Question about Credit

Discussion in 'Financial Aid' started by Dr. Will, Jul 28, 2002.

  1. Dr. Will

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    I realize as my financial aid is being processed that I'm gonna have a credit check. I'm not entirely sure what my rating is so I'm wondering how certain ratings can affect the amount of money you recieve. Will you just be rejected or will you get a lower amount? Any thoughts?
     
  2. mpp

    mpp SDN Moderator
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    Unless you have foreclosures, bankruptcies, or sever delinquincies on your credit report, you will be eligible for the maximum amount of Stafford loans that the school is willing to provide you. This will depend soley on your EFC. If you EFC is $10,000 or less, you more than likely will qualify for $8,500 in subsidized and $30,000 in unsubsidized loans.

    Private loans are another matter. Depending on your age and credit history, and other available credit, they may deny you entirely without a cosigner. Typically the cosigner can be removed from the loan after making a certain number of on-time payments.
     
  3. Amma

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    I wonder if you guys know about this???
    I got my credit report yesterday and it has 2 '99999' things on it, which is bad i guess. However, I dont understand what they are? what am I supposed to do? they come to a total of 120$, could this hurt me?
    I am really feeling confused about this.
     
  4. mpp

    mpp SDN Moderator
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    I don't know what '99999' things are. Usually your credit report will begin with all 'adverse' findings. They will list with whom the account is held, the account number, the amount owed, the maximum amount owed, and the number of delinquent payments.

    If there is an adverse finding which you think is incorrect, start by contacting the people from which this account was opened. If they cannot help you, check with the specific credit bureau that has the misinformation. Check with all three credit agencies (Experian, Trans Union, and Equifax) and compare to see if you can get more information. If you have been denied credit, you are eligible to receive a free credit report. Other states have provisions for getting free or reduced fee credit reports at least once each year.
     
  5. Cobragirl

    Cobragirl Hoohaa helper ;)
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    Unfortunately the 999999's don't bode well for you...even if you only owe $120. Credit ratings have "codes" for payment that run from 1-9, with 1 being the best. Having 1's means that you pay at least your minimum payment, on-time, every due-date and have never been more than 30 days past-due. Other numbers, such as 5, mean you're in sort of a credit limbo...it means someone has given you credit but you're not having to make payments yet (like deferred student loans or when you get a retail credit card with "no payments for 6 months"). A credit rating of 7 usually indicates that you are working with creditors to relieve your debt, but that you have been seriously delinquent in the past (60+days). 9's mean that you went 90-120 days past due and the account is now in "collections" (they've probably sent it to a lawyer).

    The problem with having 9's (and I know this from experience) is that it DOES NOT MATTER HOW LITTLE YOU OWE!!!!!! Creditors looking to extend you new credit don't care if you owed $120 or $120,000 (that's a little exagerated, but pretty much true)...all they see is that you are a credit risk and more than likely, will turn you down, even if you've paid the debt.

    Here's what you have to do...you HAVE to take a pro-active approach to repairing your credit. It takes time, effort & patience, but it CAN be done...and you don't need to call any of the "credit repair" places to do it. What you DO have to do is contact the creditor that has given you the bad credit ratings and find out 1) how much you owe (sometimes the credit reports don't have the correct amount) 2) see if they are willing to "settle" with you for a lower amount (they may take less than the $120 just to get the account closed) 3) See if they will change your credit rating to at least a 5 or 7 (many won't but it's worth a try!) 4) Pay them & then have them send you a letter (on letterhead!) stating that the account is paid in full and closed out.

    Then, when you apply for credit the next time (and likely get denied), contact the NEW creditor and ask to speak to a supervisor. Tell the supervisor the situation (you ONLY owed $120, and it's paid in full now) and fax a copy of the letter to him/her. This is how I began to rebuild my life 10 years ago (after getting shafted over $150 hospital bill that I NEVER received an invoice for...) and I now have PERFECT credit. I have platinum cards that have offered me $100K credit lines. This is partially because I'm in med school of course...but med school or not, they wouldn't offer that if I didn't have great credit.

    Another way to help speed the process along is to get a "secured" credit card (if you don't already have credit cards in your name). You give the creditor a "deposit" in the amount of credit that you desire (so really, you're just spending your own money). If you make your payments on time, after 6 months to a year, they'll extend you a little credit beyond your deposit. If you keep this up, after a couple of years you'll have a decent credit rating and should be able to get a non-secured card through a "better" lender. Secured cards usually have outrageous interest rates...they are credit BUILDERS...do NOT use them to actually keep outstanding balances on them!!! In other words, buy yourself a magazine or something cheap about once a month just to keep the account active but don't buy anything that you can't pay off immediately!

    Hope this helps!
     
  6. TulaneKid24

    TulaneKid24 Senior Member
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    Just a correction here. You can have a bankruptcy, forclosures, etc. and still qualify for MAX stafford loans. There are NO credit checks done for Federal student loans. The only requirement for getting a federal student loan is "No defaults on previous student loans." Bbad credit doesn't matter for Federal loans. So, in theory, one can file bankruptcy and reaffirm (or have the student loans not included in the Bankruptcy) and still be just fine.


    Very correct about the private loans. They are very market based and have almost the same requirements as a car loan, so to speak. Good credit is a must for private loans.
     
  7. CRAZYTERP

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    To my knowledge I have pretty good credit. I mean I do not pay the minumum ever or put ionterest on my expenditures. I have and still do pay the entire balance in full and may have been late on payment once or twice. Anyhow, I have cancelled a few random credit cards (ie best buy) and only have one major mastercard left. I did this bc all the financial aid officers told me I would receive better a credit report this way. I want to know if I can still hold onto one other card like a banana republic. Mostly bc I still want to be able to shop there and get some discounts. If I do hold onto this one card is it going to profoundly effect my credit and keep me from getting the most money I can at lower interest. Does anyone know, or should I cut up the BR card?
     

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