Advice on getting to my goals

[Anonymous]

Hello everyone,

I am new to myFico and I am wondering if I can get advice on getting my credit built up. I have been tracking my credit scores for about a year now on other sites like credit karma and the fico score I get monthly with my one credit card. I have watched it go from a low 600 to currently being at a 690-700. It has been a struggling road. I wonder if I can ever really make it into the homeland of 800+, and it seems so daunting. I started not knowing a lot about credit and had paid off an closed unused cards and all those mistakes people do in the beginning, but I have read a lot recently and am trying my best to turn it around.

So here is my rundown:

I have 3 credit cards.  

Card 1 is a bank credit card with $1500 limit, I just paid it off to 0 balance. I have two monthly bills that I have on it that charge $125 a month and I auto pay it off each month. The statement closes on the 9th of the month and they report to the credit bureaus on the 11th.

Card 2 is a regular unsecured credit care. This one has a $8000 limit. I just paid the balance down from $3500 to $125. I just set up my insurance bill to get paid from this card which is $250 a month, and I have set that amount to be auto deducted when due. Statement closes on the 10th and is reported on the 12th to the credit bureaus. 

Card 3 is a store card with a $6000 credit line. Is currently at $3000 balance. I have not  yet figured when this one reports. This one auto deducts a $100 each month.

I have a flexline for my house at $64K. No other mortgage.

I have a car loan at about $19,500

I have a student loan at $6K that is no set to be paid as I am currently in college, but I have $5k in tuition reimbursement from my work that will get paid at end of the semester.

I have one personal loan that was used to get new roof/windows on my home at $14K

I pay everything on time. No missed payments on any of these accounts or utilities or any of my current bills.

I have one bad mark from 5 years ago for missing payments on BOA card. This card account was involved in a lawsuit with BOA due to faulty interest charges they were doing at the time. They sent it to their lawfirm and I negotiated with them and paid off an agreed upon amount, but they had posted past due marks on my account at that time.

I have been trying very hard to get my scores up, as we really want to be getting a bigger home sometime in the next few years.

Any  advice would be greatly appreciated.

[Anonymous]

From what I can tell your doing a good job with your card. To CARD 3: I find that pulling my credit report shows that date when last reported on the account. I use credit karma for that and view full report. You can also do the anuall free credit report thing too and see the day each month the account is updated. I know this because Im waiting till the 17th of this month for AMEX to report for mine and 18 for my Bank of America to report I paid 4K on it before I call for an airline offer the the 19th when it expires.

The car loan scares me to be honest since you are still in school. Warren Buffet still drives his same auto from decades ago. Cars are a risk and never an asset. I just hope you got a good interest rate. Remeber when you pay off the loan though your available credit will go down (which I still find odd) since the loan will be closed. Good setup on your credit cards for auto pay. Thats a master move :-) From what I can tell so far you are doing a great job. Keep it up. Continue to learn about money and dont rush it. One thing I dont see is retirement contribution. Be sure you contribute something. Earlier you start the better off you wil be. I started at 18 and will be fine when I retire. Be sure you learn about that too during your studies. Once that bad mark falls off in two years you will also see a rise. Just continue doing what your doing. Good Job!!!

[Anonymous]

Thank you for the response. I appreciate the advice. I am acutally going back to school to get my bachelors. I have a career as a nurse with an ASN, but it is becoming a requirement to have a BSN for most jobs, so kind of forced my hand on that. The car loan is done in 2020, so just a few more years, and the interest was a good rate. I started a 401K since I first got into nursing 8 years ago and am in my early 30s. As my father said, "just set the amounts and don't think about it." lol. I check it from time to time, but he said worst thing to do was to panick and try to move things around since it is run off the market. I appreciate the advice, this has been a journey and it is very worrisome and confusing at times. PAtience is also not my stong suite when it comes to stuff like this lol.

[medicgrrl]

Typically the lenders report your statement balance to the CRA's. If you're trying to keep some cards from reporting a balance, you'll usually want to pay them off before the next statement cuts.

You've got a nice mix of credit, the 2 factors I see that are holding you back a little are your utilization of revolving debt and the old BoA card. The only one you can do anything about right now is utilization. Try and get that in line a few months before you apply for your next mortgage and you'll see your scores come up. Another thing you'll see raise your scores slowly is paying down the installment

[Anonymous]

I appreciate the suggestions. I was paying $1000 a month to get the unsecured card paid to a low amount. I am trying to put continued balances on them that are 10% UR or under on these cards that I would be having to pay monthly anyways, so should be no net loss on my income as far as that. I was trying to figure out what to do as far as the Flexline and the one store card (its a value city card). We want to put our house on the market in the next couple years as my job may be mandating that all the employees move to their main location or lose their jobs, and they gave us a 5 year span.

Since I paid the unsecured card to being a manageable amount I was thinking of putting the $1000 a month I was paying on that onto the flexline so I can get the balance down to about the $20k mark, so when the house gets sold we would have a good amount to rollover as down payment on another house. The house values around my neighborhood range from $50-80K, and the house is completly remodeled interior and exterior wise, so I am hoping for the higher end of that range.

The difference between a couple months of not paying that amount onto the flexline is about $5k more than if I did by 2020. (I have this on a spreadsheet figured out with all the interest calculated and everything lol).

So should I try to get the store card paid off first or do what I was initially planning? My current UR on credit cards is about 20% since these payoffs I did, down from 44%. They have yet to reflect on myfico, but should be positing anyday now I would think....

[medicgrrl]

Utilization has no memory (although there is a rumor that may change in the future but that's a ways down the road I think).  The biggest thing is to get the utilization down a few months before applying for your next mortgage.  It's not going to hurt anything to go with your plan that you've laid out.  "Saving" for the next down payment is definitely a higher priority than paying down the card right now.  

[Anonymous]

Thanks for the response. Also, I have a question about the store card...

I am running this dilemma in my head. The card is for VCF, and once it is paid off, if I do not utilize it more, they could close the card. Truthfully the card is my oldest credit line, first one I ever got when I moved out of my parents house years ago. Since furniture is not a thing I buy all the time, what is a good way to counteract this? It would take like 6K out of my total CL and remove my oldest account. This is not happening for quite a while, but I should consider this for the future.

[medicgrrl]

AAoA wouldn't be affected for another 10 years if they were to close the account.  I'm not sure that they would necessarily close it, just because of the type of credit it is.  I think it would take a very long time for them to decide to do that due to inactivety.  You say you've had the card for some time now, have you always carried a balance or used it often or have they been good so far about keeping it open even with long stretches of non-use?

[Anonymous]

They closed it at one point due to inactivity. I first opened it in 2003. It got closed (sorry can't remember exact date), and then they let me reopen it in 2007 or so due to getting a new table/chairs. I do not normally keep balances on it. We bought a new mattress and bed frame this year (last one was when I first opened the card lol), which is why it has a balance on it now. I just know that when they first closed it for inactivity that it hit my "average length of credit" becasue I went from having good length to having credit history not established for very long when I applied for a car loan back when.

[medicgrrl]

With the plan you've set out, I really don't think you have to worry about this card being closed since you'll be putting more towards the LOC on the house.  Maybe when you purchase the next house you can find a new side table or picture to purchase to show some recent activity on the card, but I really don't think you have anything to worry about with this account until after you buy your house in a couple of years.  It sounds like they let it sit inactive for quite some time before they closed it before.  And if for some crazy reason it was to be closed again, most lenders will let you recon within 30 days.  You could always call them and tell them you were just getting ready to put a purchase on the account and could they please reopen it.