06-26-2013 01:54 AM
Any tips on how I can improve my credit score? I've read the FAQ sheet and know that the general components to the calcuation of the FICO/credit score... utility, balance, age of accounts, etc.
I have 2 main credit cards - both opened in 2004 and 2005. The CL are about $20K a piece. I usually pay off both cards every month and I cycle about $5000 through them each month.
I have student loans - about $210,000 worth. This is probably my achilles heel.
I also have a car - about $42,000 left.
Other than that - I have co-signed student loans for my brohters to the tune of $16,000.
What should I do? I'm stuck at about 740-750 range.... my wife has a higher score than me and I hold the majority of the finances of the group. Should I apply for more credit cards to increase my limit and keep my utility down?
I know my salary does not come into play here or my score would probably be better.
06-26-2013 02:00 AM - edited 06-26-2013 02:02 AM
Keep your utilization down by simply paying early, but really, if 740-750 is a FICO basline score, short of revolving utilization maintenance there isn't much you need to do besides letting time pass. Being stuck near the gold-plated 760 level doesn't suck, at all. It takes a much longer period of time to go from 750 to 760 than it does from 550 to 650, or possibly even a larger swing than that.
You have a diverse enough mix of credit already between revolving and installment, so opening up additional accounts isn't going to help much, and likely would be a negative in the short term, though I'd probably increase my credit card count as it's difficult to get good rewards coverage with fewer than 3 in my opinion.
06-26-2013 02:56 PM
So really there's nothing I can do to close in on 800?
Is there a specific reason WHY you feel the need to close in on 800? Where you are is not shabby. You have a LOT of debt. but a superior score in spite of that debt.. You say income is not a factor, but it is, in your ability to repay the outstanding debt. It's simply not calculated in the scoring. But don't discount it as a factor in your total credit picture.
06-26-2013 10:51 PM
Keep doing what you're doing, and you'll qualify for the best rates. Also, keep in mind that your score is just 1 facet of the final decision lenders make when extending credit. Assuming your income is sufficient, and you debt (student loan and car payment) continues to come down, you'll be in a good place strategically.
If tactically you want to maximize your score in a particular month, pay off 1 card completely, and let another card report 1% utilization. For the scoring algorithms, 1% utilization is better than 0%. So, make sure $200 is sitting on one of the $20k cards when your statement cuts. You only need to worry about this sort of score manipulation when you're trying to get those extra couple of points for the purposes of a loan application.