01-09-2012 08:41 AM
Right now, I have an auto loan (from 8/11), 2 student loans (going back several years), and 1 revolving CC (from 7/11). This year, I was thinking of acquiring 1 additional revolving CC and, if I'm approved, a Zync card (in the hope of eventually acquiring an AMEX revolver that will backdate to 2011 and then cancelling the Zync). I don't have any lates on my CR, but I do have 2 judgements; one from 11/2007 and one from 11/2008. My hope is to take positive steps now, so that when my judgements eventually fall off, I'll have a clean report with 2+ years of positive revolving tradelines.
Does this seem like a good plan going forward to ensure better scores now as well as in the future when my judgements fall off?
01-09-2012 12:41 PM
Since FICO places heavy emphasis in your showing of use of discretionary (revolving) credit, it is helpful to have at least two revolving accounts.
Make sure the new revolving reports to the CRAs.
You need that for credit rebuilding, but be aware that it might cause a short-term hit on your score. A new account will most likely require an inquiry, which will have a small impact for a year. It will also lower your average age of accounts, but it is best to take that hit as early as possible. On the postive side, it will increase your overall credit limit, and thus, providing you keep its balance down, help your overall % util. Additionally, FICO also scores the % of revolving reporting a balance each month. With only one revolving, that is always either 100% or 0%. Addition of another revolving will also give you the middle ground of 50%.
I also would not just wait for the paid judgments to drop due to old age. Have you investigated motioning the court to vacate the judgment on the basis of payment?
Some courts will grant such motions. Not all. I suggest you place a call to the office of the clerk of the judgment court, and have a chat with them about their individual past practice with regard to vacating judgments on the basis of payment. If vacated by the court, CR deletion can be obtained.
01-10-2012 05:39 AM
Thanks, RobertEG! I've been reading these forums for awhile, and it's good to know I've finally kind of figured this stuff out and am on the right track. I'll look into vacating the judgments as you suggested, as well.
01-13-2012 09:49 PM
I would also consider adding a store card to improve the credit mix. Many store cards have very nice benefits in quality coupons/discounts for card holders, financing specials(I use Amazons a lot), or if none of those appeal to you get the Walmart card for the free FICO every month.
What do your scores look like now? What kind of AAoA do you have now?