topic Re: How to Build a Good Credit Score in Understanding FICO® Scoring

How to Build a Good Credit Score

jacksonvillejaguar — Sun, 15 Apr 2012 03:27:03 GMT

I have the following credit cards :

Capital One Secured - $0 balance 2,200 limit

Capital One Platinum ( 1% cash back) - $700 balance 1,000 limit

As of 4/14/2012:

Equifax - 653

Transunion - 663

Experian - 670

Never made a late payment on my credit cards.

I don't charge on the secured card, and I pay the balance on the platinum card to about $100 or $50 dollars before my statement closes each month.

What can I do to improve my score?

Re: How to Build a Good Credit Score

Anonymous — Sun, 15 Apr 2012 04:56:08 GMT

You are running 70% on one of the cards. Get your utilization below 9% on all of your credit card limits. Most people say 0 balance on all but one card and one card with less than 10% utilization. Pay down that unsecured card to ~$180 balance, wait a few months and I bet your score will jump a bit. However there are many other factors that determine your score and w/o knowing more detail its hard to say how to greatly improve your score. Time, on-time payments, low utilization, few inquiries=great score.

Re: How to Build a Good Credit Score

Anonymous — Sun, 15 Apr 2012 13:08:38 GMT

It looks like you're doing everything you can with everything you have if you are already paying down the card to between 5%-10% each month.

It seems like you're fairly new in the world of credit, judging by what you have listed here.

Do you have baddies on your reports at this point? (late pays, collections, etc.)

Do you know what your Average Age of Accounts is? My guess is this is your biggest factor right now.

The issue you have has to do with your immediate goals: Are you going for a mortgage sometime soon or do you have a few years to build? If it's the latter, you might want to consider bringing more on so as to 1. diversify your credit and 2. get it now so that when you do want to app for mortgage or something else, your score will not dinged as much by your AAOA being determined by only 2 cards.

Again, credit goals are really determined by life goals and what you intend to do with credit. Joe Blow with a 550 across the board doesn't care if he's not planning on ever needing a good credit score.

Re: How to Build a Good Credit Score

llecs — Sun, 15 Apr 2012 15:05:25 GMT

OP, unless those 3 scores (if from the same source) came from a lender, then you don't have your FICO scores. I bring that up because there's always the possibility of higher FICOs. You might be in the 700 club right now. Who knows.

Re: How to Build a Good Credit Score

jacksonvillejaguar — Wed, 18 Apr 2012 00:40:11 GMT

Never made a late credit card payment. One of my credit card statement closes tonight and I have a balance of 0.89 . I do have some blemishes on my credit report such as a paid charge off, 1 paid collection , and one unpaid collection.

Re: How to Build a Good Credit Score

GregB — Wed, 18 Apr 2012 16:03:44 GMT

Refer to Ilecs' post above. It is almost certain that you have NO idea what your credit scores really are. WHAT credit scores are you pulling?

Also you are saying that you have a $700 balance on one CC but are paying before the statement cuts to a low amount? The only thing that matters is the balance being reported to the CRAs, which will be the statement balance for CapOne. If you run it up to $700 but pay it down to $100 before the statement cuts, that is 10% utilization.

Re: How to Build a Good Credit Score

jacksonvillejaguar — Thu, 19 Apr 2012 00:27:45 GMT

I got the scores from Equifax, and yes I pay my balance down before the statement closes. Cap 1 just increased my limt to 1,500 today as part of the step increase plan. Lately I have a balance on my credit card between $0 - $50. All my negative info should fall off between this year and 2013.

Re: How to Build a Good Credit Score

Anonymous — Thu, 19 Apr 2012 01:00:54 GMT

If it is showing a 700 dollar balance and you are paying balance down right before statement generates, then you need to doublecheck when Capital One reports to credit bureaus. Every lender is different. Do what you are doing now but get it to report small balance so you can see what your credit score is. Also, I understand for ideal FICO scoring, 3 revolving lines is ideal. Not sure if true, but I have seen some evidence indicating this.

Re: How to Build a Good Credit Score

aussiesareforever — Thu, 19 Apr 2012 01:02:08 GMT

@jacksonvillejaguar wrote:
I got the scores from Equifax, and yes I pay my balance down before the statement closes. Cap 1 just increased my limt to 1,500 today as part of the step increase plan. Lately I have a balance on my credit card between $0 - $50. All my negative info should fall off between this year and 2013.

Those scores are not FICOs, your true FICO score may be higher or lower. How long have you had your credit cards? Do you have any other loans (auto, mortgage). Improving your credit takes time. You may consider an additional revolving account with a company that will actally give you credit line increases- Discover, Amex or your local credit union. Naturally, you have a better chance of approval with no negatives but my hunch is that your FICOs are higher and because your baddies are old, you stand a good chance to be approved by a prime bank.

Re: How to Build a Good Credit Score

GregB — Thu, 19 Apr 2012 01:58:19 GMT

The scores from Equifax are not FICO scores and are not used by any lenders of any kind. They are only sold to consumers for "educational" purposes, pretty much a bad joke. Trying to improve those might help your real credit scores but can sometimes work in the other direction. You just can't rely on them except in very general term.

You can look at the reports to see what balance is reporting. Cap One reports the statement balance a day or two after the statement date and the CRAs update within a few days. VERY rare that they miss reporting.

If you think your info is updated with EQ, the most accurate real score available would be the EQ FICO you get here.

Re: How to Build a Good Credit Score

MarineVietVet — Thu, 19 Apr 2012 02:35:20 GMT

EQ sells both the FICO Beacon 5.0 sold here and their own proprietary (useless) "Equifax Credit Score" so you have to be very careful what you buy when you go there.

Equifax will still sell you a FICO score found here: www.equifax.com/web-myfico-products/

Re: How to Build a Good Credit Score

GregB — Thu, 19 Apr 2012 02:53:25 GMT

@MarineVietVet wrote:
EQ sells both the FICO Beacon 5.0 sold here and their own proprietary (useless) "Equifax Credit Score" so you have to be very careful what you buy when you go there.

Equifax will still sell you a FICO score found here: www.equifax.com/web-myfico-products/

Good point. It is possible to find the EQ FICO from Equifax but generally if you get all three "scores" you would end up with FAKOs. Seems like they make it hard to find.

Re: How to Build a Good Credit Score

MarineVietVet — Thu, 19 Apr 2012 03:05:00 GMT

@GregB wrote:

Good point. It is possible to find the EQ FICO from Equifax but generally if you get all three "scores" you would end up with FAKOs. Seems like they make it hard to find.

I agree. We need to constantly educate new members that there is no site that sells you all three FICO scores. Only a lender can pull all three at this time.

Re: How to Build a Good Credit Score

jacksonvillejaguar — Sat, 21 Apr 2012 00:09:21 GMT

So I ordered my FICO scores today from myFICO Equifax 628, TransUnion 661

Re: How to Build a Good Credit Score

GregB — Sat, 21 Apr 2012 02:19:10 GMT

Ouch, I must admit I expected your real FICO to be better than the FAKO scores that you had reported.

Now that you have real FICO reports, what are the items listed that are helping your score and the items listed that are hurting your score? These should be page 2 of your reports.If you only have one handy, lets start with the EQ FICO.

Re: How to Build a Good Credit Score

jacksonvillejaguar — Sat, 21 Apr 2012 13:22:12 GMT

Transunion

Hurting your score

1. Delinquency collections- 1 collection account that will fall off 8/12

2. Bad payment history

3. Seeking credit

4. Short account history

Helping your score

1. Low credit usage

2. Old collection

Equifax

Hurting your score

1. Delinquency collections- 1 collection account

2. Short account history

3. Recent missed payment

4. Bad payment history

Helping your score

1. Low credit usage

2. Recent credit card use

Re: How to Build a Good Credit Score

GregB — Wed, 25 Apr 2012 14:59:15 GMT

It is going to be hard to have a good score with the collection on there. It is #1 issue hurting your score on TU and EQ. I'm assuming it is the same collection and there is only one.

Interesting that the collection being old is helping TU but not on the list for EQ. That is an indication of the difference in the algorithm between the two versions. That is more likely to be because TU is using FICO 98 version and EQ is using FICO 04.

Sorry to say that the EQ FICO is probably more accurate for you. It will be much better when the collection falls off.

Re: How to Build a Good Credit Score

jacksonvillejaguar — Wed, 25 Apr 2012 18:59:35 GMT

It is a different collection for each report , Transunion will fall off this year(date assigned Dec. 2005.) Equifax is a bite tricky, I had an unpaid balance from Comcast cable that went to collections, I paid Comcast and have a zero balance but the collection agency is still on my report.

@GregB wrote:
It is going to be hard to have a good score with the collection on there. It is #1 issue hurting your score on TU and EQ. I'm assuming it is the same collection and there is only one.

Interesting that the collection being old is helping TU but not on the list for EQ. That is an indication of the difference in the algorithm between the two versions. That is more likely to be because TU is using FICO 98 version and EQ is using FICO 04.

Sorry to say that the EQ FICO is probably more accurate for you. It will be much better when the collection falls off.