topic Re: Increasing Credit Score Quickly in Understanding FICO® Scoring

Increasing Credit Score Quickly

Anonymous — Fri, 05 Nov 2010 15:19:59 GMT

I am in the process of purchasing a house and when they ran my credit report it came back 2 points shy of getting me approved. I need to get my score raised 2 points ASAP. The analyzer is telling me to get a $500 secured credit card. Is this the right thing to do? How long will it take to report?

Re: Increasing Credit Score Quickly

llecs — Fri, 05 Nov 2010 15:25:41 GMT

Welcome to the forums!

Do you have any CCs reporting right now (either open, with or without a balance, or closed with a balance)?

Re: Increasing Credit Score Quickly

MarineVietVet — Fri, 05 Nov 2010 15:27:59 GMT

@Anonymous wrote:
I am in the process of purchasing a house and when they ran my credit report it came back 2 points shy of getting me approved. I need to get my score raised 2 points ASAP. The analyzer is telling me to get a $500 secured credit card. Is this the right thing to do? How long will it take to report?

Hello and welcome.

What analyzer gave you that advice? I'm just curious. Getting a new card might actually lower your score because of:

A new inquiry

New credit on your report

Possible lowering of your AAoA and credit length hostory

Do you have credit cards now and if so what is the utilization on them? Reducing revolving utilization is the fastest way to improve your score.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Re: Increasing Credit Score Quickly

Anonymous — Fri, 05 Nov 2010 15:33:18 GMT

I do not have any credit cards reporting at this time.

Re: Increasing Credit Score Quickly

Anonymous — Fri, 05 Nov 2010 15:34:28 GMT

The loan officer that I am working with told me the analyzer with their company told him this. I do not have any credit cards reporting at this time.

Re: Increasing Credit Score Quickly

Anonymous — Fri, 05 Nov 2010 15:53:22 GMT

FICO likes to see a credit card, and they like to see a bank revolving account; so you can do both with only one card.

If you don't have any cards or revolving accounts, opening your first will definitely give you a boost.

You can choose secured or unsecured as long as they report to all 3 credit bureaus.

Choosing a bank/national cc will yield a higher FICO score - by quite a bit.

There's actually a poll right now on the main page on builder/rebuilder cards - that may be helpful to you.

Your biggest challenge will be choosing a well-behaved card and getting it to report. They usually report when the first statement cuts, and that can be about a month or so.

Re: Increasing Credit Score Quickly

Anonymous — Fri, 05 Nov 2010 15:55:18 GMT

OP -

what are your current scores?

and

what's currently on your report? good accounts, bad accounts, oldest account, AAofA.....

If you could share some info, we might be able to give you some good ideas.

Re: Increasing Credit Score Quickly

MarineVietVet — Fri, 05 Nov 2010 15:59:55 GMT

I was beat out by beamMEup for most of what I was going to say but I will try to address your question as to how long it would take for a new card to report to the CRA's.

The new inquiry will show up very quickly (Of course) but after that it's hard to say. Your application will need to be processed and then the information sent along to the CRA's. It is generally not a quick process. How soon do you need your score to increase?

Re: Increasing Credit Score Quickly

Anonymous — Fri, 05 Nov 2010 16:16:27 GMT

My Equifax FICO score is 618. I have installment loans of $79,000 and zero balance for revolving accounts. Everything shows a positive status of paying as agreed. I had one collection show up on my report for $138 but it now has a status of paid.

Re: Increasing Credit Score Quickly

Anonymous — Fri, 05 Nov 2010 16:18:50 GMT

I really appreciate your advice. I need the score to increase ASAP. When I started the process for purchasing a home I had a FICO score of 653 but in one month it went down to 618. The only thing that I can find is a collection for $138 that was reported in late Sept. but then reported as paid less than 2 weeks later.

Re: Increasing Credit Score Quickly

MarineVietVet — Fri, 05 Nov 2010 16:30:53 GMT

@Anonymous wrote:
I really appreciate your advice. I need the score to increase ASAP. When I started the process for purchasing a home I had a FICO score of 653 but in one month it went down to 618. The only thing that I can find is a collection for $138 that was reported in late Sept. but then reported as paid less than 2 weeks later.

I'm pretty sure the recent collection is what dropped your score so much. There are ways to get that removed but it is generally not a quick process either.

I'm still a bit confused about credit cards. You say you have no CC's reporting but you also say you have zero balance for revolving accounts. Do you mean you have CC's but they have no balances or are you saying you have no CC's at all? I apologize for my confusion.

Re: Increasing Credit Score Quickly

Anonymous — Fri, 05 Nov 2010 16:33:50 GMT

I no longer have credit cards. (I'm the one being confusing, my apologies)

Re: Increasing Credit Score Quickly

Anonymous — Fri, 05 Nov 2010 16:40:58 GMT

IME CC's that have fees usually update to the CRA's the fastest as they already have a balance on them. So the statement is issued fairly quickly.

Not sure if this has been every one's experience but has been in mine.

Good Luck

Re: Increasing Credit Score Quickly

haulingthescoreup — Fri, 05 Nov 2010 16:44:32 GMT

@Anonymous wrote:
I no longer have credit cards. (I'm the one being confusing, my apologies)

Ouch, that's a score killer. Having open revolving history (revolving = CC's, lines of credit, etc.) is very important in FICO scoring. FICO scores are risk scores, meaning that they attempt to predict your risk of default on a credit product. Since revolving is so much easier to screw up than installment, you're given more points for open, clean revolving history.

If you're going for a mortgage right away, it's probably too late to fix this, as you aren't supposed to app for things within six months of the mortgage application. One option would be if you ever had an American Express card, one that actually came from AmEx, as opposed to a BofA AmEx or Citi AmEx or USAA AmEx etc. If you once had an AmEx card of any type, and you didn't "burn" them (had it charged-off, etc.), you can try to get another AmEx and it will show the year that the first one was opened, so it won't look like a new account. But of course, you'd have to be able to qualify for a card.

And this doesn't apply for cards from any other banks. Just American Express.

eta: I should have gone back and re-read screen one. Most of this is covered there. I'd say that since your loan originator is advising you to open a secured card, it would be worth following that advice. Otherwise, I don't see any way of getting your score up quickly.

Re: Increasing Credit Score Quickly

Anonymous — Fri, 05 Nov 2010 18:35:34 GMT

This is one of those cases where the impact on your score varies considerably based on what you already have in your credit mix - another one of those one size doesn't fit all thingies.

Folks with somewhat established credit often see a score hit when opening new accounts, thus the advice to avoid applications 6 months before app'ing for a mortgage.

Folks with no credit cards, and with no bank revolving accounts will see a significant score increase, and it is fine to app before a mortgage. In fact, it's beneficial as the score increase is to your advantage.

In this case, OP's biggest struggle is going to be his time frame. But app'ing for and opening a bank/national credit card is the right thing to do, and the sooner the better IMO. If you knew it would report today - then all would be well. OP's FICO would jump. Typically, we're seeing 20 point jumps for this scenario on these boards, and that is what DH and I both experienced as well.

On a slightly different note, DH and I surprised ourselves by refinancing last year - about a year before we planned to. We had just app'd for several cards (I think DH had four new cards, and I think I had 3). They were all on the reports and all one month old. Our scores were fine (we knew that) but I was concerned with our new accounts. Our loan officer went over our reports quite thoroughly - not a single eyebrow as much as twitched. However, we were (are) rebuilders and it was the right thing to do. Established folks have to take a different tack.

OP - what is your time frame? I hate to see you put in a last minute rush. What is your loan officer saying (btw - he/she doesn't seem very FICO savvy as is often the case) about timing?

ETA: And I hope Hauling's suggestion works out perfectly for you - if you have had an Amex, it would be a golden solution.

Re: Increasing Credit Score Quickly

Anonymous — Fri, 05 Nov 2010 18:45:18 GMT

I asked the loan officer to send me over the CIC report and my scores are Experian 642, Equifax 618 and TransUniom is 602 but reported an error detection. This is the reply I received,

"Credit came back at a 618, two points shy of getting you approved. According to our analyzer You can raise your score ~20 points on each bureau if you get a secured credit card with a $500 balance or unsecured card and charge only $10 on it. PNC, Commonwealth Bank, Bank of American, Orchard bank all offers these cards. Orchard bank will probably get you your card and report the fastest (call them for details). Once that is done, we will get you rescored, then submit your file to underwriting. Depending on how fast your card arrives, I would estimate the whole process taking 30-45 days. I am going to check with our credit vendor to see if they have any other options since we are so very close to a 620."

Unfortuantley, no AMEX for me.

Re: Increasing Credit Score Quickly

Anonymous — Fri, 05 Nov 2010 19:03:53 GMT

@Anonymous wrote:
I asked the loan officer to send me over the CIC report and my scores are Experian 642, Equifax 618 and TransUniom is 602 but reported an error detection. This is the reply I received,

"Credit came back at a 618, two points shy of getting you approved. According to our analyzer You can raise your score ~20 points on each bureau if you get a secured credit card with a $500 balance or unsecured card and charge only $10 on it. PNC, Commonwealth Bank, Bank of American, Orchard bank all offers these cards. Orchard bank will probably get you your card and report the fastest (call them for details). Once that is done, we will get you rescored, then submit your file to underwriting. Depending on how fast your card arrives, I would estimate the whole process taking 30-45 days. I am going to check with our credit vendor to see if they have any other options since we are so very close to a 620."
Unfortuantley, no AMEX for me.

Okay, that helps a lot.

I just posted this somewhere else, so it's fresh in my mind. I app'd for Orchard on 12/30/08 and I received my card fairly quickly. It reported on my CR's for the first time on 2/16/09. So that's about six weeks.

DH also app'd for Orchard on 12/30/08 and he received his card quite a bit later - sometime in February. It reported on his CR's for the first time on 3/13/09. So about ten weeks. We definitely didn't feel that his reported quickly.

However, we really liked Orchard as a rebuilder. Just very slow on the startup - especially for him.

DH app'd for BofA on 7/9/09 and it reported on his CR's on 7/24/09. About 15 days.

All of the above cards were unsecured.

Hope that's somewhat helpful.

Re: Increasing Credit Score Quickly

Anonymous — Fri, 05 Nov 2010 19:05:27 GMT

I really appreciate your assitance with all of this!

Re: Increasing Credit Score Quickly

Anonymous — Fri, 05 Nov 2010 19:39:59 GMT

Not sure if this would be reliable but worth trying.

Call the bank up that you want to apply to. Speak to some one and ask them if they know when they will report to the CRA's for your first statement if approved. If you are happy with what they say put your application in with them on the phone and apply. If not move to the next bank you are interested in applying with.

Re: Increasing Credit Score Quickly

MarineVietVet — Fri, 05 Nov 2010 20:22:46 GMT

I'm gone for a few hours and look what all happens!! It sounds like you are in good hands though. I can't think of anything to add.