Increase My Credit Score!

[Red Squirrel]

I'm no expert but I think getting loans and stuff can help increase your credit. You also need to pay some interest. You can't just get a loan and pay it off right away, I don't think that counts. When you do more or less the regular payments, then maybe pay off the rest in one chunk at the end, it shows that you actually did need the credit, but were able to still pay it. That's what they want to see.

I have a credit card, mortgage, credit line, had a Citi loan (shark loan basically) and a few other credit stuff over the years. My score is at 824 (checked it for fun a few weeks ago). My credit card and credit line are both at 0 now, but sometimes they'll have a balance for an extended period, depending on if I had to buy something big.

Really I think credit scores just come with time. Just never have a late payment, use credit but don't over do it, pay things off etc... and it should continue to go up.

 

[SP33Demon]

Correct. FICO looks at your total limits and your total balances with a few exceptions I noted above.

HOWEVER. Not to make it more complicated. Once you get above 50% UTI on any one card/account, you will take a small (like, 1-10 point) hit even if you're <10% total.

Ok thanks for that info, I didn't know that over 50% on any one card would cause your score to drop!

One other question that maybe you can answer, does it matter if you take out a secured vs unsecured bank loan when it comes to credit, or will both increase your score at the same rate?

 

[SP33Demon]

I'm no expert but I think getting loans and stuff can help increase your credit. You also need to pay some interest. You can't just get a loan and pay it off right away, I don't think that counts.
...

I think a secured bank loan that you "pay off" in a year or so will really up your credit if it's lower than 750. If you're maxed out around 800 then yeah, it probably won't do much but add a few points.

 

[alkemyst]

In my experience:

Credit score means nothing at the 'high end' without major trade lines like a car or house. I have seen so many outside of those two arenas come in with 'perfect scores' and not qualify for anything near a decent rate.

While income doesn't factor in to a FICO, it does factor in to the creditor. People that think income doesn't matter are deluded. Even if you fully qualify for the ratios at say $50k a year, at double that income you are probably going to get some incentives to sign the deal.

Also while carrying large balances for a long time and paying properly is great for the lender, it often hampers your score.

My mortgage company went insane and somehow decided to report me delinquent about 3 years ago even though I was paying properly. Within the last two months the new servicer has finally agreed they did get my payments, however; they have no idea where they got applied.

When this first happened I had over $40k of debt, mostly stuff from going back to college a second time in 1999/2000. I had 5 and 6% fixed rate cards that made it a no-brainer to throw whatever school costs I had on them. I didn't qualify for much in student loans at that point in my life. The official statement is you need to be able to save 30% of your income for education costs...in reality if I could do that I probably wouldn't be applying for school loans to begin with.

Anyway that balance due to my mortgage company's error went from a $200 interest payment per month to over $1200. More than the payment I was making on it and at the time more than I could possibly afford as my other debts also spiked.

I got creative and pulled out 401k money, had my wife qualify for a 7% personal loan and took almost 100% of an insurance check from being burglarized and having my home vandalized during it to pay everything down. I then started paying $2500-3000 per month on the rest and then doing the same for 'new' debt.

My score exploded despite still having a 24 month+ delinquency for my mortgage on my record.

I qualified for 3.5% interest on a 5 year old car. I would have gotten 1.99% on my wife's 2012 Mazda 3 when she only qualified for 4% with a credit score over 50 points higher than mine (nearly dinging 800). I had her do her own financing because the 2% spread on a 5 year loan we will pay off in 3, is about the same and when that's done she will qualify for prime rates on major purchases like real estate and vehicles.

IMHO cash flow to debt is a key indicator despite what the reported formula is. My peers report the same belief.

 

[GWestphal]

The judgement finally fell off and my score jumped to 737.

UPDATE WOOT: I recently consolidated some student loans and my score is 763 now!

I've read conflicting reports about whether being an authorized user on my parents card will help me. On credit karma my lowest score is credit age, with an age of 4.5 years. Will it help to be an authorized user? Will I affect my parents score then? What are all the implications of being an authorized user.

My credit limits looks like this:

CC Limits:
$3500
$5900
$15500
$5000
Total ~$30k

What does it take to get to 850? Do you have to have a car or home loan?

 

[blackangst1]

Ok thanks for that info, I didn't know that over 50% on any one card would cause your score to drop!

One other question that maybe you can answer, does it matter if you take out a secured vs unsecured bank loan when it comes to credit, or will both increase your score at the same rate?

This is actually a more complicated question than I think you meant. But I'll go through it.

First, theres secured and unsecured credit cards. In general, the bureaus dont distinguish between the two. It depends on how the lender reports their cards, but the majority of cards are reported as an unsecured card. So its a wash.

Next are lines of credit. There are two sub-catagories here...capped and uncapped. Most people dont have the income to get an uncapped line, so most are capped. Here, though, the size of the HELOC determines how its reported. Generally, if its under $30k, it will report as revolving which will hurt your score. A HELOC over $30k generally reports as installment or "overdraft checking" and has much less impact on FICO. I have also read of cases where a lender will incorrectly report the HELOC's beginning balance (principle only) and current balance (principle +interest) so it actually reports as over limit...which KILLS your FICO.

"Signature loans" are generally reported as installment loans and have a positive inpact on credit.

Loans from a finance company are hammered by FICO, as they typically are only given as a last resort to shaky borrowers. Even if paid off they will continue to hurt your FICO until they drop off.

Then theres the traditional secured loans...mortages, cars, other vehicles...which are reported as either mortgage or installment.

Again, the general rule of thumb is for the highest FICO you want a mix of types of credit.

 

[Suspicious-Teach8788]

people say not to close cards, but I have like 5. isn't opening too many bad also? there's always awesome travel rewards cards out there that give you 50,000 miles (like $500 worth of flights) on first purchase. almost worth getting in on but I'm always afraid of my credit score dropping from new cards.

Not sure what to do.

I guess I want my utilization down low too.

I had a 785 in March on CreditKarma. I have 7 years of history? No loans though. Got a car loan and my score dropped to like 760, but I'm sure it'll climb back up as that hard pull starts to fade off.

Edit: I thought I was close to 10% utilization but I opened a Southwest card the end of last year which gave me a +11k boost. That's enough to keep me well under 10%. Then I forgot I'm on my mom's account still. It's a 16 year old account now and apparently it has a 38k limit. LOL. I was wondering WHY my limit was 70k....

 

[blackangst1]

The judgement finally fell off and my score jumped to 737.

UPDATE WOOT: I recently consolidated some student loans and my score is 763 now!

I've read conflicting reports about whether being an authorized user on my parents card will help me. On credit karma my lowest score is credit age, with an age of 4.5 years. Will it help to be an authorized user? Will I affect my parents score then? What are all the implications of being an authorized user.

My credit limits looks like this:

CC Limits:
$3500
$5900
$15500
$5000
Total ~$30k

What does it take to get to 850? Do you have to have a car or home loan?

First, as part of the FICO08 scoring model rollout, FICO now counts AU's in scoring. So, yes, it will help your FICO being an authorized user *IF* the main user has a good history. Remember...as an AU, you inherit the whole account...good and bad. It wont affect the main user's FICO at all.

Yes having a mortage will greatly imprive your score.

Your limits are irrelevant. What matters is your utilization. With all things being equal, a person with $5000 in limits with <10% UTI will have a higher score than someone with $100,000 in limits with 50% UTI. For optimum scoring you want UTI to be between 1-10%.

 

[blackangst1]

people say not to close cards, but I have like 5. isn't opening too many bad also? there's always awesome travel rewards cards out there that give you 50,000 miles (like $500 worth of flights) on first purchase. almost worth getting in on but I'm always afraid of my credit score dropping from new cards.

Not sure what to do.

I had a 785 in March on CreditKarma. I have 7 years of history? No loans though. Got a car loan and my score dropped to like 760, but I'm sure it'll climb back up as that hard pull starts to fade off.

You always take a hit on new credit for 2 reasons...first, the hard pull on your bureau and second it will shorten your average age of accounts. And no, having a ton of cards doesnt hurt your score. I have 11 cards, but only use 2 regularly. I got the other for either the sign up bonus or for specific rewards.

 

[ultimatebob]

By the way... Credit Karma is crap. Your real FICO score is probably 50 points higher, like mine is.

 

[blackangst1]

By the way... Credit Karma is crap. Your real FICO score is probably 50 points higher, like mine is.

Well, CK isnt FICO, but theres been extensive tracking done on its score. CK pulls TU, which has shown to be about 10-20 points to your TU FICO. Saying your FICO is 50 points higher is worthless without knowing which FICO youre talking about. Tu, for example, has 16 FICO models...thats just TU.

 

[Wreckem]

What pisses me off about all credit scores is how they count student loans with each individual loan being separate accounts. That and GradPlus loans being a hard pull. My graduate loans have caused my account age to be ridiculously low and my only hard pulls are my stupid grad plus loans.

Im not a big fan of credit karma only because TU doesn't show my always on time nearly paid off car note.

 

[DAGTA]

Credit score is a measure of how good you are at being a good debtor. It's nice to have a high score to get a good rate on a house, but a great goal is to get to the point that you don't need a credit score because you live without debt.

 

[SandEagle]

Credit score is a measure of how good you are at being a good debtor. It's nice to have a high score to get a good rate on a house, but a great goal is to get to the point that you don't need a credit score because you live without debt.

'good debtor'. lol sounds so stupid. there is no such thing as good debt.(unless its the kind you donrt bother paying back). a credit score is a tool to keep the fool in debt so that you can become a mindless sheep controlled by the government. people in debt cannot.make choices. they rely on big G for everything. its part of the master plan . whatever that is.

 

[BarkingGhostar]

Wife and I run everything allowed through our Amex, and when that isn't possible we use Visa--both without maintaining a balance. Looking at our Amex annual report, we are running +$50 K though one of the two Amex accounts.

But, probably the biggest impacts (positive) to our scores (both at or above 900) was paying off car loans, student loans, and maintaining a mortgage. BTW, at least one of the reporting agencies state the length of time maintained on an account has a strong factor on your score. I guess it shows you can maintain a long-term relationship.

 

[alkemyst]

over 900 <> FICO.

 

[GWestphal]

um isn't 850 the max?

 

[alkemyst]

um isn't 850 the max?

On a FICO and it's extremely rare for anyone to have that high of a score that actually uses credit.

Getting to 760-770 usually qualifies for uber rates. Over 680 you are in really good territory. Under 660 or so, you have demonstrated you lack of ability or desire to properly handle your debts.

 

[blackangst1]

Vantage Scores use a range of 500-990. Vantage was set up to compete with FICO, uses a completely different scoring model, and really isnt used by many lenders.

 

[highland145]

Loans from a finance company are hammered by FICO, as they typically are only given as a last resort to shaky borrowers. Even if paid off they will continue to hurt your FICO until they drop off.

See this all the time. Figured it was because of the high balance to credit limit ratio. Each refi shows up as another loan. I've been here 7 years and have people with 30 refis, all I1.

Vantage Scores use a range of 500-990. Vantage was set up to compete with FICO, uses a completely different scoring model, and really isnt used by many lenders.

Thought there was another system that collected info like power/phone/rent histories so that you can get a read on people that have zero credit (like my Dad, 75 years old, same phone number since 1962). Heard of anything?

 

[blackangst1]

See this all the time. Figured it was because of the high balance to credit limit ratio. Each refi shows up as another loan. I've been here 7 years and have people with 30 refis, all I1.

Thought there was another system that collected info like power/phone/rent histories so that you can get a read on people that have zero credit (like my Dad, 75 years old, same phone number since 1962). Heard of anything?

I know that a couple of years ago Experian bought RentBureau and started including that info on their FICOs and reports. But, reporting to RentBureau is voluntary, and is normally just used by bigger management companies. So if someone is renting from smaller apartment complexes or just single rooms, it wont report.

As far as utilities go, there are some who do report to bureaus, but most do not (unless, of course, you fail to pay and they either get a judgement or send the acct to collections). There is nothing in the FCRA that Im aware of that would prevent anything from reporting, short of something related to medical (that would be a HPPA violation), so it comes down to cost.

 

[highland145]

Thanks. Local bank wouldn't give Dad a $500 limit card because he had no credit. He says,"I need my $30K from my checking account (yeah, I know, $30K in checking), now. In cash." After a few "but, but, but..." and him demanding "NOW." They gave him the card.

Then they sent Mom one for $750 a few months later.