. With a high debt to income ratio, I’m still struggling right now, and slowly but surely getting it paid down.
The credit bureau isn’t a US agency (like the EPA, military etc). It’s three different reporting companies (experian and.?? can’t remember the other two right now). If you apply for a loan, you have a right to get a copy of your credit report for free. IIRC, they’re not supposed to use applying for a loan against you, but you can call and ask to have those taken off of your negative points (again, IIRC, I may have forgotten the exact deal with that one, it’s been awhile). Otherwise you can try one of those companies like Freecreditreport.com (or whatever they’re called). They usually give you a free month or two.
Make SURE if you do that that you keep their contact info in an accessible place and call and cancel as soon as the free period is up though, they’re a pain in the butt, but just be firm with them and say “nope, cancel”.
Also if you have any other debts, call those creditors and try to get the interest lowered, or more of your money going toward principal etc.
Good luck!
If a judgment is owed to a landlord, my guess is that the payments are NOT being reported to credit bureaus. Unless something has changed in the last five years, you have to have at least 100 accounts before you can report monthly payments. Most landlords either can’t report or just don’t bother.
So my guess is that the judgment will sit there at full value until it gets paid off - and may only come off even then if the OP notifies the credit agencies.
As a former apartment manager, I would recommend the OP talk to the landlord and see if a lesser payment would be accepted. We had a $1200 debt at our building that was six years old. When the former tenant contacted us, they were trying to buy a house and needed to fix up their credit quick. We agreed to cancel the debt if they paid $1000 right away.
I agree with the others who recommend paying that judgment with any kind of regular debt like a credit card. Judgments look bad regardless of payment history or age.
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Who can tell me that? The credit reporting agency? Can you actually talk to a real live human being?
Yeah, I have a lot to learn.
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Is your landlord a private party who took you to court, or are you paying to a collection agency? Is that judgment the ONLY negative on your credit report?
Well, I have not started the payments yet. The landlord is a private party who took me to court. I figured, I’ll print up a spreadsheet with all the payments on it, ask him to sign each time I make a payment, and also ask him to sign an agreement that he’ll have the debt removed once it’s paid.
Hmmmm. I just got Identity Guard. The judgement isn’t even **showing up **on my credit reports on there.
Be careful with the “7%” offers you’re seeing - it’s hard for me to get that kind of interest rate and I’ve got very good credit. I’d bet there are significant fees and “gotchas”.
Crapital One is certainly an option; supposedly they’ve backed away from their predatory reporting practices. If you had, say, a 1000 dollar credit limit but never spent your balance beyond 200, they’d report it as if 200 was your limit - making it look like you were close to your limit and therefore your utilization was too high.
If that judgment was just entered, then it sounds like it’s the real killer. I like the suggestion that if you can pay it down more aggressively, you see if the landlord can remove it. He may not be able to, since it was entered by the court. You may be stuck with it, but as it ages it should have less impact.
The landlord probably won’t be reporting your payments to the credit bureaus, unfortunately. I think your best bet is to pay it as agreed, maybe (as others mentioned) see if he’ll wipe if off if you can come up with a good chunk of it. Won’t necessarily help your credit score but it’ll free up that monthly cash flow at least.
Possibly it doesn’t show up on the monitoring reports because it’s so new?
Realistically: if you can get any kind of “loan” (credit card or whatever) and use it monthly, your score will gradually increase.
Is this always true? I don’t have a credit card and currently have a credit score of 780 (my debt is mostly related to student loans, car payments & car insurance). If I got a credit card, and paid on time obviously, would my score be even higher?
Well obviously it’s not necessary to have credit to build credit, but it helps significantly. You can build credit much faster when you have credit available and use it responsibly.
Credit also builds more slowly as your number goes up. It’s more difficult to go from 780 to 800 than it is to go from 600 to 700. If you’re at 780 then you’re already considered tier 1 for most lenders.
If you begin paying the landlord, you could be resetting the statute of limitations time limit for that debt.
In some cases, that judgment would have become useless at the 7 year point, and have also dropped off your report.
The moment that account goes current again, you just reset the 7 year clock on it being on your credit report.
I’d suggest asking a local lawyer about the statute of limitations on that debt before making payments.
On edit:
Also, the whole getting a credit card thing is stupid.
Employers don’t check your score when they pull your report, they check for a pattern of irresponsibility. Having a paid-off Amex Black with a 100K line won’t help you; having a CapOne card over its limit and dozens of judgments will hurt you.
There is no good reason to get a credit card in your shoes. 99% of Americans are injured by credit cards far more than they are helped.
The ‘bad credit’ and secured cards have stupid high fees, and there’s no way they’re worth it.
I closed my account with them not to long ago and switched to a different provider for that very reason, so if it changed, it was recent. Since I paid my balances in full on a monthly basis and had a fairly static buying pattern on the card, my utilization was very high, even though it was extremely low in reality. Even with that, I only switched because my score is high enough to not be terribly impacted by closing an old account.
The last time I pulled my credit report, about a year ago, Capital One was reporting my full credit limit to all the agencies. Apparently, according to this article, they started doing that a few years ago (the article is from 2007).
That said, even though I have an account still open with them, I haven’t used their card since 2004 after I discovered their practice of purposely not reporting your credit limit to the bureau.
Unless I’m getting senile, it was not fixed in 2007, as I’m pretty sure I checked it within the last two years. Is it possible that they phased it in for new customers first, and slowly brought existing customers on board? That would definitely be more pleasant than the thought that the years are passing by that fast. 
Listen to him, he knows his stuff.
In general, if you had a debt that is 7 years old, then you are safe, it can no longer be reported and generally, you should not make payments.
But if it is a recent judgement by a landlord that is an individual, then yes, you will owe that for 7 years after the judgement (YMMV, IANAL).
When was the judgement entered against you, and how is this showing up on your credit report?
“Possibly it doesn’t show up on the monitoring reports because it’s so new?” Momma Zappa
( I don’t know how to quote a portion of a post…)
The judgement is old. It’s from 2004. Is it possible that it’s just—gone?