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A Credit.com reader recently wrote in with this question about rebuilding her credit score:

Your information has been very helpful. I just pulled my three credit reports and have scores ranging from 576 – 587. I see that I owe a cable company bill for $211. Will it really help boost my score if I settle or pay it off? And also I have two credit cards that I pay, but not always on time. One fell behind for four months, and the other one was doing good but I missed a payment last month. I need to refinance my home after a divorce, to remove my spouse’s name from the mortgage.
— Thank you, Marie

[Related article: Can You Establish a Great Credit Score… Fast?]

The cable bill sounds like a collection account since these types of accounts are not typically reported unless they are turned over to collections. If that’s the case, then paying it is unlikely to boost your credit scores. A collection account is considered negative, and that’s true whether it’s paid, settled or unpaid. However, your mortgage lender may require that bill be paid before you can get a mortgage, so it’s something you’ll want to discuss with your loan officer.

As for the recent late payments on your credit cards, you probably already know that those may be very damaging. You didn’t indicate whether the credit card that was behind for four months is being reported as four 30-day late payments or if it was 120 days late. I suspect the former, as most card companies will charge off an account when it becomes 120 days late. Recent late payments in particular have a strong impact on your credit scores. Assuming the account was 30 days late four times, it may be better than falling severely behind (typically 90+ days delinquent or more), but it’s still not good. Recent late payments in particular have a strong impact on your credit scores. The score also penalizes you more for the frequency of those late payments. For example, one recent 30-day late isn’t nearly as damaging as four recent 30-day lates.

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Marie, I am concerned about two things here. One is the fact that it may be difficult for you to refinance soon. If there is a specific time frame spelled out in your divorce decree, you may have trouble meeting that deadline. I would encourage you to talk with an experienced mortgage loan officer who works with multiple lenders to find out what programs might be available to you at this time, and what the interest rate might be. If you do not qualify now to refinance, ask the loan officer for guidance on what you need to do to be able to qualify.

My second concern is the fact that you are still having trouble paying your bills on time. If the problem is that you are just busy and forgetful, then that’s something that can be fixed by setting up automatic bill pay or payment alerts. But if it’s because you are juggling bills and living paycheck to paycheck, then your home may not be affordable, and you may need to look at other options. It would not be a bad idea for you to talk with a housing and credit counseling agency to see what they can recommend for getting your finances—and as a result, your credit—back on track.

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  • Paul

    I’ve maintained a mortgage on one or two houses continously for over 30 years, had one or two car payments for the large majority of that time, and had several credit cards. I haven’t had a bill more than 15 days overdue in the past five years and never had any, other than medical bills, over 90 days due. My credit card limit is three times the national average, while my percentage debt is only half the national average. I co-signed for a car loan for my 28 year old son (which he plans to pay off next month) six months ago. I refinanced my house three months ago to save $400/month. My account shows 4 total inquiry records: I’m not sure where the extra two came from. How many inquiries are you allowed in a 12 month period and why is my credit score barely above average (744)?

  • Kate

    First, I am a disabled veteran and have been without a job for more than six years. I have not been able to obtain employment or credit because of my credit report. I have an “A+” rating on debt usage, an “A rating on credit age and inquiries, but an “F” on late payments and a “C-” on account mixture. My credit score is between 621 and 660. My problem is this… I have a credit card and auto loan on my credit report that are being reported negatively because of late payments. I understand that negative information remains on your report from the date of first delinquency up to seven years (only certain other things remain for 10 years). Although, I owe nothing on either of the closed accounts, the company (Capital One), keeps changing the date of first delinquecy to reflect a later date with each individual bureau. If the date of delinquency keeps changing then, the date the information is suppose to come off will also keep changing. How can I rectify this error? I have called the company to give them a chance to report it correctly, but was told that the information may remain for up to 10 years. What can I do to protect my credit report from having this negative information remain longer than it should and have the company report the same information to all credit bureaus? I would also like to ask if companies are required to report to all credit bureaus so that the credit score will be accurate? I was told that not all companys use all three major credit bureaus. If this is true then, how can a consumer get an accurate score if all companies are not reporting to all three major bureaus? I have similar scores with two of the three, but at least a 40 to 50 point difference with the forth. I have also noticed that the information on two of the three is more current than the last one. If the score is to be truly accurate, then all companys should be reporting to all three and not just the ones they prefer. Am I correct to assume this?

    • Gerri Detweiler

      Kate –

      Here are my thoughts on your questions:

      Although, I owe nothing on either of the closed accounts, the company (Capital One), keeps changing the date of first delinquecy to reflect a later date with each individual bureau.

      I am not sure I understand what is going on here but creditors generally can’t change dates just so information can be reported for a longer period of time. That may be illegal. I would suggest you file a complaint with the Consumer Financial Protection Bureau to start. Be as specific as possible.

      I have called the company to give them a chance to report it correctly, but was told that the information may remain for up to 10 years.

      Not true. Unless it is an unpaid tax lien or judgment, Ch 7 bankruptcy it must be removed after seven years. Someone is giving you incorrect information.

      I would also like to ask if companies are required to report to all credit bureaus so that the credit score will be accurate?

      Unfortunately, they are not required to report to any agencies. Credit reporting is voluntary.

  • Janessa

    I am have only had my main credit card for 16 months, so I’m disappointed to see that I have a D for my credit age. I also didn’t know that credit inquiries would make my score go down, I have a D in that category as well. I have flawless payment history and have never been in debt, so I have an A+ in both of those categories. I am not in a position to have a mortgage or loan, so I have a C- in that category. So, how can I get my credit score back up? Would it help to close a credit card that has not been used, and only open for 3 months? How can I get my C- in Credit mix up when I do not need a loan?

  • Dawn Bassett

    I have a question…I got a credit card when I was in college. It was a Phi Theta Kappa VISA Card through Bank of America with a 7.9 FIXED APR. I got the card in 2003. I never was late with payment, always paid double or triple the minimum payment.

    At one point, in 2007, they boosted my limit to like 11k. I owed a smidge more than 1/4 of that. After Hurricane Ike (about 3 years ago), they sent me a letter saying they were changing my 7.9 FIXED to a 12.99 variable. I argued for quite some time as I don’t see how that is possible when I have always been in good standing. I had just lost my job when I got this letter but was on unemployment. Apparently the hits just kept coming.

    They said I could apply for a card at 8.9 FIXED and possibly get instant approval on the phone. Again, another part that made no sense if you are changing mine due to the economy (“and all the credit companies are doing it”), but can offer me one for 1% more.

    I was irate they would not leave my current card alone, and saw no other choice but to oblige applying for this other card. Totally not thinking about the fact I was out of a job for one week at that time. Obviously when they asked me about employment with the phone application, I spoke the truth. And of course, no instant approval on the phone. Then I get a letter weeks later when I already found another job, saying I was denied. I called my cc company to find out why, and low and behold, found out they ALSO dropped my limit down to pretty much what I owed…basically looking like I maxed out my card. All because being without a job for 3 weeks makes me a “credit risk”.

    Look, I’ve been without a job before, and they always got their money. Always more than the minimum payment even then. They never knew I was without, as I had money saved up for emergencies. They wouldn’t have known the latter time had I not gotten that letter of raised APR. I didn’t even use that card once while I was unemployed the more recent time.

    My point behind all this, is because the cc company literally scre**** me, my credit score went from 790 to 733. What can I do? This was NOT my fault or negligence and now I’m paying for it. I am 33 years old and have always been very careful with my credit. Always wanted to have it well off so I would never have issues getting anything I need or want in life. I don’t want to go back to GOOD credit. I want to be on my way to EXCELLENT like I was, as I’ve EARNED it! Advice?

    • Gerri Detweiler

      Dawn – Your not the first person I’ve heard this scenario from. Once it’s happened, though, it’s hard to undo as they are entitled to lower the limit. (The interest rate changes are regulated by the Credit CARD Act so I am thinking that maybe yours changed right around the time the final provisions were going into effect. A lot of issuers changed from fixed to variable at that time.)

      Have you considered using a personal loan to pay off this debt? You’ll have a fixed monthly payment at a fixed rate and over time it may (no guarantees) help your scores since installment loan balances are treated differently. You may find this article helpful: Will Debt Consolidation Help or Hurt Your Credit?

    • Anon Please

      Dawn has run into a game credit card companies now play. If they believe you have lost a job, the hike the rates up because they know you cannot get a new card. They look for spending patterns like suddenly shopping at Walmart to guess employment status, and use your buying habit data against you. Credit ratings are not about fairness, they are about extracting as much cash as possible. I am sorry this happened to you. Welcome to the world of big data.

  • Sierra Sage

    I pulled up all three credit bureaus and it is showing the bankruptcy under most of
    the creditors and there is a balance of 0 on them, but I guess the word I am not seeing
    that bothers me is Discharge…that is what a bankruptcy is supposed to do, and the
    word Discharge means it was included in the bankruptcy and should not be reported
    any different than that. Only one of the Capital One credit cards I have now is showing and it shows everything on time currently.

    I have no problem getting Pay Day loans and paying them back because they don’t
    check my credit report. I want to get an installment loan, however, and pay Capital One
    and the Pay Day loans off, and have money for my dental work, but when I apply for
    an installment loan…I am declined. The reason they give is not bankruptcy, but they
    comment too many late payments, too many inquiries, too many accounts and such…
    In my mind, they should only be seeing Discharged accounts under Chapter 7, plus my
    Current Capital One accounts. I know that my interest rate will be higher because of the
    bankruptcy but I want to see the word Discharged on my credit report…otherwise it
    looks like it is still pending or something….my bankruptcy was granted because of the
    circumstances I had at the time…there was a valid reason for the late payments and
    not being able to keep up..

    • Gerri Detweiler

      Sierra – I understand your frustration. Your bankruptcy is supposed to help you get a fresh start financially. But it doesn’t erase accurate information from your credit reports.

      Frankly, whether or not the word “discharged” appears on your credit reports probably won’t make a difference as your credit scores are concerned. Nor will it help you get new credit faster.

      As long as your report is listing the current balances on any debts wiped out in your bankruptcy, then it’s probably accurate. (It’s hard to say without knowing all the details.) If the late payments happened before you filed then they can be reported for up to seven years as well.

      You don’t mention how long it’s been since your bankruptcy, but in most cases it takes a while to get your credit back to the point where you can get unsecured loans like the ones you are describing.

  • Sierra Sage

    I got a Chapter 7 Discharge in August of 2012 with everything I owed discharged.
    I now have 2 Capital One credit cards with payments made on time.

    My question is, why does my report not show the discharges, and shows 53 late payments and other negative information. I was told the Chapter 7 would be a “Fresh Start” I just called my attorney and they said they have no control over the credit bureaus…so was my discharge and bankruptcy a scam taking my money?? Please help
    me to understand this..

    Thanks for your help…I would like to borrow $3000 for much needed dental work
    and to pay off the 2 credit cards so I have one payment to be faithful with.

    Sierra Sage

    • Gerri Detweiler

      Sierra – What exactly is your credit report listing for these accounts? Is it listing late payments before or after the bankruptcy? Does it show a balance still outstanding on the accounts? It’s a little hard for me to picture what’s going on so if you can describe it in more detail that would help.

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  • Stacy Moore

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