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I currently have two properties that are in foreclosure, but I've maintained my other bills paying on time, paying more than the minimum etc and they are lowering my available credit limit.

For example Amex I owe $3300, had a credit line of $13k and now they've lowered my credit line to $3400. Is that fair? I was so naive to think that even though I have this foreclosure problem if I paid my other bills it would be so bad but I guess these companies only go by your credit report not by your payment history with them.

Is that true? I've always read on previous posts here that if you maintain your payments with creditors it can help your credit, how's is that possible when all of them are only judging you by what's on your credit report?

Any words of advice? I feel very frustrated, I had a FICO of 795 and it's all gone down the drain because of a bad investment decision. I feel like if they're going to ruin my credit anyway should I just stop paying the credit cards altogether?

livinginnky · Posted: Tue Oct 30, 2007 1:49 pm Post subject:

It is based on the original contact between you and the creditor. Many companies are doing similar things these days and not just with cc's. Some insurance companies are now basing premiums off of credit scores and history. So your car insurance premiums might go up as well. That's right, I know what you are thinking, they actually base your likelyhood of being in a car accident based on your credit not you driving history, makes you wonder doesn't it?

So is it fair? That's up to you. Is it legal? Absolutely.

jenkin7 · Posted: Thu Nov 01, 2007 3:25 am Post subject:

Hello Ivy,

Foreclosure does have such far reaching effects. It not only damages your credit report but the other credit companies may also check their facilities offered to you.

A foreclosure stays on your credit report for 7 years and lowers the score by about 200 points.

If you stop paying your credit card, that will add on further to the negative impact.

I think it is better to make regular payments and try to build your credit as early as possible.

gmakerley1 · Posted: Mon Nov 05, 2007 2:28 pm Post subject:

Of course you won't think it is fair that your credit limits have been reduced. That's only natural. As for legality - yes it is definitely legal. Any time you enter into a credit agreement with a lender, you agree that they have the option to review your credit standing continuously.

Credit issues with one company can easily affect another company, so it is common for an occurrence such as you encountered.

As for making payments, why would you suddenly decide to ruin your credit reputation completely? Refusing to pay the credit cards as well as your mortgage is assuredly not an answer to your situation.

debtstinker · Joined: 05 Nov 2007 Posts: 5 2.48 Dollars($)

Hi Ivy,
first of all I'm so sorry about your situation, you tried to invest in property, something that was once highly valued, and now all of a sudden with the market the way it is you are seemingly on the losing end. You will be ok even though right now it does not seem like that.
I can only speak on the credit card situation as I have some experience with these. definitely pay what you can on those as they can have a large impact on your credit. Every little move you make financially is being recorded for all other creditors to see and so making more than the minimum monthly (if possible) and paying on time will be valuable to you. It's so easy just to say forget this, but please don't do that if you can at all avoid it.
Have you spoken to your credit card companies at all, namely AMEX to see if they'll lower your payments or interest or nicely both? i've had to do that and most credit card companies that i had did work with me as it was in there best interest to do so. I went through consolidation and the reason I'm bringing this up is it did affect my credit score as did other bad decisions, but 2 years later i see my score steadily rebuilding. please do what you can, all you can to preserve the credit score/report that you have and you will be rewarded. Hang in there, glad you came to the forums, lots of people to help you!

Samantha · Posted: Tue Nov 06, 2007 4:54 am Post subject: RE: bad credit and foreclosure

Hi Ivy,

I can feel what you're going through. No doubt, it's sad but you need to get out of this trouble. I agree with what others have said here. It's sad but your credit isn't allowing the creditors to keep the credit limit as it had been earlier.

The creditors will generally go by what your credit report reflects and that's the reason your credit limit is reduced. And why would you ever think of not paying off the cc debts and mortgage; don't even think of it.

Debtstinker is right when she says that every little step counts..it really does count towards improving your score and makes you happy and confident. May be you aren't getting it now but after a few months it will prove to be helpful and you'll get back to the score you had earlier, perhaps even more than that.

Hope this helps...

God bless you.

Samantha

jbarto65 · Joined: 04 Nov 2007 Posts: 622 -0.15 Dollars($)

Hey debtstinker, good to see you here too, as well on the other forums.

Ivy,
this really stinks, my brother has a construction business and his credit card rates have skyrocketed because of his debt ratio, makes absolutely no sense to me, I would pay those off and get rid of them, how do they justify making them unaffordable, he is never late and pays more than he is supposed to with very little being taken off each month.

scherzeroni · Joined: 05 Jan 2008 Posts: 51 18.77 Dollars($)

Maintaining payments are important but you need to prioritize. You should pay the mortgage first. A credit card company cant reposess your house. i would call your mortgage lenders asap to find out what work out solutions that you have to get back on track with these mortgages.

jbarto65 · Joined: 04 Nov 2007 Posts: 622 -0.15 Dollars($)

You have so much against you with credit though seems like when you are trying to build it up, something comes along to tear it down, like a review for credit cards or something stupid like this that is out of your control.

enriko · Joined: 05 Mar 2008 Posts: 67 0.07 Dollars($)

i would reccomend to pay morgage first.
riko

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