About Credit Scores, Ignorance, Stupidity, and Frustration

In my previous post I mentioned the need for our family to find and purchase a new home. This was easier for me when I was younger, when I had a credit (FICO) score over 800, was not divorced and only had 1 child. At one time I even had 2 mortgages for over a year while waiting for the old house to sell. That was also before the crash of the housing and credit markets, money was easy to get, and just as easy for me to earn.

Skip ahead 6 years, 6 tough years. A divorce and bankruptcy in 2003, $3000 per month to my ex-wife for child support (I never complained about this) and "maintenance" (AKA alimony, this I will forever complain about), and total meltdown of my chosen profession in 2003 and 2004, I find myself with a credit score just a shade above 600. The alimony stopped in December 2007, thank God! It is truly amazing how much of a beating one person can take and still manage to pull themselves up. I won't even mention the gory details of these years of my life, they were very tough years and I would just assume block them out permanently. Kind of like 1987-88, but for very different reasons.

My life is so much better now. I married Missy in July 2007 and we are rebuilding the American Dream together. Life is much better now, and in a strange way I am happy to have experienced 2003-2006. It gave me a new perspective on everything financial. I took so much for granted before that, I always had money, good credit and a great income. I was miserable, but financially I was sound. Now I am broke, but happy. This is a better place to be.

But only for now. Dare I say the best place to be is financially sound AND happy? I think so, and that is the remaining goal. I make a decent income now working like a dog for a great company, workflow.com. Missy is employed as well, the alimony ended in December, the credit cards were paid off (we put some back on them, but that will be taken care of by mid-April), and collections on our credit reports were paid. We did not even know they existed until we pulled our reports, many were 6+ years old!. This is the ignorance part of this post. If you have not looked at your credit report lately, do it! You will be amazed how much information is wrong!

So, back to the credit scores, speaking only in generalizations here. Missy had very little credit history, a car loan, an old credit card account, and a JC Penney credit card she got in 1996, never used, and didn't even know she had. She had 3 items in collections or charge-offs, from many years ago. She did not even know they existed, only one company ever bothered to even call her to ask her to pay. Her score was in the mid-500's, not good. The total amount she owed to old accounts was less than $900. I contacted each of the companies listed in her report and paid them the balance owed. 48 hours later, her FICO score was over 700, well into the "good" area. She literally went from being a very high risk to lenders to a very low risk in less than 48 hours, the change in FICO score was over 150 points!

Now to me, mine is more complicated. Like I said, I used to have a score over 800, but that was yesteryear. When I pulled my credit reports, I was alarmed to see my scores in the mid 500's. Now I am not stupid, I realize I had a bankruptcy in 2003 associated with the divorce, but most people with a bankruptcy hover around 600, so why was I considered more of a risk than someone with a recent bankruptcy? I have established good credit since then, including car loans and credit cards, all with decent rates. Well, let me explain...

In 2003 I went to Oconomowoc Memorial hospital following a 3-day migraine headache that would not go away. I was there about an hour, got a shot of some miracle drug that I still don't know what it was (could have been cocaine for all I know), and left ready to party like it's 1999. I received a bill for about $700 and paid it. Another bill arrived for almost the same amount and figuring my check and their bill crossed in the mail, I discarded it. A month or so later I moved, chasing work in 2003, no more bills arrived even though I left a forwarding address. Well, there were indeed 2 bills, one for the doctor and a separate one for the hospital. Apparently I paid the doctor $700 for him to ask me how I felt (which should have been obvious as hell) and give me a shot. I apparently did not pay the hospital $700 for the 1 hour rental of a bed. I would have happily laid on the floor and saved the $700. This went into collections with State Collection Service of Wisconsin. They never contacted me, just put it on my credit report as a collection. It sat there until I discovered it last month.

I mentioned above that I moved in 2003, and left a forwarding address. This is true, so is the fact that I gave my apartment complex (Country Aire in Hartland, WI) 60 days written notice from my employer regarding the relocation, and knew that I would lose my security deposit. This is the contract that I signed, so all is good, right? Wrong. They turned almost $2800 in broken lease fee's over to La Chapelle Collection Service in Green Bay, Wisconsin that got a judgment against me in 2004. They did contact me, by their own admission and their own records, in 2005. See something wrong with this? They got a judgment against me a year before they bothered to even call me! I even had the same cell phone number following the move, I would have been real easy to locate. They had my new address and my phone number, but used neither. If $2800 was really due to them, my employer would have paid it on request. It was never requested. As stated, they did contact me in 2005 and I refused to pay. I have no defense for this, other than I maintained (and still maintain) that I did not owe them the money. Yep, this was in my credit report as well, and since it was not marked for deletion until 2011, I paid it. Actually I paid $3300. The total amount due was over $4000 with interest, La Chapelle settled for $3300. Because this was a judgment, when I get the settlement letter, I will have to drive 80+ miles to Waukesha County to have it removed from my record. As far as I am concerned, this is scam; get a judgment that a person has no knowledge of, no recourse to fight it, let it collect 12% state sponsored interest for a year or so, then contact the person to get paid? Something is fishy here.

So I moved to Florida. I opened a checking account with SunTrust bank. For various reasons, I only lived in Florida for 4 months before transferring back to Wisconsin. When I got home, I moved most of my money from SunTrust back to my local bank and waited a month before zeroing out my SunTrust account and contacted them by phone to close the account. I thought everything was fine, until I looked at the credit report. Apparently they put $222.87 into collections. I called them to find out why. They told me it was sent to NCO Financial for collection in 2004, they have no records of it other than that. I contacted NCO and they informed me it was sent to Chex Systems. I contacted them via their web site, I could not find a way to actually talk to a human being there. They mailed me information showing that I owed $222.87, but could not explain why or what the money was for. I called them with the number provided in the mail. They had transferred it to Enhanced Recovery Systems, which I contacted next. ERS confirmed the amount and that they were now in charge of the collection, but again, had no information about what the $222.87 was for, other than it was from SunTrust. I had spent 4-6 hours chasing this down and was no closer to figuring out what the collection was for, but needed this removed from my credit record. In a move very unlike me, I surrendered and paid the $227.87 + $9.95 fee to ERS.

The final blemish on my record was reported by the law firm of Paskin and Oberwetter, a Princeton Club fitness center contract that I had defaulted on. Okay, this one I can own up to. I did default on the contract, shortly after signing up with the fitness center, but I did contact the manager via phone and express my dislike of the club. It was dirty and oversold, you could not get lockers for your stuff, and whenever I went the place was full and you had to wait to use equipment. They also rented out the gym and swimming pool to every organization that wanted it, seems like they always had something going on. He said he would suspend the contract. This was my mistake. Don't do this over the phone, get it in writing. Princeton Club sent it to Paskin and Oberwetter for collection, and to their credit, they did contact me, both by mail and by telephone. I explained (in writing, they are lawyers after all) my contention that the contract had been suspended at my request following a conversation with the Princeton Club manager. Some time lapsed, maybe 2-3 months, and I had not heard anything. In this time frame, they reported the collection to all 3 credit bureaus. They sent another letter offering a settlement of $500 (the original charge was almost $700) and I reluctantly paid it.

So where am I now? Theoretically in the same place as Missy. All negatives on my credit report, with the exception of the 2003 bankruptcy, have been paid in full or settled. So where is my 150+ point jump in my FICO score? My score hasn't moved any, not a single point. Why? I don't know, maybe it just needs more time for the accounts that I paid to be removed. Maybe I will have to get my own attorney to force the credit bureaus to remove the accounts that have been paid. Maybe I will have to study the Fair Credit Reporting Act myself, possibly resulting in complaints filed with the FTC. I have notified them using their online dispute forms that these have all been settled. I expect my credit reports will be updated with this information before the end of March.