Financial expert Sherri Goss gives you answers to your questions.
Q: I bought a computer from a company that said they would help me repair my credit, and I just paid if off. Then, I went to a car dealership because I need to replace my car. They pulled my credit, and all those payments I made to the computer company didn't show up on my credit report. How is that possible?
A: Unfortunately, sometimes companies use "credit repair" as a way to get business, and are more interested in selling something than helping you actually improve your credit. Please call them and ask them to send your account information to all three credit bureaus. Also, you may want to talk to your bank or credit union about the car loan before you go to a car lot. Their terms may be better, plus you can find out how much you qualify to borrow, and know what your monthly payment will be before you start shopping. If you get to the lot and they offer you 0% interest, you can still use their financing.
Q: I filed Chapter 13 five years ago, and finished paying it off six months ago. I do not have any credit cards, but I do have a car loan and the rate is really high. I am current on all of my bills. How do I go about re-building my credit?
A: The Chapter 13 will be on your credit report for seven years, but the fact that it is now paid off, or discharged, should help. Plus, you are making all of your other payments on time. The first thing I would suggest is that you go to your bank or credit union and ask about re-financing your car loan to a lower rate. I believe they will want to do this, since you have finished paying off the Chapter 13. Next, ask them about a credit card with a small limit, such as $500. If they cannot do this, apply for a retail store or gas station card (small limit, easier to get). Use this card once a month and pay it off in full each month. These steps will help you re-build your credit.
I would also suggest that before you do any of this, you go to www. annualcreditreport.com and pull all three of your credit reports. Read through them and make sure they are accurate, and that the Chapter 13 is showing paid in full.
Q: How many credit reports can I get each year?
A: In Georgia, we can get two free credit reports per year. Go to www.annualcreditreport.com to access all three credit bureaus.
Q: I am 70 years old, and have three credit cards. None of them have balances, and I am thinking about closing one but have heard this could hurt my credit. I really only use one of the cards.
A: Since you are not planning on making a big purchase in the future (house) I would go ahead an close one of them. When we went through the terrible market/housing downturn, creditors started seeing a correlation between closed accounts and other financial problems. Basically, if you close a lot of accounts they are assuming you may have lost your job, etc. This is why closing accounts can impact your credit score. I'm glad your cards are paid off in full, and don't see any reason you need more than two cards.
Q: Where can I go to get my credit score?
A: Until recently, you had to pay for your score. Now, you can go to www.myfico.com (FICO is the most popular credit scoring system) and sign up for a ten-day free trial. You will have to enter a credit card number so I suggest you sign up, pull your score, then cancel immediately. I don't see any value in subscribing to their service.