Where can I improve

Anonymous · ‎10-20-2007

Hi,

I just recd a copy of my credit report. I tried for a refi and the lender said my scores were in the 500's and too low to get approved. Not sure what else to do. My credit is as follows and I would like to know how I can improve it. No collections, judgments, late mortgages, and no CC lates since April 2005.

Discover, Limit $5000, Bal $3768, Pmt $150/mth (Credit Card) (Closed)

5th 3d Bank, Limit $300, Bal 0, no payment (Credit Card) (Open)

GEMB, Limit $2,000, Bal $1734, Pmt $15/mth (Credit Card) (Open)

HSBC, Bal $145,000, Pmt $1006/mth (Mortgage)

Car Loan, Bal $10,812, bal $3947, Pmt $191/mth (Co-signer for daughter's car loan)

Sallie Mae, Bal $6,500, Bal $6500, pmt deferred until 2013 (Co-signer for son's student loan)

WFF/Finance, Bal $26,013, Bal $5222, Pmt $549/mth (My car loan)

All other accts were closed...oldest account was about 1989 but they are all closed now...but were never late. Did not know I needed old accts to keep updating on report or otherwise would have left them open with no balances or did balance transfers. I am going to reset on my mortgage within the next 6 months and while I can handle the payment, I do not want it to increase and pay more if I don't have to. I would like to increase my score and refinance within the next 6 mos. I would appreciate any suggestions you guys can give. My sister referred me to this site and said you guys were awesome. Thanks.

Mike

Message Edited by Mr_Mike on 10-20-2007 09:52 PM

UnderEstimated · ‎10-20-2007

Well, this easy to start with: Pay down those credit cards! Both are well over 50% utilization. You want those under 10%. Also, is that 3D Bank CC still active? You want to try to occasionally use it. With that low CL, I'd just buy lunch on it once a month and pay it off.

In addition, you might want to see if you can get a CLI from any of those companies. It'll help with your utilization ratio and a higher CLI on CCs looks better.

Message Edited by UnderEstimated on 10-20-2007 09:37 PM

Anonymous · ‎10-20-2007

Thank you. Would it help possibly to get one or two new cards and move the balances around so that they are less utilization? Thanks.

John060675 · ‎10-20-2007

Pyramiding is not the best solution. You can get more CC's, and it will lower your util %. However, your score could go down, because of the lowering of the average age of your accounts and because of the inquiries dinging your score.

I think the advice about paying off your CC debt is a lot sounder. FICO loves to see 1% to 9% utilization rate. That is when you will see your score rocket up!

Starting Score: 583 EQ, 612 EX, 569 TU
Current Score: 658 EQ, 648 EX, 618 TU
Goal Score: 720 EQ, 720 EX, 720 TU

Take the myFICO Fitness Challenge

Anonymous · ‎10-20-2007

Mike, I'd suggest getting your cc balances a lot lower than they are now. Like 10% or below. That will immediately impact your scores favorably.

After you get the utils low, after a month or 2, you can apply for another card.

Your scores are pretty low if they are in the 500's. If you can get the scores in the 600's chances are you'll get a decent cc with limits to help your utils even further.

Any 'baddies' on your CR? Like late pays, collection agencies, adverse public records?
FYI, the older a late is, the less impact it will have after 1 year.

Hope that helps.

And welcome to the forum. There's a wealth of info here. Read to your hearts content.

I suggest you read under major thread "Understanding FICO Scoring", messages titled Credit Scoring 101. Good luck to you.

Anonymous · ‎10-20-2007

Thanks again. My car loan will be paid off in 10 mths. Of course, I will use that $549 per month to pay down Discover but what do you thiink will happen to my score. Will it go up because I paid off a debt or will it go down because I paid it off and it will no longer be updating?

John060675 · ‎10-20-2007

Was the Discover account closed by you or the credit grantor? If it was closed by you, then you might want to consider asking them to reopen it.

Concerning the "not reporting" issue. Good accounts will stay on your CR for 10 years, so it still be there even when you pay it off (if it is a good account).

If it is a negative account, then it will stay on for 7 years. I would strongly recommend GW letters for all the baddies on your report.

Message Edited by John060675 on 10-20-2007 11:16 PM

Starting Score: 583 EQ, 612 EX, 569 TU
Current Score: 658 EQ, 648 EX, 618 TU
Goal Score: 720 EQ, 720 EX, 720 TU

Take the myFICO Fitness Challenge

Anonymous · ‎10-20-2007

Mike, I expect your scores will drop after you pay off your car loan. Mine did...big time. You'll be loosing a trade line that balances your mix of types of credit used.

And FICO likes to see a credit mix. It accounts for 10% of your score(see "Credit Education" in black menu bar at top of page)

Message Edited by Sylviatob on 10-20-2007 10:50 PM

Anonymous · ‎10-21-2007

The Discover card was closed by me two years ago. I can call to reopen it, but with my scores low, it probably won't happen.

I have some baddies from 2002 and 2003 which I will write GW letters for and can probably get it taken off.

Once my car is paid off, I will still have a trade line for my daughter's car so I should be okay there. 20 more payments before paid off.

Message Edited by Mr_Mike on 10-21-2007 05:22 AM

UnderEstimated · ‎10-21-2007

It's worth a try to call and try to reopen it. If you've had a good history with them, your scores probably won't impact it as much, but you never know for sure. Give them a call.