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Low Score despite good Credit history

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Anonymous
Not applicable

Low Score despite good Credit history

Hi,

I moved into US and acquired by first Credit card in 1999. The history is as follows:

1. Revolving credit : All paid in time throughout. I have currently 7 open accounts, out of which 3 are in use and rest are dormant. Over years I have closed at least 7 accounts, because, I didn't need it. All are in good standing.

2. Mortgage account : One since 2007, all installment paid in time.

3. Installment account : One which is Paid off.again in good standing.

 

Negatives:

4. Collection account : One medical account paid in full. Five months old.

5. Inquiries : 4 in last 12 months, primarily for investigating rates for mortgage refinance. 

6. Closed One credit card account (paid in full) : again because I didn't need I in Nov 09. 

 

My credit score is 660+ now. It was 740+ in Jan 09, only change since Jan 09 is inquires between Jan 09 and Dec 09 and One revolving account closure and Collection account.  

 

Now because of low score, am unable to get good rates. I need guidance into given above situation, what are the measures I could  take to get my score back to 700 plus.

 

Thanks for all guidance to all. Am sincerely hoping I can turn around the score quickly here. 

 

Message 1 of 10
9 REPLIES 9
MarineVietVet
Moderator Emeritus

Re: Low Score despite good Credit history


@Anonymous wrote:

Hi,

I moved into US and acquired by first Credit card in 1999. The history is as follows:

1. Revolving credit : All paid in time throughout. I have currently 7 open accounts, out of which 3 are in use and rest are dormant. Over years I have closed at least 7 accounts, because, I didn't need it. All are in good standing.

2. Mortgage account : One since 2007, all installment paid in time.

3. Installment account : One which is Paid off.again in good standing.

 

Negatives:

4. Collection account : One medical account paid in full. Five months old.

5. Inquiries : 4 in last 12 months, primarily for investigating rates for mortgage refinance. 

6. Closed One credit card account (paid in full) : again because I didn't need I in Nov 09. 

 

My credit score is 660+ now. It was 740+ in Jan 09, only change since Jan 09 is inquires between Jan 09 and Dec 09 and One revolving account closure and Collection account.  

 

Now because of low score, am unable to get good rates. I need guidance into given above situation, what are the measures I could  take to get my score back to 700 plus.

 

Thanks for all guidance to all. Am sincerely hoping I can turn around the score quickly here. 

 


Welcome to the forums.

 

That 5 month old collection is what is hurting you the most in my opinion. It carries the same negative weight whether it is paid or not. 

 

Has the utilization (credit card balances divided by total available credit) on your credit cards gone up recently? The general consensus around here seems to be to have no more than 1-9% of utilization reporting on revolving accounts each month. In fact:

 

Optimal credit utilization for FICO scoring purposes seems to be:
Total revolving utilization > 0 and < 9%, the lower the better, and
Reporting a balance on less than half of your revolving TL's, and
Reporting a balance on half or less of all TL's.

 

 

From a BK years ago to:
7/09 TU-742 EQ- 779
8/09 TU-765 EQ- 783
9/09 EX pulled by lender 802

You can do the same thing with hard work.

Message 2 of 10
Anonymous
Not applicable

Re: Low Score despite good Credit history

Thxs, My total revolving credit utilization varies from 2% - 4%  ( I usually pay off before the statements gets generated). Do you think :

 

1. Usage of dormant credit card by certain amount on monthly basis will help ( I have currently 4 dormant credit card account with 0 balance for almost one year or more)

2.  Should I bring the revolving credit utilization to sub 1% .

3. If their a way to get Inquiries of the record?. 

 

apart from requesting the collection account removal.

 

request feedback. Thanks.

 

 

Message 3 of 10
MarineVietVet
Moderator Emeritus

Re: Low Score despite good Credit history


@Anonymous wrote:

Thxs, My total revolving credit utilization varies from 2% - 4%  ( I usually pay off before the statements gets generated). If you pay before the statement posts with all your cards then you always have zero balances reported and some (not all) folks have stated that not having any balance showing actually hurts them. FICO likes to see some usage but not too much. Try and have only one card report a balance on the statement and then pay this in full before the due date to avoid any finance charges. On the remaining accounts if there are any charges during a month PIF BEFORE the statement posts. Do you think :

 

1. Usage of dormant credit card by certain amount on monthly basis will help ( I have currently 4 dormant credit card account with 0 balance for almost one year or more) What I do is have each of my cards set up to pay a recurring monthly charge and then I'm sure they all show regular activity.

 

2.  Should I bring the revolving credit utilization to sub 1%. FICO rounds up so any percentage between 0-1% will show as 1%. Keep the util below 9% and you'll be fine.

 

3. If their a way to get Inquiries of the record?. I personally wouldn't worry too much about this. Inquiries only make up 10% of your score and although they remain on your reports for 2 years they only impact your score for 1 year. Let them die off of natural causes.

 

apart from requesting the collection account removal. This is the most important thing you need to clear up.

 

request feedback. Thanks.

 

 


All this of course is just my opinion.

Message 4 of 10
Anonymous
Not applicable

Re: Low Score despite good Credit history

Thanks marinevietvet for your detailed response.This helps.
Message 5 of 10
Anonymous
Not applicable

Re: Low Score despite good Credit history

Thanks again.

 

Couple of  query here,

 

1. should i manage to get the collection account of fthe CR, by how much would the score go up aprozimately.

2. How much of a impact does inquires have on credit score e.g. each inquiry results in say 10 points negative impact on score.  

Message 6 of 10
MarineVietVet
Moderator Emeritus

Re: Low Score despite good Credit history


@Anonymous wrote:

Thanks again.

 

Couple of  query here,

 

1. should i manage to get the collection account of fthe CR, by how much would the score go up aprozimately.

2. How much of a impact does inquires have on credit score e.g. each inquiry results in say 10 points negative impact on score.  


I won't guess the impact. It's so hard to say. But doing both of these will cause upward movement and that's a good thing. Smiley Happy

Message 7 of 10
llecs
Moderator Emeritus

Re: Low Score despite good Credit history


AT123 wrote:

Thanks again.

 

Couple of  query here,

 

1. should i manage to get the collection account of fthe CR, by how much would the score go up aprozimately.

2. How much of a impact does inquires have on credit score e.g. each inquiry results in say 10 points negative impact on score.  


1) YMMV based on your CR. If you had a clean report, free of any other baddies, and if this was a new CA as an example, then you could see 70+ easily. If you have other derogs reporting (90+ days or later, CAs, COs, etc.), then points gained diminish. For example, removing your last CA would net a large gain. Removing a CA with 5 others remaining may not result in much of an increase at all.

 

2) Score damage from inquiries is minimal. If removed and less than a year old, maybe a few single points at best. Mortgage inquiries are lumped together for scoring purposes so to have any score impact, all would have to be removed to see any change. If the inquiries are legit, I wouldn't do anything.

Message 8 of 10
Anonymous
Not applicable

Re: Low Score despite good Credit history

Thanks. This truly gives a lot of insights.

 

Request inputs on impact on score due to closure of credit card account (fully paid and in good standing) and if their is impact, how long does it take to recover.

Message 9 of 10
Anonymous
Not applicable

Re: Low Score despite good Credit history

Quick Update on Progress:

 

Got rid of the collection account on Jan 25th and when I pulled my Credit score today, the score were

 

TU, EX, EQ abv 780

 

 

Thxs for all advice given. Did two things to go up from 665+ score to above:

 

1. Remove Collection acount

2. Got the revolving credit to less than 2%

 

Hope this helps.

 

Message 10 of 10
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