Slowing score increases

[noobafterbk]

Im at 19 months post BK7 and 672 across the board. I have 55k of available credit on my credit cards + auto loan and student loans and cc util of 11% however, after my initial increases since I hit 650 the scores have not seen any major changes and are now 1-3 point increases per month. Is this normal, do scores now slowly rise or is there anything I can do to bump myself up a little quicker - im planning on buying a house in May next year so the closer to 700 the better.  Is the scoring process now based solely on the percentage factors like AAOA util etc and how much is the BK dragging my score down.

[Anonymous]

The short answer is that the recent bankruptcy is dragging your scores down a huge amount.

It's possible that you could nudge your score higher, however.  To do that, you'd need to tell us:

(a)  the original amount of the loan and the amount currently owed, for each installment loan (auto, student etc.)

(b)  how much cash you have available to pursue your attempt to increase your score.

Basically, one FICO boosting strategy for you may be paying down your current installment loans.  (Paying down, not paying off necessarily.)  But we can't know, until we know the answers to (a) and (b).

Another strategy would be to pay down all your cards to $0 except one.  All of those cards would need to report as $0 for a couple months and you would need to keep your total utilization in the range of 1-6%.  That will likely get you some points.  But again, item (b) comes into play here.

Finally you will need to make sure you are opening no new accounts of any kind, even pre-approved ones.

Can you confirm that, aside from the BK, you have no other negatives on your credit reports?  If you have anything else, what was it and when?

[noobafterbk]

Ok, so i have 30k student debt which im paying minumums on because i will only have to pay for ten years and then any remaining will be forgiven due to my work. The balance isnt changing very much because of the payment is just minimum . The car loan was originally 14000k now its 10,250. I could pay down my credit card to 0 if needed this month and maybe then work on my car balance?

[Anonymous]

So your student loan original debt was 30k, and it probably is $29,500 now -- does that sound about right?

And the car loan was originally 14k and the amount owed now is $10,250?

One of the things FICO looks at is your open installment loans.  It looks at the the total amount you owe (all together) divided by the total amount the loans were originally for.  In that sense it's a calculation that is a lot like credit card utilization (total amount you owe / total credit limit).

In your case, the total amount you owe on open installment loans is about 40k.  The total amount of the original loans is 44k.  So your "installment utilization" (40/44) is over 90%.  People here on the forum have been trying to test this, to see where you start to see a significant benefit.  I believe their latest guess is 70%.  So you can do the math on that -- you'd have to spend another $9000 on your car, to get your total installment U to under 70%.  (It looks like you'd need to bring your total debt down to $30,700, if I am doing my math right.)  Note that you'd also need to be very careful to make sure the car loan stayed open all the way till you owned your new house.

That may be too expensive of an understaking for you, i.e. trying to bring your installment debt down to under 70%.

In which case a more cost effective way to gain FICO points would be to pay off all of your cards except one.  All (except one) would need to report $0 for a couple months.)  And the remaining card would need to have a sufficiently low balance that your total utilization was in the 1-6% range.  You should be doing this regardless of what you might try with paying down your auto loan.

So my advice is to pay off the cards (but keep one with a positive balance) and see where that gets you.  While you are doing that, do some planning to see whether the < 70% thing on installment is also doable.  Just bear in mind that it is possible that you might get no benefit at all until you cross to under 69% -- so if you can't go that far, it may not be worth doing at all.

[CH-7-Mission-Accomplished]

Saw this discussion before:

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Balance-on-installment-loan-is-too-high/t...