My ex-husband filled out many credit card applications and signed my name before our divorce. After divorce he filed bankruptcy. I paid and closed all those had my name. Recently I discovered there was an unpaid account with my name on it and my credit score went down badly.
Yesterday I received my credit card bills with an interest rate higher than I had known. I have used this one for 10 years now and never missed a payment. I called them up and they said they had decided to increase my rate of interest as I had defaulted on payment. They added that they I could be a risk. Is it possible? Now I have my credit score to repair, can't even use my cards at such high interest rates. I am totally at a loss. Can someone tell me what are my options.
Hi Christina,
Your credit card(CC) company might be using the practice of "Universal Default". This actually means that the creditor, reviews your payment records to other creditors. If they find that you have missed payments or have been late in making payments to other creditors, they may consider you as a bad risk. They can increase your interest rate(if it is in their company policy), when you default on payments to other creditors.
I would suggest that you pay the credit card bill for the present month, with the increased rate of interest. After making the payment you can call them and request to reverse the interest rate to the original, for the next billing cycle. You should ask your CC company to consider your good payment records. You must also either pay off or try to settle the unpaid account which is adversely affecting your credit score.
You must come to a pay for deletion agreement with your creditor, before making the payments. You will find a sample Pay for Deletion Letter in the Letters of Credit section.
I understand your situation. But now there are some new credit card holder's rules, which the President has already signed into law. They will come into effect from 1 July 2010 onwards. The rules have done away with the practice of "Universal Default".
Credit card issuers can no longer increase your interest rate, considering your payment details to other credit accounts. I hope this will be bringing a sigh of relief to all of us. To read more about the new laws you can visit the following link: http://www.creditmagic.org/card/reform-bill.html#29279 .
Credit Crds
I have a great deal of medical debt due to serious medical issues that I have gone through. I have not been out having a good time with my cards or anything. My normal bills are being paid and I even have a leased car that i am paying good on. Why is it that my credit score is such a poor risk? What can i do to help fisk this even though there is no way i will ever clean up what there is on my credit report for medical debt. Help, this is such a burden...
Hi McCall,
Does your original creditor still own the medical debt accounts, or has he passed them to a collection agency? If you cannot afford to pay off in full, you should at least request for a reduced settlement amount. If the medical bills are very old and have passed to collections, it will be easier to negotiate a settlement. I think if you budget your expenses for a few months, you will be able to save enough cash to pay off the medical debts.