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JerseyGirl24
Posts: 3
Registered: ‎10-02-2012
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Improving Credit Scores

Hello. My score is currently 692 and just yesterday I paid off my one account that was sent to collections. Will this improve my credit score and how long will it take for my score to go up? What can I do to improve my credit score. I am 25 and live with my parents to save up to buy a house but with this score I am afraid I will not be able to get a good rate so I just wanted to know how I can increase my score? Thank you for your help.

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mtrsprt
Posts: 335
Registered: ‎07-27-2011
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Re: Improving Credit Scores

Do you have any revolving credit accounts?  If you do, pay them on time.  If you don't, get 2 or 3, use them little, but pay them each month.  Build a solid history now while your still young.


Starting Score: 521 TU, 597 EQ, 574 EX on 6/20/2011
Current Score: 753 TU, 748 EQ, 766 EX on 11/13/2014
Goal Score: 720-740 Across the board


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Shogun
Posts: 12,952
Registered: ‎04-15-2011
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Re: Improving Credit Scores

I know it may not seem right, but a paid collection is not any better than an unpaid.  So you might not see a bump in score.  You will need to send a GW letter to whoever you paid and ask if they will delete the TL.


Starting Score: 504

July 2013 score: EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+

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Current scores after adding $81K in CLs and 2 new cars since July 2013
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Revelate
Posts: 9,735
Registered: ‎12-30-2011
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Re: Improving Credit Scores


Shogun wrote:

I know it may not seem right, but a paid collection is not any better than an unpaid.  So you might not see a bump in score.  You will need to send a GW letter to whoever you paid and ask if they will delete the TL.


That's true for FICO purposes; however, it's a completely different world when it comes to actually getting approved for anything if it's a paid vs. unpaid collection.

 

WFDS underwriter: "Oh come on, you have a $180 open collection? I just shake my head whenever I see someone with one of those."

DCU analyst: "Oh you have a collection, but it's paid, that's good"

 

I kid you not, almost word for word :smileyhappy:.  It's always better to have demonstratably paid your debts, mistakes happen and while FICO doesn't make any distinction as to whether you made them right or not, banks themselves absolutely do care.  The ballgame is more complicated than a simple FICO score for getting through underwriting.

 

That said, I wish I'd known about PFD as a chance before I paid it, but admittedly the collection was my own fault and it won't hurt me forever so long term it's irrelevant.  Easy thing to talk around with an analyst / underwriter anyway once paid: "I was utterly stupid and it is completely my own fault..."

 

 

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
Current Score: EQ 04 673, EQ 8 707, TU 720, EX 702* (09/02/14, EX older)
Goal Score: 700 on EQ '04 (01/01/15)


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Walt_K
Posts: 3,065
Registered: ‎11-02-2009
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Re: Improving Credit Scores


JerseyGirl24 wrote:

Hello. My score is currently 692 and just yesterday I paid off my one account that was sent to collections. Will this improve my credit score and how long will it take for my score to go up? What can I do to improve my credit score. I am 25 and live with my parents to save up to buy a house but with this score I am afraid I will not be able to get a good rate so I just wanted to know how I can increase my score? Thank you for your help.


Where are you getting that 692 score from?  A 692 midscore will be enough to get approved for a mortgage (though it's not all about score), but I am wondering where you are getting your score because there are a lot of different credit scores out there.  Lenders are going to use your FICO score. All other score models are collectively referred to around here as FAKO scores.


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


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kimfl
Posts: 18
Registered: ‎08-07-2012
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Re: Improving Credit Scores

Not ALL lenders use a FICO score-one lender I spoke to used Experian, and another (Wells Fargo) used some company called Rels Credit.

 

If an account sent to collections is well past the statute of limitations for collections in my state, should I even bother with it? I'm talking about accounts that went to collections 5-6 years ago. I feel that I am far better off just leaving them alone and waiting for them to drop off, than to try and contact someone to get them paid.

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Walt_K
Posts: 3,065
Registered: ‎11-02-2009
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Re: Improving Credit Scores


kimfl wrote:

Not ALL lenders use a FICO score-one lender I spoke to used Experian, and another (Wells Fargo) used some company called Rels Credit.

 

If an account sent to collections is well past the statute of limitations for collections in my state, should I even bother with it? I'm talking about accounts that went to collections 5-6 years ago. I feel that I am far better off just leaving them alone and waiting for them to drop off, than to try and contact someone to get them paid.


You are correct that not all lenders use FICO scores, but the overwhelming majority do use the score.  If a lender says they use Experian, they probably still mean your FICO score calculated using your Experian report.  Also, I think (though am not sure) that Rels Credit is a company providing credit report information to lenders along with FICO scores.

Re your collection account, it depends.  If you're asking what you should do to improve your credit score, paying your collections will not improve your FICO score.  If you are able to negotiate a pay for delete agreement, that would remove the collection and improve your score.  That may or may not matter to you depending on what you are trying to accomplish right now.  They will fall off after 7 years, so not that long from now.

 

There are other reasons to pay off collections besides your credit score, but you are correct that you can just wait on them to fall off at this point.


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


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kimfl
Posts: 18
Registered: ‎08-07-2012
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Re: Improving Credit Scores

Yes, I thought I was best off just letting them stay there and not be "disturbed".

 

Here is my other question, and it involves the wide discrepency in score reporting between the bureaus. I subscribe to the three free "FAKO" scores, because it does give me some idea of where I stand. With Creditkarma (TU), which can be updated daily, my score has been at 621 for about 3 or 4 months. Creditsesame (Experian), which updates monthly, just raised my score 43 points in one month, to 683. They showed a tax lien as not being paid, that had been paid for years, and it was finally corrected. Quizzle (Equifax), which you can only update every 6 months, LOWERED my score from 590 to 584 between April and October. In that time, my one credit card increased my limit by $200, and I had no late payments or any new derogatories, just a couple of hard inquiries for mortgage applications. This is a HUGE difference, and when I first starting monitoring my credit in Dec 11, my scores were much closer, and also much lower. Why this big difference? If I go by the 682 score, I should easily quaiify for a mortgage. the 584 automatically stops it. The last time I checked myfico.com score, a couple of months ago, it was 637, and that is what two lenders have pulled. What gives?        

Senior Contributor
Walt_K
Posts: 3,065
Registered: ‎11-02-2009
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Re: Improving Credit Scores


kimfl wrote:

Yes, I thought I was best off just letting them stay there and not be "disturbed".

 

Here is my other question, and it involves the wide discrepency in score reporting between the bureaus. I subscribe to the three free "FAKO" scores, because it does give me some idea of where I stand. With Creditkarma (TU), which can be updated daily, my score has been at 621 for about 3 or 4 months. Creditsesame (Experian), which updates monthly, just raised my score 43 points in one month, to 683. They showed a tax lien as not being paid, that had been paid for years, and it was finally corrected. Quizzle (Equifax), which you can only update every 6 months, LOWERED my score from 590 to 584 between April and October. In that time, my one credit card increased my limit by $200, and I had no late payments or any new derogatories, just a couple of hard inquiries for mortgage applications. This is a HUGE difference, and when I first starting monitoring my credit in Dec 11, my scores were much closer, and also much lower. Why this big difference? If I go by the 682 score, I should easily quaiify for a mortgage. the 584 automatically stops it. The last time I checked myfico.com score, a couple of months ago, it was 637, and that is what two lenders have pulled. What gives?        


There's a lot going on here.  First, Credit Sesame and Quizzle are both Experian.  I don't think there is a Creditkarma/Quizzle/Credit Sesame type service that uses Equifax, but I could be wrong.

Second, not all of your reports are going to have the exact same information.  At least, it is unlikely that they will because not all creditors report to all three.  So you shouldn't expect all of your scores to be the same.  Additionally, even if they did have all the same information, the scoring algorithms weight the information slightly differently depending on which report it is (at least that is true for FICO), so it would be fairly unlikely to have three scores that are the same.

 

When your score is very high or very low, it is naturally going to be a little bit more in line with your scores on your other reports assuming the information is similar across the three reports.  That's because there's either a lot of bad or a lot of good on the reports.  You'll see wider variances as your score improves especially if you have baddies removed from one report but not others.  This is to be expected.

 

Finally, you're comparing various different FAKO scores.  Not only are those scores fairly meaningless, they operate on different score ranges.  So a 584 on a scale that goes up to 850 might not really be that different than a 682 score on a scale that goes up to 990.  Or at least not as different as it seems when comparing the absolute numbers. 

 

This is all a long-winded way of saying that you really have to make sure you're comparing apples to apples.  You can't expect to see the same scores on reports that have different info, and especially not if you're comparing a Vantage score on one report to some other FAKO score on a different report.


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


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New Member
JerseyGirl24
Posts: 3
Registered: ‎10-02-2012
0

Re: Improving Credit Scores

MyFico has me at 692.. Equifax has me at 674. Im just worried at these scores I won't be able to get a good rate. Im just lost in how to improve the score.


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