Why is my credit SO bad?

Question

I have never had a credit card, mortgage or car loan. I have never filed bankruptcy. I have looked at my credit report and the majority of problems are medical bills. I also have some unpaid utility bills on there. I cannot even get a cell phone without a $300 deposit. Why do these things make my credit score terrible? I though CC's and bankruptcies were the major problems. Can anyone explain?

Answer 1

You might want to visit for many articles on the credit score:
http://www.freewebs.com/infosource100/credit.html



"Top Credit Score Factors and Disputing Bad Credit

By R A Smith

Do you often have too much month left at the end of your money? While you strive to pay your monthly bills on time, computers are keeping a close watch on your performance.

Automated programs keep score on your payment punctuality, and other financial information, which have a direct impact on your ability to qualify for a loan, and the interest rate you will be offered. A score of 700 or better can provide the lowest rates, while a score of 620 or less can mean the highest rates, or possibly no loan at all.

3 Primary Factors That Influence Credit Scores:

Late Payments - Not considered late until 30 days past the due date. 60 or 90 day late payments are more negative than a 30 day late. The age of late payments can influence credit scores. Recent late payments are considered worse than older ones. More serious issues include: consumer credit counseling, collections, bankruptcy, and foreclosure.

Outstanding Debt - Having a large number of open accounts can reduce your credit scores. Another issue is the ratio of your credit limit compared to the current balance. Using 75% of your credit limit is a greater risk than using 25%.

Account History – Older credit accounts can have a positive effect on credit scores, as long they are not delinquent. Having recently opened accounts could reduce your scores. Also, multiple inquiries indicate a possible new account, which may cost a few points.

Incorrect information can sometimes appear on a credit report. If you believe there is a potential error on your credit report, you are entitled to dispute the accuracy of the information. The federal Fair Credit Reporting Act gives you the right to challenge inaccurate information by contacting the reporting agencies, and the company who reported the information. Under the FCRA, they are responsible to correct any errors on your credit report free of charge, and within a specific time limit.

The credit bureaus, Experian, Equifax, and Transunion, are required to investigate your dispute within 30 days of reporting the potential error. They will contact the source of the derogatory information and try to confirm the record. Providing documentation to support your claim, if you have any, can also expedite the process. If the credit bureaus are unable to confirm the derogatory information from the source, the item must be removed from your credit report, which can improve your score. "

Answer 2

I am gonna tell u from my own experience. I had a bad credit history,[not for my fault,but it doesn't matter to those credit companies]
But fortunately ,not all the credit card companies cared about them.
So first applied to some of those credit cards . U will get one .
Now ,unpaid utility bills are very bad for Ur credit rating. So paid them right away. By cash or credit cards.About the medical bills, give them a call and make a arrangement with them to pay at least $10. a month.Do it religiously.or if u hv a forget full mind, arrange a automatic withdrawal from yoUr account.After 2 month give the credit company a call to say that u don't have any unpaid things and ask them to fix Ur credit history. U r on ur way to hv a good credit ratings.In this country if u don't have a credit card that means u r unable to maintain a regular repayment.So if u wanna live in this society , with a good credit ratings [ which is vital if u wanna buy a house or a car or anything], a credit card is a must .

Answer 3

You have yet to establish yourself in the "credit" world. While medical bills & utility bills don't really give you any help in establishing credit, unpaid ones will hurt you more than you'd think.

I am hoping that you are taking steps to pay off your medical & utility bills... this will help your situation when those no longer appear on your credit report. As far as a cell phone... consider getting a pre-paid (there are several offered by different carriers).

To start boosting your credit score - and please do so responsibly - you may want to look into getting a SMALL-limit credit card, maybe through your bank. Use it for something like gas or groceries, pay it off when the statement comes in. You'll be tempted to say "oh, well the minimum is only $... I'll just pay that." Don't fall into that!

But if you start with the cycle of paying it off each month... you'll see your credit start to improve, which will make it easier to eventually get the cell phone or the car loan or mortgage in the future.

Answer 4

Utility bills that go unpaid are nasty for your credit, afterall if you're not paying for things you really need why would you pay for extras like a cell phone?
Since you mention most of the bills are medical, it doesn't sound like you're too healthy, so can they expect you'll be out of a job soon? This may not be fair but it's the facts they look at.
You have to get a handle on your bills, pay them on time and in full. Once that's established you can apply for a credit card. In order to work up your credit rating you'll have to keep payments on time and occasionally you should pay the balance off.
It takes time to build good credit, sometimes years, it takes one month of not paying to botch it.

Most places ask for deposits now

Answer 5

Why wouldn't your unpaid debts make your "credit score terrible?" ALL financial information is reported on your credit report... medical and utility bills included.

Anyone you've asked for more credit can see that you don't pay your bills... and won't be very likely to extend credit to you, the cell phone company included. (They're NOT in the business of providing a cell phone to someone that has a history of non-payment.)

Grow up. Pay your bills... all of them.

Answer 6

Utility bills & medical bills, if you don't pay them, those companys call the credit beuro to give you a bad score, do to the fact that you missed out on some payments, thats why they got you Social Secirty #, anytime payments not being paid or late they they notes & return statues to the credit beuro. The best advice I can give you is -to pay your bills-, you'll be fine, and dining with lots of wine and laughter, lol.< busting my raping ryhm.

Yes CC"s & bankruptcies are also the major one's that affect you on the long run.

Medical bills & Utility bills-you can call your credit beuro, and tell them your sad story & why you did not make your payments>lost job, don't wan't to pay & i thought I can sweep buy it, etc....
Show credit beuro that you can make the payments, and you will see improvements on your score.

Answer 7

you don't have to have a mortgage or car loan, it's what you put on your credit report. yet you can still fix it. call all the dept collectors for the medical bills, don't pay the amount that is shown make a payoff offer (example) the amount is $300.00, offer $150.00 and say you can pay this right now and don't back down they will take it. utility bills I have never experience this but call the creditor to pay them off. when this is done go to creditcards.com and get two credit cards to estiblish credit and make sure you pay everything on time and check your scores for updates. also make sure you tell the creditors to update thier information on your credit report.

Answer 8

1) have NO credit (card) history, coupled with unpaid bills makes your credit score lower
2) unpaid medical bills can be avoided by making small monthly payments until the debt is cleared up (I'll be paying until I die). Additonally, if you has asked for the companies to write of your charges, [many will do this (in hardship cases) to help you] you
could have avoided this as well.
3)Try siging up for a fixed rate for utitlies to help you budget better.

Your current status will remain for about 7 years, but you could improve it with a lot of hard work. Hang in there. You are not alone.

Answer 9

Exactly. You have NO positive credit on your report, only negative. It looks like a. you have no stability (no mortgage, no long term auto) and b. you don't bother to pay the bills you do have. Of course your credit is crappy!

Answer 10

First, you have no credit history (loans, credit cards and mortgages show that you can pay and pay on time).
Second, the history you do have is all negative.