topic Re: Seeking advice from experts on how to improve scores quickly (current status attached) in Rebuilding Your Credit

Seeking advice from experts on how to improve scores quickly (current status attached)

isilon01 — Thu, 14 Jun 2012 12:18:17 GMT

TU: 655 (FICO), EQ: 640 (FICO)

Total past due: $0

Credit history: 17 yrs

Revolving accounts: $1500

Installment accounts: $12k (consolidated student loans)

Mortgage: $0

Collections: 0

According to my "Credit-At-A-Glance" page, I have 7 accounts with negative indicators. They are for 3 old student loans of mine. One of them I settled (and paid off) in Feb, 2012 for less than full balance and it's being reported as "payment after charge off/collection". The other two I was able to consolidate in 2011. Originally I took out only three loans from Sallie Mae in 1999, over time they must've sold my accounts to other parties and some of them sold to others again. That's how I ended up with 7 negative entries for the three loans. Since November, 2011, my unsettled two student loans have been consolidated and I've since been making payments on time.

I am trying to improve my FICO scores before I buy a house end of this year/early next year. I have 2 credit cards (Discover & Master) as authorized users (total combined credit limit of $18k), 1 secured card ($5k limit), and 1 additional one (primary card holder/Visa from Capital One) with a credit limit of $750 that I got approved for in 2011.

My question for you credit experts is what can I do to improve my scores quickly? According to the "Best Action" FICO score simulator tool, I'd be in a 734-774 range in the next 24 hours as long as I make payments on time. I am thinking of getting another $10k secured card and start using it. Would that help my FICO scores noticeably? I'm just looking for ways to improve quickly this year to save on my mortgage interest rates. I searched this forum and found a post from another member asking if paying down student loans would help improve scores and the answer was basically NO. Any insights/suggestions would be greatly appreciated!!

Thanks,

Mike from Midwest

Re: Seeking advice from experts on how to improve scores quickly (current status attached)

llecs — Thu, 14 Jun 2012 18:03:54 GMT

You can certainly try GWing these SLs. However, they are old, and if older than your AAoA, there's a risk of them deleting instead of removing the lates alone. I'm timid when it comes to messing with old accounts.

You have 4 CCs. I don't recommend adding another. You'd see a net loss initially because you already have a good mix. That loss would fade away within 6-12 months, but the CC wouldn't help any. How is your current CC util? Ideally get 3 of the 4 reporting to $0 and get the remaining to report a balance of under 9% of the CL. YMMV on your credit of course, but going from 35%, as an example, down to 9% can net some folks 30-40+.

Re: Seeking advice from experts on how to improve scores quickly (current status attached)

RobertEG — Thu, 14 Jun 2012 22:48:34 GMT

The quickest way to gain score improvement is in the one area where you have total control, and where prior reporting has no historical memory.... that area being & util of revolving credit. However, that does not necessarily give the greatest improvement, and of course, requires $$ out of pocket.

The most score improvement usually comes from obtaining deletion of old, reported derogs. However, that is not usually the quickest, as it involves obtaining creditor agreement, over which you have no real control.

Get all accounts either paid or in good standing, and then continue GW efforts for requested deletion.

Pay down % util to the extent possible.

Re: Seeking advice from experts on how to improve scores quickly (current status attached)

isilon01 — Sat, 16 Jun 2012 18:23:46 GMT

Thank you for your reply. When you say prior reporting has no historical memory, are you saying if my util of revolving credit for June, 2012 was 50% and I paid it down to <10% in July, 2012, then my previous 50% util wouldn't have a long term effect on my FICO scores? I thought max/highest util $$ showed up on CRs.

Re: Seeking advice from experts on how to improve scores quickly (current status attached)

RobertEG — Sat, 16 Jun 2012 21:19:42 GMT

FICO only scores current % util.

Prior % utils may be of concern to creditors when evaluating such things as potential CL decreases, but they dont retain scoring in FICO.

Highest balance is only used by FICO in situations where the credtior is not reporting an actual CL, such as with some Amex open lines of credit that are due in full monthly.

Re: Seeking advice from experts on how to improve scores quickly (current status attached)

mschang — Sat, 16 Jun 2012 21:43:22 GMT

Thanks Robert that answered my post, too. As someone who literally just started cleaning up her credit, i'm looking forward to seeing my credit score creep up as I keep util low and clean up my CR