Advise needed: FICO score has not gone up in 1 year

[Anonymous]

So my FICO score has not gone up in the last year. I check every March as a habit.

I would like some advice on what I can do to increase the score.

Good elements.

All payments on time for the past few years.

Only 1 credit card - not sure if this is good or bad. - Chase Freedom

I don't use the credit card for much and always pay it all on time.

No other debt at all.

No credit inquires on record. They have all dropped off.

Bad elements

One tax lien which will be sorted out this month. State I did not live in was saying I owe them state taxes. Go figure, but I will pay it this year to get the lien removed.

Average Age of Credit card is low. 3 years. I need to increase that but only time can do that.

The idea is to increase the score for a home and maybe a car loan.

[manyquestions]

If you only have one credit card, adding one or two more credit cards will likely make your score go up.  Are there any other closed tradelines on your report to lessen the impact on your age of accounts from dropping a lot if you add more cards?  What is your current score? How far in the future are you thinking about applying for a mortgage?

[Anonymous]

Thank you for the quick response. 

There are no other lines on my account. Nothing closed. Only the credit card and a macy's card which I doubt counts.

My FICO score is between 663 (EQ) and 670 (Experian).

So if i add 1 more credit card -  I was thinking Amex it would lower my average age even further. Does that have a larger effect then having a new card? Or do they balance out?

[manyquestions]

Is the Macy's card open? That counts as a revolving line if it is.  If the tax lien is going to be paid and removed in the near future then I would wait to apply for anything until after that is reflected on your reports. It should make a good score jump for you if that is the only negative on your reports.

[Anonymous]

Yup it is revolving and we use it every few months to buy stuff.

So that counts as 2 revolving accounts?

[manyquestions]

Yes, that is two.  I would wait to apply for another card until your tax lien is removed. 

[Anonymous]

Righto. I had a thread earlier last year about a state tax lien, and that thread here stated that once paid off I can have it removed. After reading the forums a bit it seems it can only be removed after 7 years.

Any idea which is correct?

The thread is here: http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/NJ-State-Tax-Lien-need-removing/m-p/3887840#M...

[manyquestions]

I've never had a tax lien but if you google around and read on various credit forums you will see reports of people who have paid tax liens and had them removed from their reports.  

[Revelate]

State by State basis; and there's no rhyme, reason, or consistency between them.  Federal liens are well characterized and behave predictably, you're going to have to check your individual State laws.

Regarding scores not moving, this is pretty typical for those of us with things like tax liens and BK's lording over our credit report if something else doesn't materially change. 

Advice really depends on when you're going to seek a mortgage, it's way way different if we're talking this year instead of 2-3 years down the road.  Do try to resolve that tax lien first though, I wish I could but California is simply plain difficult.

[takeshi74]

It's not a given that scores will increase over time. A scores are generated based on the data in a report so review your reports with the standard factors and typical weighting in mind.

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

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@Anonymous wrote:

One tax lien which will be sorted out this month. State I did not live in was saying I owe them state taxes. Go figure, but I will pay it this year to get the lien removed. 

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 Derogs tend to have a significant impact and hold one down which is why we always first recommend addressing them.  Getting this removed will definitely help.

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@Anonymous wrote:

Only 1 credit card - not sure if this is good or bad. - Chase Freedom

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@Anonymous wrote:

Average Age of Credit card is low. 3 years. I need to increase that but only time can do that.

Keep in mind that AAoA is an average. It is Total age of all accounts / Number of accounts. You not only want time but number of accounts. General advice is at least 2-3 cards for scoring purposes so you'll want to gradually build to that as your profile allows.

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@Anonymous wrote:

Only the credit card and a macy's card which I doubt counts.

It's a revolver, it does count.

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@Anonymous wrote:

So if i add 1 more credit card -  I was thinking Amex it would lower my average age even further. Does that have a larger effect then having a new card? Or do they balance out?

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A new account will drop your AAoA in the short term.  However, you can't make an omelette without breaking eggs.  You need more tradelines on your reports to build your credit.  As I stated above, AAoA is an average.  Consider how averages work.  More accounts will make your AAoA less susceptible to significant drops if you have more aged accounts.  You can't build a number of aged accounts if you're avoiding opening accounts.  There is a balance that you have to strike.  You don't want to go crazy opening new accounts but you do want to thicken your credit profile with more accounts at a rate that your credit profile supports.

I'd also suggest holding off on appying for anything until that lien is removed.