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Established Member
mattymo
Posts: 18
Registered: ‎09-27-2013
0

How to get from a 640 to 720+ ASAP

My current MyFico.com score is a 641. A year ago, I bought a house and my middle score was 655. So, assuming the scores used were both the same, my score has dropped over the course of a year. My suspicion is that it is due to too many hard inquires. (MyFico lists only 3 recent hard inquires, but other sites list much more, as in 14+ over the past year) My credit was in the low 500's about two years ago due to lots of collection accounts and late payments, all of which I've paid off in some form or another. I've had 2 secured credit cards for about a year and half, a mortgage for a year, and an auto loan for a year. I just recently got approved for my first real credit card. My credit card balances are zero on all 3 cards. It seems I'm being held back by hard inquires, past collection accounts, and the average age of my credit accounts, which is 15 months.

 

I'm looking to obtain another mortgage in about 4 or 5 months and would obviously prefer my score be as high as possible, preferrably 720+. What is the best way to get there given my current score and scenario? Any help would be greatly appreciated.

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Valued Contributor
azguy13
Posts: 5,381
Registered: ‎04-30-2013
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Re: How to get from a 640 to 720+ ASAP

Your best bet will be to let the INQs fall off your report. Do you have any baddies? If you do not have any baddies, then you will just need to sit and wait it out. Building your credit is a marathon, not a sprint. Sadly, your expectations may be a little too high. 

 

To get a better idea, can you list the TLs (trade lines) on your CR? If you have multiple baddies, you may be able to GW them off and get close to your goal score. 




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New Member
benjita
Posts: 16
Registered: ‎07-24-2013
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Re: How to get from a 640 to 720+ ASAP

I don't think the inquiries would drop your score by that much. I'd get a copy of your reports to see that nothing is amiss. One tip is to make sure that any credit cards are reporting your credit limit, not just your balance. Take care of any lates/delinquencies.

Established Member
mattymo
Posts: 18
Registered: ‎09-27-2013
0

Re: How to get from a 640 to 720+ ASAP

Thanks for the prompt replies guys. Couple things:

 

Not sure what "baddies" are. I had several collection accounts that were maybe 5-7 years old that I've since paid, although most were settled for less than the full balance. My last late payment was more than 6 years ago, so recently I've taken great care of my credit.

 

My currently open trade lines include 2 secured credit cards, one with a $200 limit and another with $1000. I don't think either report to all 3 bureaus. I just recently got a legit credit card with a $1300 limit. I also have a mortgage of 145k, down from 147k a year ago. Lastly I have an auto loan with a balance of under 16k, down from 18k a little less than a year ago. 

 

Not sure how to tell if my limits are being reported along with my balances. Not sure it should matter if my balances are at zero. 

 

Like I said, my middle score was 655 more than a year ago so I'm a little perplexed at how I haven't improved substantially since then given my balances are low, I haven't had any late payments, and I've taken on a mortgage and an auto loan. 

 

I think I'm going to get added as an AU on a couple of my Dad's credit cards, but I did this before when trying to get a mortgage. Underwriting made me take them off because they felt it skewed my credit profile and created innacuricies. It wasn't an easy process to get them off. Hopefully underwriting guidelines have loosened at least a little over the past year and a half...

 

Thanks again guys.

Regular Contributor
themizlyne
Posts: 187
Registered: ‎07-06-2013
0

Re: How to get from a 640 to 720+ ASAP

Do you use the cards and then pay them off when you get the statement? If yes, then the cards aren't reporting zero balance. You have to pay before the statement cuts, leave less than $100 on your larger card and then pay that after the statement cuts. Doing this will maximize your utilization portion of your credit score.
Established Member
mattymo
Posts: 18
Registered: ‎09-27-2013
0

Re: How to get from a 640 to 720+ ASAP

This is something I have never been clear on.

 

Is it beneficial to leave a small balance (between 5-10%) on each card, or is better to leave no balance at all?

 

What is the best way to maximize the way credit utilization is weighed through the bureaus?

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Valued Contributor
azguy13
Posts: 5,381
Registered: ‎04-30-2013
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Re: How to get from a 640 to 720+ ASAP


mattymo wrote:

This is something I have never been clear on.

 

Is it beneficial to leave a small balance (between 5-10%) on each card, or is better to leave no balance at all?

 

What is the best way to maximize the way credit utilization is weighed through the bureaus?


It is best to leave a 1-9% balance reporting. 

 

Those paid collections are still hurting you. Once you GW (goodwill) the CAs and they delete the TLs or they jsut age off, your score should jump up. 

 

A previous poster is correct, the INQs aging off your report will not raise your score that much. 

 

Here is a link to a list of all the commonly used abbreviations in case you are confused on what someone is telling you or asking for

 

http://ficoforums.myfico.com/t5/User-Guidelines-General/Common-Abbreviations/td-p/88458




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Moderator
guiness56
Posts: 22,406
Registered: ‎01-17-2008
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Re: How to get from a 640 to 720+ ASAP


azguy13 wrote:

mattymo wrote:

This is something I have never been clear on.

 

Is it beneficial to leave a small balance (between 5-10%) on each card, or is better to leave no balance at all?

 

What is the best way to maximize the way credit utilization is weighed through the bureaus?


It is best to leave a 1-9% balance reporting. 

 

Those paid collections are still hurting you. Once you GW (goodwill) the CAs and they delete the TLs or they jsut age off, your score should jump up. 

 

A previous poster is correct, the INQs aging off your report will not raise your score that much. 

 

Here is a link to a list of all the commonly used abbreviations in case you are confused on what someone is telling you or asking for

 

http://ficoforums.myfico.com/t5/User-Guidelines-General/Common-Abbreviations/td-p/88458


It is best to leave a 9% or under on ONE card, the rest reporting a 0 balance.  FICO will ding you for too many cards carrying a balance and too many not carrying a balance.

Established Member
mattymo
Posts: 18
Registered: ‎09-27-2013
0

Re: How to get from a 640 to 720+ ASAP

Ok guys, thanks for the info.

 

I'll keep abut a 5% balance on one of my cards and leave the rest at zero. I'll also send out some goodwill letters to see if I can get some of my old tradelines deleted.

Established Member
mattymo
Posts: 18
Registered: ‎09-27-2013
0

Re: How to get from a 640 to 720+ ASAP

[ Edited ]

Sample goodwill letter: 

 

October 1st, 2013 

Dear Sir or Madam,

 

I am writing this letter to humbly ask that Capital One make a goodwill adjustment to my account by having it removed and updated with the credit bureaus. I am in the process of trying to obtain a home mortgage and find myself struggling to get approved due to mistakes that I made as a young adult. When I was 18, I did not fully understand the concept of credit, and promptly overextended myself using credit cards and other means of financial leverage. These decisions have cost me thousands of dollars of interest, many hours of time, and hundreds of points from my credit score. Over the past two years, I have done all I can to rectify this situation and all delinquent accounts have now been paid. As it sits, lenders are still weary of loaning to me due to the adverse remarks on my account. I understand this is an usual request, particularly due to some payments being 120+ days past due, as well as the account being charged off. However, I would appreciate any consideration you can give to my situation and any help you can lend towards getting these remarks removed. Thank you for your time.

Sincerely,

****************

Acct no. xxxxxxxxxxxxxxxxx

 

 

Critiques??

 

Edited to remove full name.  guiness56, myFICO Moderator.


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