20 Y/O recent college grad in need of your valuable insight! Thank you!

[Anonymous]

Hello everyone!

I'm very new to this but you all seem to be so knowledgeable and have such valuable insights- I hope you can help! I have been monitoring my credit via Transition for awhile now and I'm looking to try to take steps to make my credit score the best is can be as I am anticipating hoping to apply for a mortgage with in the next 1-2 years. I think I'm off to an OK start- I am 20 y/o and have just graduated college so most of what is reporting are installment accounts (school loans). I'm not sure if this makes a difference but all of my loans are government loans and are a mix of subsidized and unsubsidized (and all of them remain in deferment for right now). I took my first loan in August of 2009 and have $25,342 in loans right now- I have been trying to throw a couple hundred dollars here and there at my interest throughout school. 1 of the school loans shows as "closed"

In addition to my school loans....

• I have a Victoria's Secret card which I opened in December 2009 which has $960 limit and $0 balance
• A card with a jewelry store that I opened in November 2010 which has a $2000 limit but a balance of $1169 (no interest for a year so I am taking my time in paying this)
• Chase Freedom CC since April 2011 with an $1800 limit and a $700 balance
• I just opened a Bank of America CC and was approved for a $2000 last month with no balance so far.

My Transunion score is reporting as 712, Experian is reporting 698, and Equifax is reporting a 700.

The report says " these are the factors impacting your score:

• Time since oldest account opened is too recent. [TransUnion, Experian , Equifax]   Time is an important factor for a healthy credit score. Giving the accounts time to mature may allow creditors to better understand how you pay your debts.

• The available credit on your open bank credit card accounts is too low. [TransUnion, Experian , Equifax]   Having credit available to you is a sign that you are able to manage your finances responsibly. Lenders usually like to see that consumers have a large amount of credit available to them.

• You have no real estate accounts that can be used in determining a credit score. [TransUnion, Experian , Equifax]   A healthy balance of credit and loan accounts is key to achieving a high credit score. It is important to build a record of responsible credit use over time with different types of accounts.

• Not enough of your accounts have been paid on time in recent months. [TransUnion, Experian , Equifax]   Payment history is a significant factor in the credit scoring process. Regular on time payments may make you more creditworthy to potential lenders.

Note [ TransUnion ]:  In addition to the factors listed above, the number of inquiries on your credit report has adversely affected your credit score."

I am a little bit confused as to some of this information. I have ALWAYS paid my bills on time- I never missed a payment. Also, it seems as though 3 years is a pretty long time to have established credit (though I suppose this is relative). I did not think my utilization was too high either?

Can anyone provide some insight as to what I can do to improve my scores? I want to be in tip-top shape when it's time to apply for other CC and/or a mortgage.

Thank you in advance for any feedback or insights you may be able to provide!!!

[-Cain-]

Where did you pull your scores from? They may not be FICO scores, and if they aren't, those reasons are not necessarily true for your actual FICO scores.

[Anonymous]

Welcome to the forums!

Although I'm sure someone much more experienced than myself will also come along and help you out, I figured I would provide some insight to a few of your questions.

In regards to the hints/factors it gives, they are very general and aren't going to ever be very specific to anyone.  They might pick up on some basic or obvious tendencies, but even then it might be misleading.  Your main concern should be what is actually in your report, which appears to be in good standing, as in no baddies on your report.

The reason it might be showing up as not making payments on time could be due to your deferred loans.  Are they currently being reported as OK, or are any of them showing late payments even though you aren't currently making payments?

In response to your credit utilization, ideally you want to be between 1-9%, so in that respect, you do have a pretty high util in FICO's eyes.

Your average age of accounts is low, and your credit history as a whole is short compared to what FICO would see as normal or average.  3 years of good history is a great start, but you have to remember in terms of averages, that is very new/short history compared to people who have 50 years of history.

My main advice would be to definitely start paying off your balance on your jewelry store card, as it has extremely high inidividual util (almost 60%).  I would also work on your Chase balance as well to lower your util overall.  Depending on what interest you're paying on the Chase balance, you might want to pay that off first and then work on your jewelry card, nonetheless, carrying balances that high is a no-no in terms of boosting your score.  Lowering your overall util will definitely give you a boost in your score.

[-Cain-]

Welcome to the Forums! It is widely believed here on the forums that for best results utilization reported should be anywhere between 1-9% on one account, with the rest reporting a zero balance. 3 years is decent for accounts, is that your oldest account or your AAoA (average age of accounts). Keep making on-time payments and you should be fine. It appears those factoring reasons are for FAKO scores. You may wan to consider getting your Equitax FICO score here from this site. Your Experian score is going to be harder to come by. The TransUnion score offered here is an older version, but probably a bit more accurate than other FAKOs. Good luck, and ask questions, everyone is here to help.

[RobertEG]

For one with only three years of credit, you have excellent scores!

Length of credit, at 15% of scoring, has approx 125 pts to garnish.  In addition to AAoA, your oldest TL is also part of length of credit. 

An oldest acct of three years leaves a lot of pts to be garnished.  The new card also resulted in a reduction of AAoA.  It takes time......

On the positive side, you now have multiple revolving, so no pressing need to for new revolving that would further lower your AAoA.

Always paying bills on time builds scores by NOT adding negatives, while slowly aging your accounts.

I would discount the comments about needing higher credit limits.  FICO scores % util of CLs, not the CLs themselves.

You are doing the right things.  I would take pride in such good management of credit at your age rather than feel discouraged about the fact that you have not yet garnished points that come only with age.

[llecs]

OP, ditto to everyone. Ignore the scores you pulled and ignore the advice you posted. Those are not FICO-related. Looks like it came from TrueCredit, or a resell of TC like SmartCredit, EIDT, etc.. The FAKO used is most likely a VantageScore. That score can go up when FICO goes down and vice-versa. Ignore it. And sometimes taking the credit monitoring service's advice can actually hurt your FICO. Definitely pull your FICO so you can see where you stand.

I'll also throw out that while the scores and advice are bogus, the report data is good and many of us subscribe to services like that to track the goings on on our reports, then come back here to track FICO.