What are tips to improve

[Anonymous]

Sorry if there's a thread on this but I couldn't find it. Can anyone give some tips on improving a score if everything is at a good point already? CCs balance under 30% utilization being paid each month, school loans and mortgage being paid, good credit history. Anything extra that one might be able to do to get to the 800 mark?

Thanks!

[Anonymous]

Sure.  The first place to start is your credit cards.

How many do you have?  For various reasons (not all of them scoring-related) it's a good idea to have four.  (More is fine, but there's no scoring advantage.)

You mention that you are keeping your reported utilization at under 30%.  Actually you are taking a scoring penalty for that.  The penalty begins as soon as your total util goes over 8.99% (that's counting all cards together). 

Likewise there is a penalty for having most or all of your cards reporting a positive balance.

You can solve both the utilization problem and the "too many cards reporting a psoitive balance" problem by having all your cards report zero except one (AZEO), which would report a small balance, like $10 say. 

Note that the "penalties" discussed above, while real, are also fleeting.  As soon as you implement AZEO (and your new CC balances report) those penalties vanish and your score goes back up.  Therefore you may decide that it is more work than it is worth to try to do AZEO every month.  Instead, it may be easiest to just use your cards naturally, and then in the 45 days before you need your scores to be at their highest, implement AZEO then.  (Example: shortly before you apply for a car loan, or a mortgage re-fi, or whatever.)

Very glad to hear that you are paying your cards in full each month.  That's a separate issue from utilization, but it is a great idea for several reasons, and it will become more and more important from a scoring perspective in the future.  Moreover, you won't be able to "instantly" create a history of paying in full, as you can with the fleeting issue of CC utilization, so great that you are doing it now, well in advance of when it will become so important.

There are some tricks you can implement with installment loans when your loans are for small amounts, but since you have a mortgage that doesn't apply.  Just make choices regarding your mortgage that are smart financial moves (whatever those turn out to be).

[Anonymous]

Thanks so much for the reply. Love the tip about AZEO. I will try my best. I currently have three credit cards. One is at zero, one is at 0.9% utilization and the other is at 27.5% utilization. Once I get closer to 9% i may think about opening another. Appreciate the advice!!

[Anonymous]

Your total utilization (which considers all your credit limits together) may already be at < 8.99%.  Each card does not need to be at < 9% of its own individual credit limit.  It's the total U that needs to be small.

I realize reading your original post again that you don't actually say that you are paying your cards in full each month, though that's what I thought you said.  That should be your next goal, far more important than getting a fourth card. 

The advice about the fourth card is based on something that I believe will benefit you in the medium to long term.  In the short term (i.e. the first few months after you add it) your score might go down, which is not uncommon with a new account.

Also do be sure to use every card that you have once every six months (more often than that is fine of course) and also make sure you use any new card within 90 days of opening it.  Both are important to ensure that your cards will never get cancelled due to inactivity.

[Anonymous]

Such great advice, thanks! Once I get this one card down to being paid in full I will continue to paying in full from then on. I just did the math and I am JUST over 9% total utilization so I'm almost there! I'll update as time goes on. Thanks again!

[vanillabean]

My tip is more a lifestyle change than a trick. Make the statement date your due date. It may sound crazy because why would you want to pay your credit card bill 25 days earlier than you need to? Think of it as an emergency fund that provides you with a 25 day buffer to fall back on for unexpected situations; you’ll sleep better at night knowing so, and your utilization will be lower giving you a higher credit score.

A lifestyle change tends to take some getting used to, but once it’s a habit and you can sit back and relax, the upsides begin to make sense. One such upside is that the number of days from the new due date to the next is exactly the same as from the old due date to the next; there is no difference, except you get to keep your emergency access and your better score. Every month forever and ever.

But where am I going to get the money from for the initial month? It’s probably easier than when you have an unexpected emergency on your hands, which not only is more expensive because repair costs more than preventive maintenance, but also is charged to your credit card leaving you to pay interest with less money to pay off the principal.

An article the other day describes The simple mistake people make when they try to eat healthy. The conclusion is that instead of consciously evaluating all of the information we have about a product, our brains rely on simple assumptions such as the belief that healthy foods always cost more. Paying by the statement date is the healthier choice and costs less in the long run.