My Credit Score

Parent Cafe
1

<p>Hi, I’m pretty ignorant when it comes to finances and money so I’m posting this here. </p>

<p>About 6 weeks ago I got a letter from a collection agency saying that I owed $19.95 to Scholastic books and needed to send it in. I don’t own a credit card and I don’t remember ever buying anything from Scholastic books, so naturally I was suprised. My plan at the time was to call the agency and dispute the charge.</p>

<p>Now, don’t ask me why but somehow I ended up ignoring the letter up until a few days ago when I looked at it again. I saw in the fine print that I couldn’t dispute the charge after 30 days, so I just gave in and paid the 20 bucks online. Afterwards, I did some research and was suprised to read that I might have messed up my credit score by waiting over 30 days. I know it was stupid to blow off the letter, dont ask me why, I’m 20 and lazy. </p>

<p>Anyways, my question is how much damage, if any, did I do? 20 dollars seems insignificant to me, but what I read said that it might be a big deal. I don’t want to destroy my credit rating before I even get started. Is there anything I can do to make it better, perhaps open up a low limit credit card and never use it? Also, I still think the charge might have been some sort of scam–do I have any way to dispute it or has that ship already sailed? </p>

<p>Thanks a lot and don’t be too harsh.</p>

2

<p>I thought Scholastic books was a book club for kids? I remember getting some Goosebumps books from them through my elementary/middle schools as a kid because of the school book fairs.</p>

3

<p>I got some kind of letter like that too years ago. Actually more than one. Mym dad wrote them a letter basically telling them to stop sending me that junk and that I didn’t owe them any money. It wasn’t from Scholastic books though–don’t remember what it was from. Eventually they stopped sending me that stuff. I certainly hope that that isn’t on my credit report!</p>

4

<p>Scholastic is the US publisher for the Harry Potter series, which may help figure out where the charge came from.</p>

5

<p>This probably won’t affect your credit score but you can go online to one of the reporting bureaus and pull your score once a year for free. You should do it just to see if there is anything incorrect on it.</p>

6

<p>Well, if samon doesn’t have a credit card, how could he/she have even ordered the book? Unless samon paid with a check–and would they send the book before the check got to them/cleared with the bank?</p>

7

<p>Don’t worry about it, it won’t affect your credit score. I have seen this type of collection, I thought it was for magazine companies who tried to get you to renew the subscription. I seen them, I tossed them to my waste basket.</p>

8

<p>Your credit score is important and it is good that you are thinking about it.</p>

<p>Take the suggestion above and go online for your free credit report, from each of the “big three” credit reporting agencies.</p>

<p>Do not despair if you see problems on the report. Mistakes are not unusual and you can get them corrected.

Yes, and no. Yes, you should open a credit card account. But no, you should not “never use it.” To earn a good credit history, you need to use credit and pay it off on time.</p>

<p>There are many components to a good credit score. Avoiding late payments is important. So is having a reasonable number of accounts and keeping them current. IE, you can’t have a good credit score by “never owing anyone anything.” So it is wise to open a credit card account, use it minimally and pay it off in full every month. </p>

<p>There are also counter-intuitive elements to having a good credit score - for example, someone who has lots of credit cards might decide to close a few accounts to resist temptation to charge too much and thus improve the credit score. Not a bad plan, but it matters <em>which</em> accounts you close - keeping the one(s) you’ve had the longest is good, as longstanding accounts in good standing are better for the credit score than short-term accounts.</p>

<p>It gets complicated, but you can read all about it online or in a good book about managing your finances.</p>

<p>Finally, it is always wise to question a bill you don’t recognize. Sometimes we forget that we’ve charged something or the billing organization goes by a different name than the one we remember. I think you should still check into that bill from the collection agency, even if the ship has sailed. You will learn something from it. </p>

<p>Sometimes collection agencies are in the wrong. They won’t always cop to that. You, then, always have the option to place a statement in your credit report disputing a claim you believe to be in error. You should always do this, if the situation should arise.</p>

9

<p>If this happened to me, I wouldn’t have paid anything until I knew what the charge was for and if it was really legit. There are just too many scams around trying to extract money from people.</p>

10

<p>Sue them. Make them show you exactly what you owe to who on which account and for what. Threaten litigation. And then tell them they may only contact you between 3:35am and 3:38am on the second tuesday of every third month. If they don’t obey your instruction, it’s grounds for a harassment suit.</p>

11

<p>Hallelujah! You are waking up and smelling the coffee! Procrastinating on the paper work can cost you money, headaches, even a marriage.<br>
Absolutely, check your credit report. You need to know what’s in it and you need to fix anything that isn’t correct. Hopefully it’s mostly a blank slate and no big deal.</p>

<p>Here’s the part you need to know: Say you do get a credit card, based on a good score and you pay, say 17% interest on your monthly debt. Now you get busy and forget to pay your light bill. Eventually the power company turns off the power, you get your act together, pay the bill and the lights come back on. Problem solved? Nope. You are now a “deliquent payer” and it shows on your credit report. Suddenly the credit card company jumps the rates (wait, you say, I was late with the power bill, not the card bill-- well, doesn’t matter) – because of the late payer status, not only may the credit card rate go up, you might get a crummier deal when you go to buy a car, a house, etc. </p>

<p>So, you want a reputation and a history of being a steady, timely payer. It’s like brushing your teeth. Get a system going where you take time to take care and, in the long run, you are way, way healthier. </p>

<p>Those weird bits of mail are a royal pain – view them as baby Medusas – Slay them early before they eat you!</p>

12

<p>If you obtain a credit card, you can have payments made monthly automatically. Its a good way to establish credit.</p>

<p>If there is a charge you question, you can still call and inquire.</p>

13

<p>Can’t you just write “Refused–return to sender” on stuff like that? I mean, if you get another one again. Even when I get magazine offers (and when I was younger my dad would write it on any weird mail I got or offers for “free” stuff that wasn’t even free) I don’t want, I just write that and have the post office get rid of it.</p>

14

<p>My rule of thumb: never ignore these letters. that doesn’t mean pay for something you did not buy. It means, check them out. if there is nothng to them, request they remove you from their records. It could be their error, your error, or worse, someone has used your personal info to charge something. You never know when an old error can catch up with you. I had a $3.78 balance on a JC Penny card (that I had long since cut up) from my very early years living in another state. It showed up 10 years later when buying a car!</p>