06-15-2012 09:59 AM
I am new to posting here (mostly skulk around in the forums), so I apologize up front if I as some things that may be addressed elsewhere.
I am at a loss as to why my credit scores will not increase. My current credit profile is as follows:
7* Credit Card accounts (MC, Visa, Discover, AMX, and Sams Club card) - All currently have $0.00 balances and rarely go above 5%. Usually pay them off each month. Never carry a balance past 1 month. *One card is also a Co-branded MilitaryStar Card with AAFES account and MC account (2 lines on 1 card). Probably had that one the longest.
1 Auto Loan - 1 1/2 years old now. Never late
1 Personal Loan - A little less than a year old. Never late.
3 Student Loans - Over 2 years old. Never late, currently in In-School Deferrment while I am pursuing a Master's.
0 Mortgages - I completed a short sale without being late on any payments in 5/2010. So it has been over 2 years.
1 Inquiry (for the Personal Loan) in 12 months.
Average age of accounts 6 years. Total Credit Length 11 years 10 months.
So with that set up, I am clocking in at TU-699, EQ-703, EX-712 (using their model).
I have been stuck at these scores for close to 6 months now. From what I have read from forum posts and articles on this site, The installment loans are most likely having little effect on my score as I have never been late and paying them off won't really affect anything (maybe even drop it a couple of points). So, I am not sure what else to do to improve the scores. It isn't like I have a bunch of credit card debt to pay off or anything. I thought maybe the personal loan was causing the problem, but my credit score didn't take a hit at all when I got it (I consolidated some other debt into a personal loan, so I didn't add any more money). The FICO score simulator was useless for me, and the only reason I was given for negative impacts was due to the coding of my short sale (I believe because I haven't been late on anything in over 3 years.
I want to get above 720 (or preferably 760) to get a good rate on a mortgage (plus, I've never been that high before). Is there something I am missing?
06-15-2012 01:38 PM
Looking at your FICO report, on pages 2&3, there's a list of items that help and hurt. If open to sharing, what's the #1 and #2 on the bad side? That's what you should focus on the month.
The new loan is/was a score drain. You might see a small bump when it turns a year.
Even if you PIF your CCs each month, make sure they report balances you'd like to see them report.
06-15-2012 01:56 PM
These are what they show:
1. You have a serious delinquency (60 days past due or greater) or a derogatory description on your credit report.
I am guessing this is the Short Sale, because I don't see any 60 day or later on any of my accounts.
2. You have a short credit history.
This one is odd because it says my oldest account is 11 years 10 months ago and my average is 6 years, but then say the average for high achievers ranges between 6 and 12 years.
3. You recently missed a payment or had a derogatory indicator reported on your credit report. Last missed payment: 2 years 1 month ago (same date as my Short Sale)
Both 1 and 3 seem to be talking about the short sale, because there are no other late payments showing within the last 3 years on my account, anything past that is a couple 30 day lates (not consecutive).
I would have thought I would have seen a boost in the score at the 2 year mark of the short sale, but I haven't seen anything move for months. My credit score rebounded quick after that because I was never late on anything else before during or after that.
06-15-2012 02:21 PM
It has to be the short sale then. I don't have experience with credit related to mortgage, but I would try to see if there is any way to get this status changed on your report.... or you will have to just continue waiting.
06-16-2012 11:11 AM - edited 06-16-2012 11:12 AM
sudent loans IMO
only thing a little unusual
most with 750+ are way out of school and any student loans paid off
everything else is good
low debt on revolving
aged installment car
personal loan ... could be drag
student loans look like drag
if you get a mortgage that could help the mix, mortgages are big pluses
so too many installment loans IMO
5 installment loans to 7 cards seems like a bad ratio
they're usually high balance debt
so your income to debt ratio is out of whack probably
problem with going for advanced degrees
nice type of loan ratios are
1 or 2 installments (1 auto and 1 student)
3 to whatever revolving
once you move outside the 'norm' you see weird fico's
so large debt to earning ratio is probably the biggest drag IMO
06-16-2012 11:34 AM
I had considered the student loans maybe being a problem. The only reason I haven't paid them off yet is I have a couple more years left of bonus payments from the Air Force Student Loan Repayment Program, which pays a percentage of my outstanding loans each year (up to $20,000) so I figured I'd let them pay the majority of it off, while I kept interest at bay (you know, free money and all that). But if is depressing my scores, maybe I should pay 1 or two off...
I guess it should also be said I make some decent money. My debt payments only make up about 7% of my income, so it isn't like they are stifling me. But I guess I could either pay off 2 of my student loans, or wait a couple months and pay off my personal loan. It's my understanding from an installment loan perspective, they like to see 2 years of current payments on a loan before it is paid off. So maybe the personal loan wouldn't be the best thing to pay off just yet.
06-16-2012 12:20 PM
As I was reading your thoughts about paying off your student loans, I wondered if the little bit of interest savings you would get with a "possibly" higher score, would make up for any free money you would lose by paying those loans off. Just something to consider.
06-16-2012 12:21 PM
Student loans are installments and they do not affect Fico scores unless you are late or go into default.
06-19-2012 10:12 PM
06-20-2012 05:03 AM
Thanks for the response tonyaether, nothing would please me more than getting rid of that Short Sale. It really wasn't something I felt I had control over. I hadn't thought about a GW letter though. What do you think the likelihood is that they would accept one? I wasn't ever late and only sold because I had to move across the country for my job. I had tried for over a year to rent out the place before selling it, but with the economy the way it was (is) and that the house was in Nevada, I wasn't getting any takers (everyone was trying to get the hell out of there). Eventually, the neighborhood took a dive and I had to pay for fixing multiple vandalisms, maintenance, non serious buyers, and such before someone finally put an offer on the place, a year and a half after I moved.
Anyway, they took a pretty big hit (somewhere around 60%), so I am not sure how they would respond to the letter...