Probably best thing you could do at this stage is to get a third revolving credit line of some form. Capital One should be a reasonable one with the scores you indicate currently - I got my first with them when I was still sub-600. Reason being, common perception is that your FICO scores are best optimized when you have at least 3 revolving (credit card) lines posting, and one installment (mortgage, auto, student loan). Further optimization would come from optimizing how your cards are utilized - common wisdom is to have 2 of your 3 cards always post with a zero balance, and the third to post with around 9-10% of your total available revolving credit.
For example: Chase Freedom, Discover, CapOne cards all with $500 limits (just as an example, you do not mention what your limits are). This leaves a total available revolving limit of $1500. You should have 2 of those 3 cards post with a zero balance (pay before statement cut date). The other should post with around $150 used. This should about optimize your profile.
However, I have questions about whether you can break that magical 700 barrier with lates in the 2012/2013 range. You should also look into getting your mortgage company to "goodwill delete" those late entries. It doesn't always work, but if you can get them to do it, it would potentially mean an immediate jump, as your report would then be totally clear.
Other than the above, the only thing you can do is "garden" - work your trade lines to increase your average age of account. Request credit line increases when you're eligible. Refrain from applying for any new credit. Your current lates will be with you until 2020 or so, but will have less and less of an impact as time goes on. Honestly, you're in a pretty good spot right now, and you got nowhere to go but up. Building (or rebuilding after something bad happens) is not a race, it's a marathon. There's so much involved that only time can accomplish. Just whatever you do, do *not* let yourself screw it up again now. You have to use credit, but you have to use it responsibly to improve.
@Thejumpsuitman wrote:My credit limit on the Chase Freedom card is $4,000. I just applied for the Discover today.
The mortgage lates got real ugly. Ongoing 120+ for months on end until it was brought current in March of 2013. on time since on 2 mortgages. 1 is about 1 year old and I have not been late on it.
Am I right to assume that making payments on multiple credit cards will increase my % of on time payments more quickly? For this reason, wouldn't it be better to use more than just one card each month?
Yeah, those 120+ lates are going to haunt you for a while. Nothing says you can't use all your cards a little each month. The trick is, only one of them should report a balance when they post (which usually coincides with your statement date) - and that balance should be 9-10% of your total available credit limit. This is the Utilization factor, and I believe it's like 10-15% of your ultimate credit score.
The 5 main factors of a credit score, and the percentage they impact are:
35% Payment History (this is hurting you the most because of the lates on your mortgage, and probably is the #1 reason to keep you from that magic 700 club for a few more years)
30% Utilization - This is how you can get your best increase right now, by properly managing your utilization. This is the 9-10% on only one card I mentioned earlier that has pretty much been determined to be the optimum.
15% Length of Credit History - This is one you really can't do anything about - only time helps that. Best thing is what is referred to here as Gardening - letting your existing accounts age, requesting credit limit increases if they do not result in a hard pull.
10% Credit Mix in use - This refers to the two different types of credit. Revolving, which is what credit cards are, and Installment, such as a mortgage, auto loan, or student loan. Since you already have both types, you're pretty much fine on here, but having a third revolving will help matters a little, and will ALSO help in the Utilization category, since in theory you'll have the same amount of used credit, but a higher total credit limit.
10% New Credit - This references how much credit you've recently applied for. Research shows that opening a lot of credit lines in a short period of time can often be an indicator of trouble. As you spend time responsibly utilizing that credit, the hit for new credit will gradually decrease, and your Length of Credit History will of course increase.
Just for your own reference, I myself am only part way thru my rebuild (I honestly did it wrong starting out, and am still somewhat paying for it). I have 7 current CC accounts, each one with perfect payment history. One dates back to 2011, 2 back to 2012, and the other 4 were opened last year. Limits range from $400-$5000 on each, and all are over 50% utilization. I also have 2 installment loans, one student loan, one personal loan, with perfect payment history. The only negative entries I have at this point is an old tradeline for my student loans from prior to rehab, with numerous 120 day late entries dating from 2009-2011. I am currently sitting at 665 on MyFico, and the peak I reached at one point was 675. Utilization is my number one issue right now, and one I'm working to solve with a modified snowball method. But even at that, I really do not expect to break the 700 club until 2017, when that old studen loan tradeline finally drops off my report. I hope to have utilization a little more under control within the next 6 months or so, if nothing else gets in the way. I'll also have one more tradeline starting to report soon, as I just had to finance a new vehicle.
It can be done, but it really takes time, and if you can't get those lates removed, that's probably your only option. You can play with utilization, but I suspect that you will top out at around 685-690 range until those are gone. Even when they disappear, you could end up dropping some, as you could end up rebucketed, which is a whole other can of worms entirely.
Basically, I'd try to get yourself a third credit card - Cap One QS or Venture would be a good one, just make sure you have a card with no annual fee. If you have to, get the CapOne Platinum with no fee, and change to QS when you can.
Just my 2 cents worth.
@Thejumpsuitman wrote:Thanks for the advice. I am not too concerned about overusing any cards... Like I said, I have been avoiding them since the 1990s. I have a pretty good income which makes it possible to pay cash for everything I need, but I will have to make a point to use the cards to get my % of on time payments up. According to my subscription here, that is the #1 thing that is hurting me.
Glad to help. With the 4K limit on your chase card, I'd try to charge about $400 on it each month, let it's statement post with that amount, then pay it before the due date to avoid any interest. It doesn't cost you anything to do it that way (no interest) but you'll be showing activity. You really should also get one more tradeline posting to best optimize.
Good luck!