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If you have bad credit

  1. Sep 28, 2008 #1
    If you have bad credit....

    ...I put myself in an unwanted situation where I unknowingly withdrew more money than I have in my bank account, thus crossing over my credit line. How can I establish a good credit score again or at least reach a point where I have no bad credit score? Wouldn't a bad credit score prevent you from borrowing loans from a bank?
     
  2. jcsd
  3. Sep 28, 2008 #2
    Re: If you have bad credit....

    What kind of account was it?? Regular checking accounts and credit lines are two different things.
     
  4. Sep 28, 2008 #3
    Re: If you have bad credit....

    I have a checking account and a credit line account. When I know longer have money in my checking account, I would withdraw money from my credit line account. The credit line account was put their to prevent unnecessary overdraft fees. I borrow to much money and exhausted all the money within my credit line account, because I thought all the money I was withdrawing was my money.
     
  5. Sep 28, 2008 #4
    Re: If you have bad credit....

    It all depends on your relationship with the bank. If you repay the money immediately there may be no effect on your credit score.

    My son was lucky when he overdrew on his credit reserve, the bank upped his credit limit.

    By all means go to the bank and talk to them. Banks are currently tightening credit, but on the other hand they don't want to lose customers.

    And don't be shy about asking to speak to a manager.
     
  6. Sep 28, 2008 #5
    Re: If you have bad credit....

    I believe your credit will be effected only if you do not make the necessary payments as per your overdraft agreement with your bank.
     
  7. Sep 28, 2008 #6
    Re: If you have bad credit....

    I have spoken to the manager of my bank and he said he wouldn't close my account as long as I kept making payments to the bank. I wasn't able to get a job this summer, (this catrosphe happened all in the summer) so I was unable to make payments to the bank. As the summer days past and I was unable to find a job, the bank closed my account. Luckily for me, my parents helped me out and we talked with the manager of the bank and I was able to established a new account with the same bank, only my account was now a joint account with one of my parents. I am now back in school , and I have both of my after school jobs back and now making weekly payments to my credit line account. Even though my parents paid for my overdraft fees, I still had to pay back the money I owed to my credit line account. With all that said, will making weekly payments towards my credit line help erode my bad credit score?
     
  8. Sep 28, 2008 #7

    brewnog

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    Re: If you have bad credit....

    Do you still owe money? If so, you'll definitely have to keep up repayments in order to repair your score. If you're responsible enough, using a credit card (if you can get one!) can help build up good credit history providing you pay off the balance in a timely manner; just making a few small purchases each month (and paying off the balance in full monthly) can help.
     
  9. Sep 28, 2008 #8
    Re: If you have bad credit....

    Please note...if the bank closes your account...make payment arrangements and bring your balance to zero.

    Otherwise, you'll find out about ChexSystems the hard way. ChexSystems can prevent you from opening an account of any type...anywhere in the banking system...not good.

    So make sure you deal with the problem asap.
     
  10. Sep 28, 2008 #9
    Re: If you have bad credit....

    Have you checked to see what your credit score is? You can get one free credit report per year. Most younger people don't have a very high FICA score anyway. It is great that you had your parents to help you out.

    http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre34.shtm
     
  11. Sep 28, 2008 #10

    Chi Meson

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    Re: If you have bad credit....

    Do not worry! "Bad Credit Rating," that which prevents you from getting a car or house, requires more than a few months of a bank overdraft.

    Personal story: third year in college, I bounced about 25 checks right in a row. This was before ATMs were everywhere, and before everyone had credit cards, so everything was paid for by check, so 25 checks was only 2 weeks of normal spending.

    Thing is, when a check bounced, the bank charged a $15 fee per bounce, so that affected your balance, and in one day $100 evaporates and you don't even know it yet. So after another deposit, you think you have cash available, but it sank right into the deficit hole, and you write more checks, thinking they're good, and then they bounce. Anyway, my credit was *****d.

    About 6 years after that, when I went to get my first car, I had the highest possible rating. The trick is to have one and only one credit card, and never miss a payment, and try to pay the full balance with each statement. So, bank overdrafts are small deals. Credit worthiness comes from proving that you can pay back your debt.
     
  12. Sep 28, 2008 #11
  13. Sep 28, 2008 #12
    Re: If you have bad credit....

    Could be wrong but I have heard that it is better to pay over two or more payments. This apparently shows that you are financially responsible over time where as paying it all off each month shows little more responsibility than paying it up front instead of on credit. So the idea then is to make a big purchase that you have the money for (such as a laptop or new tires for the car), keep the money in the bank and charge it, then pay the bill off over a few payments with the money you set aside.

    Another thing you can do, if you can afford it, is have bills in general and pay them on time. Car insurance and cellphone bills are good standard bills. I paid a two hundred dollar deposit (due to bad credit) for my cell about two years ago and now I have unlimited credit on my account.
     
  14. Sep 28, 2008 #13
    Re: If you have bad credit....

    To build good credit...

    1.) make sure you don't overextend

    2.) open a credit card, a store account (or 2), eventually a car loan

    3.) PAY ON TIME
     
  15. Sep 28, 2008 #14

    Chi Meson

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    Re: If you have bad credit....

    That would be so, perhaps, for the occasional large purchase. But these days, the credit card is used to pay regular bills, gasoline purchases, and now it's used to pay for groceries and the like. We use one credit card for buying everything, so we need to pay it off each month. When we buy something big (furniture for example) then it does take a couple of months to pay it down completely, but in general, it's paid in full.

    Our rating is near-perfect. 788
     
  16. Sep 28, 2008 #15

    Evo

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    Re: If you have bad credit....

    Utilities, like phone, gas, electric, etc... don't report to credit bureaus unless your account is closed, it is written off and sent to a collection agency. Then it is the collection agency that reports it, not the utility. While a good payment history with the utility is good with that utility, it has no bearing with any other utility or with establishing credit as far as a credit report goes.
     
  17. Sep 28, 2008 #16
    Re: If you have bad credit....

    Just be careful with your balances and even if you can't pay the full amount...pay on time.
     
  18. Sep 28, 2008 #17
    Re: If you have bad credit....

    Does that include cell phones?
     
  19. Sep 28, 2008 #18
    Re: If you have bad credit....

    Be careful with utilities...don't get too far behind...if you get turned off...additional deposits and re-connect fees may be required.
     
  20. Sep 28, 2008 #19

    Evo

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    Re: If you have bad credit....

    Cell phones are a bit different as some companies will take into consideration your payment history with another cell phone company if you send them copies of the last several months with the other company showing that every bill was paid on time. You can usually request that they take this into consideration, they don't have to though. If you have bad credit or no credit, they may still want a deposit or put you on a limited spending account. Of course this is true of actual cell phone companies, there are only a few that actually own networks, if it's some reseller, and there are thousands of those, no telling what they might do.

    The up side is that if you are late in paying a real utility company, it won't appear on your credit report unless you are turned over to a collection agency.
     
  21. Sep 28, 2008 #20

    JasonRox

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    Re: If you have bad credit....

    I remember getting an $800 cellphone bill. That was hard to swallow.
     
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