Re: Success Stories and Encouragem
10-07-2007 01:34 PM
I won't bore you all with the gory details, but with hard work we can all get into the 700's.
I just received the latest alert that my score jumped 61 points (I sh*t you not). Over the past 18 months my FICO scores have consistently gone up to my current score of 735/724/724, respectively. This latest jump is AFTER I opened a department store credit card. You know the ones that tout, "open an account today and save 10% on today's purchase"). Well, I held out until they offered 25%. Yep, 25% off! Needless to say I couldn't resist. Anyway, I'm about sharing the wealth so this is my take on why I believe my scores have improved so well and what I have done that has truly benefited me. For the record, I make 48K, have two auto loans, seven credit cards and a Chapter 13 Bankrupthy from a few years back.
First, we all know that payment history accounts for nearly 35% of your score. To prevent me from EVER being late, I set up ACH debits with all my creditors. What this means is that the credit card companies and auto loans automatically deduct the minimum amount due from my checking account on the due date. Therefore, I am always on time with my payments. This protects me if the mail is slow, the statements never makes it to my mail box, or I'm on an extended vacation to Baghdad. When I pull my credit reports they always say, "PAYS AS AGREED, NEVER LATE". It's the easiest, most fool-proof way to stay on top of the game...and you're never late. If you want to make a larger payment than the minimum, just go online and make an additional payment with the creditor.
Secondly, we know that nearly 30% of your score is usage. I created an excell spreadsheet with all my accounts. Across the top of the page I have the following fields: Account name, year account opened, last used, minimum due, APR, credit limit, ideal available credit, max balance, available credit and the last column is balance due. Each month I update the spreadsheet so at any given time I have a snapshot of my financial debt. One of the things that I watch the most is making sure my credit usage doesn't exceed a self-imposed limit of 20% of my credit limit (not 30% as suggested). If I go over, I make sure I bring it within the acceptable threshold as soon as possible.
Lastly, every six months or so I use a credit card for a small purchase such as gas to keep my accounts active. I know it's suggested to have a zero balance, but this works for me because I don't want one of my longest cards to be summarily cancelled for inactivity so this just keeps me in good graces with the credit crad companies.
Anyway, this is some of the things I do to stay ahead of the game and it seems to be working well for me. I gladly welcome any and all comments or suggestions.