topic Re: No Idea what to do in Understanding FICO® Scoring

No Idea what to do

Anonymous — Tue, 27 Nov 2018 03:53:20 GMT

My score has been low to mid 600 for the past year. I have around 60% credit utilization that I have been and will pay down but the evolution of my score is just inconsistent. Every month I pay my debt down and some months my score goes up, others it goes down. When it goes up it's by 2 to 8 points, when it goes down it's by 20 to 40.

I owe roughly 11k which I am hoping to pay down by next summer. But I would love to see my score go to 700ish.

I had 2 late payments over the past 5 years. Should I call the lenders to ask to stop reporting it?

Re: No Idea what to do

Anonymous — Tue, 27 Nov 2018 03:57:10 GMT

First thing first, how are you monitoring your scores?

Re: No Idea what to do

Anonymous — Tue, 27 Nov 2018 07:16:34 GMT

Mostly through the score app from my Discover, Capital One cards. But i do buy a credit report every now and then which is how i found out about my 2 missed payments over the past 5 years.

Re: No Idea what to do

Anonymous — Tue, 27 Nov 2018 08:59:55 GMT

Actively managing your credit is the best way to grow your scores and profile. Some people just go on autopilot and it works out well sometimes, and not so well other times. My advice would be:

Go to www.creditchecktotal.com and buy a $1 trial to get your three FICO8 scores and your reports. Go over them with a fine-tooth comb and see what negatives you have. If you’re taking large drops, something is happening in there. Cancel before 7 days is up so you aren’t hit with a $30 recurring monthly charge. Buy another $1 trial whenever you feel like it (at least monthly IMO).

Make a spreadsheet that lists each account, its limit, balance, % utilization, payment due date, and statement cut date. Put alerts in your phone’s calendar for payment due dates and set reminders for a week in advance and a couple days in advance. Log in and pay more than the minimum before the due date (on the first reminder) and log in a few days ahead to verify the payment has cleared (on the second reminder). Your spreadsheet can be as basic or as elaborate as you like. Mine is active with formulas in cells so as I update a balance, my % utilizations (individual and aggregate), available limits (individual and aggregate), and even another section with pay-down to scoring thresholds update automatically. Your needs/wants may vary but I like having ALL relevant info right in front of me.

Set up autopay as a backup. Do not rely on it solely to pay your bills. Use it only as a safety net. Actively pay your bills monthly and let autopay backstop you in the rare instances where you can’t do it yourself (illness, or whatever might keep you from logging in).

Log into every account you have a couple times a week and skim it - make sure no dates have been missed, and no unauthorized charges have appeared. I take a few minutes each and every morning when I get to work to eyeball each account, update my spreadsheet with any payments or charges made, and to check that all is well. Do it on the same days each week so it becomes a habit (“Today is Tuesday, time to check the accounts”). Don’t do it haphazardly or you’ll run the risk of not checking it that one time that could’ve made a difference. Err on the side of caution.

It might seem tedious or excessive but it will put you completely in the driver’s seat with your credit and you’ll start seeing better score increases and better payment activity as you become more immersed in keeping both hands on your credit.

Re: No Idea what to do

DollyLama — Tue, 27 Nov 2018 12:50:52 GMT

@Anonymous wrote:
My score has been low to mid 600 for the past year. I have around 60% credit utilization that I have been and will pay down but the evolution of my score is just inconsistent. Every month I pay my debt down and some months my score goes up, others it goes down. When it goes up it's by 2 to 8 points, when it goes down it's by 20 to 40.

I owe roughly 11k which I am hoping to pay down by next summer. But I would love to see my score go to 700ish.

I had 2 late payments over the past 5 years. Should I call the lenders to ask to stop reporting it?

Is the 2 late payments the only derogs reporting on your account? No charge offs or collections? When your score drops 40 pts something major is going on. It could an old collection that suddenly starts reporting after years each month now, or have you paid off an only installment recently? Been actively seeking credit with hard pull inquiries?

You stated your utilization is around 60%, are your individual cards at that percent, or some tetering on 98% and others much lower? Thresholds are reasons that go scores up and down also. Overall is the most effective, but individual is important too.

Your goal should be your next overall utilization to pay down to less than 48.9% of all your total credit lines. Then you can work on the next goal of <28.9%, which is a major threshold here, and keep going.

If your account with lates is still an open account, and your payment history has been perfect since, yes I would call and ask if they can be removed. If a closed account, do a goodwill letter over and over, each month pleading for removal.

Re: No Idea what to do

Anonymous — Tue, 27 Nov 2018 13:32:16 GMT

@Anonymous wrote:
Mostly through the score app from my Discover, Capital One cards. But i do buy a credit report every now and then which is how i found out about my 2 missed payments over the past 5 years.

Capital One does not provide a FICO score (it's TU VS 3.0) so you can ignore that all together. Focus on that Discover score for now and you can also get a free score from creditscore.com. If you want to keep an eye on your late payments, sign up for Credit Karma where you'll get weekly updates to your TU and EQ reports... just look at the reports and ignore the scores, as they're meaningless like what you see with Capital One.

If you're at 60% utilization now, you're leaving around 50-60 points on the table on your FICO scores compared to if you were at AZEO with that one card reporting a small balance. So, add those points to the score you're seeing from Discover right now and that's about where you could be next summer if you get that utilization down to a single-digit percentage like you are planning.

Re: No Idea what to do

Anonymous — Tue, 27 Nov 2018 15:14:49 GMT

Thanks Devil for the comprehensive answer.

I do most of what you say except the excel spreadsheet which i will start. I do however login almost everyday now. This has become an obsession. I do not use the cards anymore, i am in going out of debt mode. Whenever i use the cards, i log on and make a payment again. I was told using the cards and paying whatever is used helps also. But the goal is still to pay them all. So i will use maybe $300 per month on all my cc accounts (2 chases, 1 Capital, 1 Boa and 1 Discover).

Which is why i am so dumbfounded as to why the score is still around 630.

When i log into credit sesame, they say the number of pulls are too high (Financed a car back in May) and that my Credit usage is too high (which i know). The other thing they say is not good is that i dont have a mortgage so my account mix is not good. Just car, cc and store account.

I do not see any collection reporting. Just the 2 missed payments that were paid, accounts were closed. One in 2013 and one in 2017.

Is it worth calling them to ask them to stop reporting since these accounts (car) were closed?

Re: No Idea what to do

Anonymous — Tue, 27 Nov 2018 15:26:23 GMT

@DollyLama wrote:

Is the 2 late payments the only derogs reporting on your account? No charge offs or collections? When your score drops 40 pts something major is going on. It could an old collection that suddenly starts reporting after years each month now, or have you paid off an only installment recently? Been actively seeking credit with hard pull inquiries?

You stated your utilization is around 60%, are your individual cards at that percent, or some tetering on 98% and others much lower? Thresholds are reasons that go scores up and down also. Overall is the most effective, but individual is important too.

Your goal should be your next overall utilization to pay down to less than 48.9% of all your total credit lines. Then you can work on the next goal of <28.9%, which is a major threshold here, and keep going.

If your account with lates is still an open account, and your payment history has been perfect since, yes I would call and ask if they can be removed. If a closed account, do a goodwill letter over and over, each month pleading for removal.

Im not sure what a charge off is but yes, the only negative are those 2 missed payments. I have one collection but that is not reporting as it's a scheduled payment plan.

I havent sought credit with hard pulls since May when i financed a car. Funny thing is after the car was financed, my score went up 20 points.

Good insight on the number of cards and which one with the most utilization. I didnt know that, and i do have one that is at 90%. So i should focus on lowering this one first as i understand?

Both accounts with late payments are indeed closed. A goodwill letter is just a letter where i ask them to please stop reporting? And i snail mail it every month?

Many thanks for the help!! I already feel better knowing what to do next.

Re: No Idea what to do

Anonymous — Tue, 27 Nov 2018 15:29:04 GMT

@Anonymous wrote:
@Anonymous wrote:
Mostly through the score app from my Discover, Capital One cards. But i do buy a credit report every now and then which is how i found out about my 2 missed payments over the past 5 years.
Capital One does not provide a FICO score (it's TU VS 3.0) so you can ignore that all together. Focus on that Discover score for now and you can also get a free score from creditscore.com. If you want to keep an eye on your late payments, sign up for Credit Karma where you'll get weekly updates to your TU and EQ reports... just look at the reports and ignore the scores, as they're meaningless like what you see with Capital One.

If you're at 60% utilization now, you're leaving around 50-60 points on the table on your FICO scores compared to if you were at AZEO with that one card reporting a small balance. So, add those points to the score you're seeing from Discover right now and that's about where you could be next summer if you get that utilization down to a single-digit percentage like you are planning.

Thanks for the tips. I will sign up with credit karma.

What does AZEO mean?

Re: No Idea what to do

Anonymous — Tue, 27 Nov 2018 15:29:29 GMT

It can’t hurt, but results are definitely not guaranteed. You’re better off with the aforementioned GW campaign.

Where you may be taking a score hit if I understand you properly, is in paying your cards all to zero. If you report a zero balance on every card, FICO dings you for not using your credit. For the details of the mechanics on this, do a search on “AZEO” here on the forum. In a nutshell, pay all cards off to zero before the statement cuts, except for one card. Let that one card report a balance between $10 and 8.9% of the limit of that card. Once the statement cuts, pay off the card. This gives back the points you’re missing for not using credit, and also maximizes you for the most points you can get based on your utilization, profile, and history.

Re: No Idea what to do

Anonymous — Tue, 27 Nov 2018 15:32:23 GMT

Definitely get that card under 88.9% - pay it to around 86% so that when the interest hits, you’re still under 88.9% (that’s the usage threshold where a lender considers a card to be maxed out). Your score gained points with the car loan because having revolving credit (credit cards) and an installment account (loan) diversifies your portfolio and FICO awards points for that.

Re: No Idea what to do

DollyLama — Tue, 27 Nov 2018 15:52:15 GMT

Forget the you don't have a mortgage out of the whole equation. Having a reporting installment (fixed payments a month, not an open ended line of credit) loan, satifies the credit mix.

The $300 monthly towards CCs, is this your minimum or over minimum? If it's slightly over, it may be awhile to see score movement as interest accures and not enough principal is being paid down.

What devil mentioned is crucial. Creditors get spooked when your are running high on utilization, and often will either balance chase you (lower your line of credit as you pay it down), or the worst- close your account with a balance. You definitely want to avoid this at all costs.

Re: No Idea what to do

Anonymous — Tue, 27 Nov 2018 16:01:27 GMT

Thanks for the tips. I made a payment on that one card with a high utilization to get it down to around 80% this month and will keep lowering it.

I was told to also open a few store cards which apparently are easy to open and it will increase your credit. Just open it and not use it.

Is it a smart idea?

Re: No Idea what to do

Anonymous — Tue, 27 Nov 2018 16:04:22 GMT

@DollyLama wrote:
Forget the you don't have a mortgage out of the whole equation. Having a reporting installment (fixed payments a month, not an open ended line of credit) loan, satifies the credit mix.

The $300 monthly towards CCs, is this your minimum or over minimum? If it's slightly over, it may be awhile to see score movement as interest accures and not enough principal is being paid down.

What devil mentioned is crucial. Creditors get spooked when your are running high on utilization, and often will either balance chase you (lower your line of credit as you pay it down), or the worst- close your account with a balance. You definitely want to avoid this at all costs.

I usually pay double the minimum due on all cards each months and then do another payment per card each month of anywhere from $100 to $500 depending on monthly expenses.

I had no idea the can close your account even with a balance. Even if you make monthly minimum payments? Then what, they send you to collection?

Re: No Idea what to do

DollyLama — Tue, 27 Nov 2018 16:14:47 GMT

Won't send to collection only if you cease payments or start running over 30 days, etc past due and do not catch up. They can review the account after some months and reinstate it, over keep it closed until payoff- but the bad side if closed with balance is that the credit util for this one card if happen regardless of balance $1 or $100 will always exceed over 100%.

Your current creditors will soft pull inquiry you from time to time to review account and see if problems, it has been known that if one creditor has taken adverse action on you by closing or balance chasing, they can follow suit.

Re: No Idea what to do

Anonymous — Tue, 27 Nov 2018 16:19:03 GMT

To address the store cards, they’re not bad in and of themselves. But don’t just open a bunch of low limit cards and take the HP hits for nothing. If it’s a store you frequent and you’ll use it, fine. But don’t get a pile of worthless cards just to pad your percentages. Manage your accounts responsibly, pay down balances, and the scores will come.

Re: No Idea what to do

RonM21 — Tue, 27 Nov 2018 17:33:34 GMT

Welcome Mondoudou! As ImThe Devil just mentioned, there is no need to just open store cards. Open any card as you see fit for your profile and what you can handle.

All of the points made are great points 2 key points I see are the utilization and the derogs. Once you get your utilization down, you will see a steady rise in your scores. I know you are paying so much at a time, so this will take some time.

If you can get the GW letters to work on the derogs, that would be very beneficial to your scores if they are removed. Like most repairing of credit, patience is key, but it will come together for you if you keep on track.

Re: No Idea what to do

HeavenOhio — Tue, 27 Nov 2018 20:41:19 GMT

Don't use store cards as builder cards. Also note that the addition of any cards — either major or retail — will cause short-term score decreases. Adding a bunch will cause significant decreases.

@Anonymous, what cards do you have right now? What are their balances and limits? And when were they opened?

Re: No Idea what to do

Anonymous — Wed, 28 Nov 2018 22:41:57 GMT

@HeavenOhio wrote:
Don't use store cards as builder cards. Also note that the addition of any cards — either major or retail — will cause short-term score decreases. Adding a bunch will cause significant decreases.

@Anonymous, what cards do you have right now? What are their balances and limits? And when were they opened?

Here is what i have :

Discover - $1816/$3100 ( 7 years)

Capital One - $1627/$3000 (7 years)

Chase United - $4327/$5000 (Opened 5 years ago)

Chase Freedom - $0/$500 (4 years)

BOA - $1995/$2500 (2 years ago)

Dell Financial - $800/$2000 (2 years ago)

Nordstrom Car - $0/$2000 (6 mo)

Re: No Idea what to do

Anonymous — Thu, 29 Nov 2018 01:16:00 GMT

Fixing your scores (getting them to improve) is as simple as fixing your utilization. Looking at your list above, you have some major opportunities there. Once you take care of those balances, you'll be much happier with your FICO scores.