topic Re: Interested in credit score improvement in Understanding FICO® Scoring

Interested in credit score improvement

Anonymous — Mon, 03 Dec 2018 22:01:57 GMT

Hi. From my understanding, if there are no negative items on a fico score, it'll increase 3 points per month...? I read this in a forum. If this correct, why is the system designed like that? Is the system designed to where people have to wait a year just to buy something big again? Pretty ridiculous to me. Was it like this before the war in the middle east? Was it like this before the world trade center was hit?

Re: Interested in credit score improvement

Anonymous — Mon, 03 Dec 2018 22:15:52 GMT

If it's in the internet tubes, it must be true.

Re: Interested in credit score improvement

RonM21 — Mon, 03 Dec 2018 22:46:24 GMT

@Anonymous wrote:
Hi. From my understanding, if there are no negative items on a fico score, it'll increase 3 points per month...? I read this in a forum. If this correct, why is the system designed like that? Is the system designed to where people have to wait a year just to buy something big again? Pretty ridiculous to me. Was it like this before the war in the middle east? Was it like this before the world trade center was hit?

Welcome @Anonymous. I'm not exactly sure where that info is coming from or how you are tying it to world events. But we would certainly be glad to help you on your subject of credit score improvement. Do you mind giving us your scores and any other info or related questions you may have? Thanks

Re: Interested in credit score improvement

HeavenOhio — Mon, 03 Dec 2018 22:47:10 GMT

Welcome, @Anonymous.

"Three points per month" is definitely inaccurate.

But FICO scores do increase as account ages and payment history increase. And yes, it's been that way since the events you mentioned. One of the scores still commonly in use precedes the turn of the millennium.

How much a score increases depends on one's profile. The best we can do is make an educated guess as to how much and how quickly it might go up.

Re: Interested in credit score improvement

Anonymous — Mon, 03 Dec 2018 22:51:40 GMT

RonM21,

I don't know you. Not sure why I would give personal information that easy on here, as people view these questions, comments...

What particular things/stuff are you asking for again??

Re: Interested in credit score improvement

RonM21 — Mon, 03 Dec 2018 23:03:15 GMT

@Anonymous wrote:
RonM21,

I don't know you. Not sure why I would give personal information that easy on here, as people view these questions, comments...
What particular things/stuff are you asking for again??

You do not have to provide any information about your credit scores or profile if you choose not to. When you ask a question, we ask for some of the information to best help you. Without more detailed info, all we can do is guess and give you general answers that may not be specific to your situation. If you would like, you can view the other threads in these forums to see how these conversations work. We are here to help.

Re: Interested in credit score improvement

Anonymous — Mon, 03 Dec 2018 23:07:59 GMT

Hi,

HeavenOhio, your reply seemed to be useful. I don't know how experienced you are with the FICO scoring system, but I do have a another question... Is it true that once a collections account is removed from a credit report a fico score can increase then decrease because of the collection account removal?

Re: Interested in credit score improvement

Anonymous — Mon, 03 Dec 2018 23:10:53 GMT

RonM21,

Ok... What information would you like to know to better help me?

Re: Interested in credit score improvement

RonM21 — Mon, 03 Dec 2018 23:19:55 GMT

@Anonymous wrote:
RonM21,

Ok... What information would you like to know to better help me?

Your subject mentioned you were interested in improving your credit scores. So, to help you with that we first have to gauge where you currently stand. Usually, we ask things like:

*What are your Fico Scores?

*Any Credit Cards?

*What's you Credit Card Utilization?

*Any Collections or other Negatives on your report?

*Any Installment loans?

Then, once we have some of that info, we can begin to evaluate your situation and give you some tips. You may not even know what some of the questions mean, and we would also help you with that. You give that info if and when you are comfortable and we would be glad to help you out. Thanks

Re: Interested in credit score improvement

Medic981 — Mon, 03 Dec 2018 23:22:51 GMT

@Anonymous wrote:
RonM21,

Ok... What information would you like to know to better help me?

As you can see by Ron's and my signature lines, we give out our information so that if we have a question others are easily able to help and answer.

If you know them your current FICO scores from EQ, TU, and EX

How many applications for credit have you made in the past 24 months and what CRA is reporting

The accounts that you have that are open and current, how much you owe and credit limit

How many CC accounts and/or installment accounts

The accounts that you have that are closed and in good standing

The accounts that have derogatory items listed whether open or closed (if you have any)

The accounts that are charged off or in collections (if any)

Any other relevant information that you think will help us answer your question.

Re: Interested in credit score improvement

RonM21 — Mon, 03 Dec 2018 23:31:15 GMT

Also to help answer your question about the Collections, if an account is removed your score usually should rise. This is because it was dragging your score down due to being a derogatory. The only occasion I can see (although more rare) the score decreasing after removal would be if somehow it was still an account being calculated towards a scoring category.

Like if it was a Credit Card that had a very high age to it, and also still counted towards your overall total credit and utilization, maybe it coming off would outweigh the normal point gain you would get, because that trade line contributed a lot of positive towards your score.

It may also depend on if there are other negatives or factors that still have an impact when the account is removed.

Re: Interested in credit score improvement

Anonymous — Mon, 03 Dec 2018 23:38:07 GMT

Hi,

Ok. Equifax:606 Transunion:624 Experian:599

Yes, I have credit cards. I have 4 credit cards. 1 of them is a store credit card. 1 of them has a big limit, and I recently paid a large portion of the balance off to help improve the credit utilization...

Credit Utilization is currently at 54%, according to Credit Karma.

I do have 4 open collections, 1 was recently paid off... it's still on the the report though... Also, I had one removed... when it was removed the credit score increased then decreased shortly after... Also, the one that was recently paid off might be removed sometime this month (December). I believe 1 past collection account is closed and was reported as "Charged Off" I believe that's considered as a "Negative", am I right?

I do have a loan... the amount is a little over 4,000... which is currently more than what the original amount of the loan was when I first opened the loan. The loan is like this because I post poned a couple payments on it...

Re: Interested in credit score improvement

RonM21 — Mon, 03 Dec 2018 23:54:45 GMT

@Anonymous wrote:
Hi,

Ok. Equifax:606 Transunion:624 Experian:599
Yes, I have credit cards. I have 4 credit cards. 1 of them is a store credit card. 1 of them has a big limit, and I recently paid a large portion of the balance off to help improve the credit utilization...
Credit Utilization is currently at 54%, according to Credit Karma.
I do have 4 open collections, 1 was recently paid off... it's still on the the report though... Also, I had one removed... when it was removed the credit score increased then decreased shortly after... Also, the one that was recently paid off might be removed sometime this month (December). I believe 1 past collection account is closed and was reported as "Charged Off" I believe that's considered as a "Negative", am I right?
I do have a loan... the amount is a little over 4,000... which is currently more than what the original amount of the loan was when I first opened the loan. The loan is like this because I post poned a couple payments on it...

Thanks for providing the info. The first recommendation I have for you is to work on getting your Credit Card utilization percentage down. If you were able to at least get that down to 28% or even under 9% (better) you would definitely see an uptick in your scores. Utilization is a key factor that contributes to your scores.

On your collections, any that are not paid off, if you can pay them off that would be great. Even though it is still on the report, future Lenders would see that you at least paid them. But more importantly, you want to see if you can PFD (pay for deletion). This involves either calling the collection agencies and seeing if they will agree to delete the collection by paying in full or settling at a certain amount. The other is a Goodwill Letter Gesture. This would be sending the agency a request in writing asking nicely for them to consider deleting the collection. Any collection that you can get off your report is a positive towards you scores.

Yes, "Charged Off" would be a negative.

The loan is under the category of Installment loans. This category like the Revolving Credit, has its own utilization percentage. Right now you are losing points because you are at 100% utilization. That number would need to start coming down for you to gain points in this area. Like the revolving credit utilization, the lower the percentage, the more points you gain.

One extra nugget to keep in mind for both revolving and installment utilization is that you do not want the percentage to drop to zero. You will usually lose some points when that happens. That is further down the road though.

Re: Interested in credit score improvement

NRB525 — Tue, 04 Dec 2018 01:42:37 GMT

OP it seems you have a number of negatives, baddies, in play here. The timing of them, when they may ultimately fall off your reports is the biggest facor on your scores.

The CK scores are Vantage, not FICO.

You may find it useful to read some of the articles on MyFICO to get an organized explanation of how scoring works. The questions and responses you see in these forums are helpful for specifics, but the articles may get a lot of questions answered.

Re: Interested in credit score improvement

Anonymous — Tue, 04 Dec 2018 00:05:09 GMT

Is there a place in the FICO website to find the installment loan percentage or even on Credit Karma?? I don't know what you mean by installment loan. All I know is that I have a loan active on my report.

To the super contributor who replied, yes, I'm aware FICO is way different than Credit Karma. I use Credit Karma because it gives more detailed information.

Re: Interested in credit score improvement

Anonymous — Tue, 04 Dec 2018 00:06:48 GMT

And you mean the intallment loan is at 100% because it's over the original amount borrowed?

Re: Interested in credit score improvement

Medic981 — Tue, 04 Dec 2018 00:06:52 GMT

@Anonymous wrote:
Is there a place in the FICO website to find the installment loan percentage or even on Credit Karma?? I don't know what you mean by installment loan. All I know is that I have a loan active on my report.
To the super contributor who replied, yes, I'm aware FICO is way different than Credit Karma. I use Credit Karma because it gives more detailed information.

An installment loan is a car, home, student, personal, share secured, or credit building loan.

Re: Interested in credit score improvement

Anonymous — Tue, 04 Dec 2018 00:16:27 GMT

Ok...

So, the car loan and personal loan are both hurting my scores...

Re: Interested in credit score improvement

Pikaboo-icu — Tue, 04 Dec 2018 00:39:13 GMT

@Anonymous wrote:
And you mean the intallment loan is at 100% because it's over the original amount borrowed?

Yes..

Credit Karma is good for looking at reports.

If the scores you gave are not true Fico (as CK is not) you may obtain your scores for $1 from here: https://www.creditchecktotal.com/homepage8

Just cancel before 7 days trial is up.

You're in good hands with the advisers that are helping you on this thread.

CHEERS

Re: Interested in credit score improvement

Anonymous — Tue, 04 Dec 2018 01:23:57 GMT

As Pikaboo mentions, Karma is awesome for pulling your reports. You can see fresh versions of them as often as once a week.

Karma's scores are worthless, however, because no CC issuer or lender will use them in making decisons about whether to approve you for a loan or card. Since they can vary a lot from FICO scores (which is what your lenders will likely use) they are best ignored.

Karma's summary page can be misleading for newcomers as well, since it will often imply that you have a perfect payment history when you do not, or give misleading information about your profile age. It's sometimes wrong about CC utilization as well.

But use it for pulling frequent reports and it is great.

I would not worry much about the amounts you owe on your loans. Some FICO models don't care about that at all. And for those models that do, the most points you could losing is about 35 (compared with having your loans open but with a small positive balance, which is when you get the biggest boost).

BTW, strictly speaking, the term in question is installment account, not installment loan. That's because all loans are paid in installments (i.e. all loans are installment accounts). There are, however, some installment accounts that are not loans, like an auto lease. The lease will be treated much like a loan, however.

When all of your CC debt is paid off (aside from a small amount on one card) you can begin thinking about paying down loans if you want. Paying down CC debt will improve your score much more than paying down loans.