Want to Improve

[Cowlick]

Been reading these forums for quite a while to get tips. I am already appoved for my mortgage but would like to improve my score more going forward according to the My fico site my scores are EQ 672, TU 658 EX 663. I really want to get at least to 700 for piece of mind. I have 6 cc total limit of $10850. My utilization is around 12% as I mostly pay my card in full every month. No late payments for more than 2 years. 6-7 inquiries on each report. 2-3 collections on each report but they are all paid been paid for a while now more than a few years. Any pointers also I would like to get another cc after I close on my home or maybe a personal loan just to pay off my vechicle in which I will pay half of the payoff and have the loan pay the other half. Current cards are Cap1, Credit 1, CU of TX, Emblem, Macys.

Any help will be appreciated thanks.

[Anonymous]

Congrats for paying your cards in full.  That is a great first step.

There's a way to squeeze out some extra points from the credit card portion of your score.  And that is to pay all of your cards to $0 except one and make sure that they keep reporting at $0.  With the remaining card make sure that the balance reports at a small but positive number.  You want your total utilization to be 1-5% with this approach. 

That said, you don't need to do this with your cards every month.  Just when your are trying to see how many extra points you can get short term.  It's not a strategy that will help you in the long term (i.e. doing it many months in a row).

The real thing holding you down is your derogs.  You may want to make a list of these and their dates and then head over to the Rebuilding sub-forum.  They may be able to help you on getting these removed.  Be sure to explain the amount of the original collection; paid collections that were originally for < $100 have no impact on your score.

Don't be over optimistic, however, about your chances of getting the collections removed.  Before they were paid, you had a decent chance of negotiating with the creditor.  You could have said, "I'll pay it but only if you delete it altogether from my report."  This is called Pay For Delete, or PFD.  But since they are already paid, you have no leverage to push the creditor to delete them.

I had a terrible credit report back in 1999.  Loads of bad stuff.  My solution was to just keep my head down, use debit cards, resolve not to get into any more trouble, and accept that I was going to have a troubled report/score until everything fell off in 7 years.

Your idea of taking out an unsecured personal loan to pay off a secured loan (car) sounds like it couldn't be a good idea.  The interest rate for the unsecured loan will be much higher than the loan for a car loan.  You may want to explore the possibility of refinancing the car loan. 

[Cowlick]

Thanks for your response I will try and squeeze a few more points that way. I am already just using the one card and keeping it below 30%. So I will see what affect that has when I do it. As far as the loan I just wanted to do it to just get rid of the auto loan. I can pay it off but not trying to deplete most of my savings so I figure I get a loan for half of what I owe and pay the other half therefore my vehicle is mine and what ever the loan payment will be it will be lower than what my current note was. I got a pretty good relationship with my CU so I think my rate will be very acceptable compared to a big bank. I will give more thought about it after I close on my home. Still interested to see how the my fico scores compare to what the broker gives me when I lock my rate in next month.

[Anonymous]

 Great advice from CreditGuy!  All of it.

I just wanted to clarify what he meant by "pay all of your cards to $0 except one." He means pay them down to $0 before the statement closes. And the one that you don't pay down to $0, pay it down to less than 9% before the statement closes. It doesn't matter how much you charge during the course of the month. It only matters how much is left on the cards when they report (which is when the statement closes). That's the key that will get you those points.

Maybe you were clear on that, but I just wanted to make sure. 

[SouthJamaica]

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@Cowlick wrote:

Been reading these forums for quite a while to get tips. I am already appoved for my mortgage but would like to improve my score more going forward according to the My fico site my scores are EQ 672, TU 658 EX 663. I really want to get at least to 700 for piece of mind. I have 6 cc total limit of $10850. My utilization is around 12% as I mostly pay my card in full every month.

Your paying your card in full every month has no effect on the "utilization" the way FICO computes it. Utilization is computed as of the statement date. So if you want to (a) properly compute your utilization and (b) bring your utilization percentage down, you need to focus on paying the balances down before rather than after the statement date.

No late payments for more than 2 years. 6-7 inquiries on each report.

You can improve your score by not applying for anything.

2-3 collections on each report but they are all paid been paid for a while now more than a few years.

You can hire someone like Lexington Law to do it, or you can, on your own, send the bureaus letters requiring verification of the collections. Some may fall off due to the failure to obtain verification.

Any pointers also I would like to get another cc after I close on my home or maybe a personal loan just to pay off my vechicle

In the short term the personal loan will hammer your score because once it reports it will show high utilization. So if you do get a loan, do your utmost to pay it down to at least below 80% as fast as possible.

in which I will pay half of the payoff and have the loan pay the other half. Current cards are Cap1, Credit 1, CU of TX, Emblem, Macys.

Any help will be appreciated thanks.

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