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Can't Get MyFico Score to 700.....Please Help

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freedom2
Valued Member

Can't Get MyFico Score to 700.....Please Help

Good morning and Happy Easter to those who celebrate.

 

I have been trying....really, really trying....to raise my FICO scores for a c ouple of years now.  My problem is not late payments or even utilization as much as fixed debt.  I own my home and a condo down the shore (I live in NJ).   Both homes have a mortgage and I am never, ever late with those payments.  I have credit cards, probably roo many, but overall utilization is under 20 percent.  I realize I should get it down to <10 percent.  I'm working on that.  I think my problem is a Parents Plus loan I took out in 2008 for  my son's NYU college expenses.  For those unfamiliar with this loan product, it is a federally-backed loan program for parents of college students.  Since I took out a Parents Plus loan for all 4 years, my total loan =$130,000.  I pay $1100.00 monthly on that loan.  I still owe about $117,000.

 

Despite my on-time payments (never, ever late) on this loan, my mortgages and my credit cards, I cannot get my FICO scores above 680.  I know this is due to all of my fixed debt.  I still have 8 years of repayment on the Parents Plus loan.  My question is this:  Can I expect my scores to remain at the 670-680 range until my Parents Plus loan is paid off?  I am thinking that must be the reason my scores remain low.  Other people on this forum (and not on this forum, as well, obviously) have mortgages and most scores are well over 700.  

 

Am I doomed to remain in this lower credit tier for 8 more years?  Any advice would be so very appreciated.  Thank you all for reading.

Starting Score: 650
Current Score: 654
Goal Score: 700


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Message 1 of 7
6 REPLIES 6
Appleman
Valued Contributor

Re: Can't Get MyFico Score to 700.....Please Help

Lets look at the credit score break down:

 

Payment history 35% - sounds like you are good here

Amount owed 30% - this is likely hurting you. You are correct that getting utilization down will help. Do you have any one card that has a 50% or higher utilization?

for your installment loans as you pay down the balance compared to the original loan you will see improvement.

Length of credit history - 15% longer positive history is best AAoA 5-7 plus years

New credit - 10% Any recent accounts?

Types of credit 10% Sounds like you have a good mix

 

You may want to see what SoFi.com can do for you with the Parents Plus loan. You can rate check and it is only a SP. It will be a HP if you go through with the application.

Sounds like you had a 15 year term on the Parent Plus? Interest rate?

 

A couple of things you might consider: Do you have a budget so you are not generating new debt? Many programs available to help get a realistic picture. For me YNAB changed my relationship with money. When I get the urge for retail therapy, big purchase etc I pull up my budget and realize I really can't afford something. This is stressfull for many as you have to say no to yourself and family at times. I was on a path to keep up with the Jones' all the way to the poor house.

 

Another recommendation would be to look at a Snowball/avalanche program. Undebt.it is free and there are others. This will allow you to see how quickly you can be debt free if you stick to a budget.

 

I am certainly not making any judgment calls here, just trying to get you some tools that can give you a realistic view of the current debt. Not all, but many of us are here because in the past we have not made the best financial choices (I'm first in line).

 

I bet others will chime in as well, good luck and Happy Easter

 

Message 2 of 7
SouthJamaica
Mega Contributor

Re: Can't Get MyFico Score to 700.....Please Help


@freedom2 wrote:

Good morning and Happy Easter to those who celebrate.

 

I have been trying....really, really trying....to raise my FICO scores for a c ouple of years now.  My problem is not late payments or even utilization as much as fixed debt.  I own my home and a condo down the shore (I live in NJ).   Both homes have a mortgage and I am never, ever late with those payments.  I have credit cards, probably roo many, but overall utilization is under 20 percent.  I realize I should get it down to <10 percent.  I'm working on that.  I think my problem is a Parents Plus loan I took out in 2008 for  my son's NYU college expenses.  For those unfamiliar with this loan product, it is a federally-backed loan program for parents of college students.  Since I took out a Parents Plus loan for all 4 years, my total loan =$130,000.  I pay $1100.00 monthly on that loan.  I still owe about $117,000.

 

Despite my on-time payments (never, ever late) on this loan, my mortgages and my credit cards, I cannot get my FICO scores above 680.  I know this is due to all of my fixed debt.  I still have 8 years of repayment on the Parents Plus loan.  My question is this:  Can I expect my scores to remain at the 670-680 range until my Parents Plus loan is paid off?  I am thinking that must be the reason my scores remain low.  Other people on this forum (and not on this forum, as well, obviously) have mortgages and most scores are well over 700.  

 

Am I doomed to remain in this lower credit tier for 8 more years?  Any advice would be so very appreciated.  Thank you all for reading.


By my count you have at least 3 big installment loans. As you pay those down your scores will go up, all things being equal. And the sooner you pay them down, the sooner your scores will go up. That's the reality.

 

If you want to enhance your scores you should have more than half of your credit cards reporting a zero balance, with the others reporting 9% or less.

 

You chose to incur a massive amount of debt. No one doomed you to that. If you want to make a huge dent in your FICO scores sell the condo and use the proceeds above the loan to make a dent in your other loans and credit card accounts.


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 3 of 7
freedom2
Valued Member

Re: Can't Get MyFico Score to 700.....Please Help

Thank you Appleman and SouthJamaica.  Your input is very helpful....and sobering.

 

Appleman:  I wasn't aware of these programs!  That is my mission today.  To check into them and see if I can refinance the ParentsPlus loan.  As for credit cards, yes, you are correct.  I find when I don't have cash in hand, I reach for the credit card.  My budget is somewhat out of conrol.  No excuses here. My younger son is a third year student at Rutgers.  Rather than take out ANOTHER loan, I am paying that ($30,000 annually) out of pocket.  As a result, that leaves very little available cash; hence the high credit card utilization.  But you have given me a very sobering analysis of my credit portfolio, and for that, I am more grateful than you realize.  I do need to stop unncessary purchases.  There isn't much I can do about my loans a tthis point unless I refinance, but as for my credit card debt, I am going to pay everything down to zero over the next 6 months.  That is a realistic goal. I cannot pay it all off at once.  Because of you, I am creating an Excel spreadsheet today with all my fixed expenses, and list all of my stupid credit card balances, which really should be close to zero.  You have provided me with a path to becoming credit card debt-free.  I am also going to be on the phone today and researching the programs you mentioned.  Thank you so much for your thoughtful response.

 

SouthJamaica:   Yes, I realize I took on these Parent Plus loans of my own free will.  Educating my children has always been a priority in my life.  I don't regret it one bit.  My question was really just related to being able to raise my scores with these loans in place.  I know that I need to reduce my credit card balances to zero in order to see an increase in scores.  You are absolutely correct in your response.  As I stated, my goal now is to reduce all credirt card debt to zero over the next 6 months.  Hopefully, that will result in a bump to my scores.

 

I also realize that nobody doomed me to my scores, but myself.  But as I also said, I'd do it all over again since I didn't have the cash to pay for tuition.  I would love to sell my condo but it was purchased in 2005 at the height of the real estate market.  It is now upside down.  I paid $150,000 and would be lucky if I could sell it for $90,000 now.  So selling it is not an option.

 

Thank you both for responding.  It made me realize that my loans not withstanding, I can realistically raise my score by at least 10 points if I pay off all my credit cards.  Again, thank you both for your reponses.  They are greatly appreciated!

Starting Score: 650
Current Score: 654
Goal Score: 700


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Message 4 of 7
SouthJamaica
Mega Contributor

Re: Can't Get MyFico Score to 700.....Please Help


@freedom2 wrote:

Thank you Appleman and SouthJamaica.  Your input is very helpful....and sobering.

 

Appleman:  I wasn't aware of these programs!  That is my mission today.  To check into them and see if I can refinance the ParentsPlus loan.  As for credit cards, yes, you are correct.  I find when I don't have cash in hand, I reach for the credit card.  My budget is somewhat out of conrol.  No excuses here. My younger son is a third year student at Rutgers.  Rather than take out ANOTHER loan, I am paying that ($30,000 annually) out of pocket.  As a result, that leaves very little available cash; hence the high credit card utilization.  But you have given me a very sobering analysis of my credit portfolio, and for that, I am more grateful than you realize.  I do need to stop unncessary purchases.  There isn't much I can do about my loans a tthis point unless I refinance, but as for my credit card debt, I am going to pay everything down to zero over the next 6 months.  That is a realistic goal. I cannot pay it all off at once.  Because of you, I am creating an Excel spreadsheet today with all my fixed expenses, and list all of my stupid credit card balances, which really should be close to zero.  You have provided me with a path to becoming credit card debt-free.  I am also going to be on the phone today and researching the programs you mentioned.  Thank you so much for your thoughtful response.

 

SouthJamaica:   Yes, I realize I took on these Parent Plus loans of my own free will.  Educating my children has always been a priority in my life.  I don't regret it one bit.  My question was really just related to being able to raise my scores with these loans in place.  I know that I need to reduce my credit card balances to zero in order to see an increase in scores.  You are absolutely correct in your response.  As I stated, my goal now is to reduce all credirt card debt to zero over the next 6 months.  Hopefully, that will result in a bump to my scores.

 

I also realize that nobody doomed me to my scores, but myself.  But as I also said, I'd do it all over again since I didn't have the cash to pay for tuition.  I would love to sell my condo but it was purchased in 2005 at the height of the real estate market.  It is now upside down.  I paid $150,000 and would be lucky if I could sell it for $90,000 now.  So selling it is not an option.

 

Thank you both for responding.  It made me realize that my loans not withstanding, I can realistically raise my score by at least 10 points if I pay off all my credit cards.  Again, thank you both for your reponses.  They are greatly appreciated!


When you pay off the credit cards leave one reporting a small balance; for some strange reason FICO's algorithm monster prefers that to all accounts at zero.

 

In paying off the installment loans, there are certain thresholds which -- when you cross them -- give you a little pop in your scores. No one knows for sure what they are, but numbers like 79%, 49%, 29%, and 9% seem to come up in a lot of discussions. So you may pick  up points on those loans when you cross those thresholds.

 

And another place to pick up points is purely passive, but powerful... the passage of time. The older the average age of your accounts, the older your oldest account is, and the longer you go without applying for credit.... these are all going to increase your scores.


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 5 of 7
Appleman
Valued Contributor

Re: Can't Get MyFico Score to 700.....Please Help

Freedom2. One of the more difficult things I have encountered is staying motivated to pay down the debt. Right now you are highly motivated and that makes taking action easier. I would encourage you to take a tempered approach and see how you and the family adjust to the changes. Like dieting, extreme changes rarely result in long term success. There will be many bumps in the road and as long as you continue in the right direction you are likely better off than yesterday.

 

Or, if you like you can borrow from the group AA and the 12 step program. The people that are most successful are the ones that attend meetings regularly and have a sponsor to help them stay the course. (I have experience working with people with various addictions but am not a professional therapist). Motivation cannot be a one time event. I don't imply that being in debt is the same thing as being an alcoholic but there are techniques that can work for making meaningful change.  I enjoy participating in forums such as this one to help stay the course.

 

My personal opinion is that you made choices based upon very positive goals. I hope you are able to share your experiences with your kids, not as a means of guilt but of the importance of fiscal planning and/or restraint.

 

I do have a question for you. My kids are not far from starting college and of course that is concerning for most parents. My estimation is that I have around 1/2 of what I need to get them through their first degree. Were there any options for your kids to get student loans or was your income to high and student loans were not an option? Or was the Plus loan the only option? Very curious.

 

 

Message 6 of 7
freedom2
Valued Member

Re: Can't Get MyFico Score to 700.....Please Help

Good morning, Appleman --

 

Thank you once again for your sage advice.  I realize paying down debt is a lengthy process.  My abiity to do so is hampered by cash outlays monthly towards tuition payments, but I have set a goal, and barring any unforseen setbacks, should be able to get my cc debt to <10 percent over the next 6 months or so.

 

As for the Parents Plus loan, NYU tuition, including room and board and other fees, was over $60,000 a year.  My son was able to take out loans on his own, which he did.  Unfortunately, those loans were capped depending on what year he was in.  For eample, I believe it was $1500 his freshman year, $2500 his sophomore year, $35oo his junior year, and $5000 his senior year.  Because his total tuition was over $240,000, what he was able to take out was a drop in the bucket.  I used all of my savings to pay about $100,000 of his total tuition cost.  It was obviously not enough.  The interest had been I believe about 4.5% initially, but the feds raised the interst rate to 6 percent during his tenure at NYU.  College education is ridiculously expensive.  My younger son chose to attend Rutgers so he did not have to go into debt.  As I mentioned in my previous post, I pay about $2500 for room and board there.  That, coupled with mortgages on my 2 peroperties, leaves me cash poor. lol.  I'm sure there are thousands of others in my same shoes.

 

I guess my problem is that creditors see my scores and view me as a high rish (socres between 675-680) when, in fact, I am a very good payer.  I will eat bread and water if need be, but my bills get paid and they get paid on time.  So for any lenders out there, not everyone with low scores are bad payers.  We just have debt.  I wish you and your family luck, Appleman, with your children's upcoming college experience.  Be prepared for sticker shock, as even state universities run well over $20,000 a year.  If I can give you any other assistance, please let me know.  And thanks again for your advice and reply.

Starting Score: 650
Current Score: 654
Goal Score: 700


Take the myFICO Fitness Challenge

Message 7 of 7
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