topic Re: need help in improving my wife's score in Understanding FICO® Scoring

need help in improving my wife's score

shorttough — Fri, 21 Dec 2012 17:22:43 GMT

Hi,

she has the following accounts.

BOA 0 /1000

Capitalone 0/750

Capitalone AU 0/2000

Discover 0/9400

Zales (charge account) 1700/3500

Car Loan JOINT 17,114.00/23500

overall util 10.2%

Any room for improvement?

Re: need help in improving my wife's score

Shogun — Fri, 21 Dec 2012 17:48:07 GMT

What's her score now? What's her CR look like? Are there any baddies?

Re: need help in improving my wife's score

shorttough — Fri, 21 Dec 2012 17:51:43 GMT

I dont have her score. she has no late payements, no collections or anything, her oldest account is from February 2011.

So i added her as a AU, and so that her oldest account becomes 2007

Re: need help in improving my wife's score

vanillabean — Fri, 21 Dec 2012 17:55:47 GMT

The car loan is an installment loan and counts next to nothing towards your score. The charge account is generally not used for credit card utilization, but is still debt, so it helps to pay it down. The important part is to keep a small balance on one of the four revolving credit cards, as zero debt across these cards doesn't show responsible use of credit as far as the FICO score is concerned. That's about it.

Re: need help in improving my wife's score

shorttough — Fri, 21 Dec 2012 18:07:51 GMT

so the 9%-10% utilization of CC's, for the best FICO impact.. how can i achieve it? i have limited cash, beause of downpayment for mortgage.. and don't want to increase DTI by having balance on other cards, since this zales card min payment is only 25.00 a month. Also do this charge card have individual utilization calculations vs overall utilization?

Re: need help in improving my wife's score

vanillabean — Sat, 22 Dec 2012 05:08:58 GMT

If the charge card is not used for utilization, buy a cup of coffee using one of the four revolving cards, and your wife's utilization will move from 0% to a perfect 1%.

Re: need help in improving my wife's score

RobertEG — Fri, 21 Dec 2012 19:07:42 GMT

My take:

The Zales card is definately being included in calculation of % util, as it is the 10.2% being shown as the overall % util of the combined CL of $16,650.

That is a good overall % util. However, FICO scores both overall % util and the % util on individ revolving, and that one card is near 50%.

It is having some adverse impact, but is only one of five. FICO has never disclosed the relative weighting of overalll vs individ card utils in its scoring, so it is speculative as to the effect of that one card.

Ideally, each card should also be less than 10%, so improvement in util scoring would come about by paying that card down.

It represents future opportunity for quick score improvement, but unless she needs to app for new credit soon, it's kinda academic, as FICO only scores the currently reported utils.

The most significant factor, in my opinion, is low length of credit. Being added as an AU will provide improved length of credit, and thus possible score improvement, but AUs dont come without their own baggage.

Addition of the credit history of another in one's CR is helpful if used to app for credit that has a relatively low principal or revolv CL, as many of those creditors rely primarily on FICO score in their determinations. A great building tool. However, if apping for higher amts of credit, the creditor will most likely do a more thorough manual review. Seeing the credit history of another as a part of her risk score, they may wish to evaluate her score without that artificial score impact. They simply cannot do that, as they have no way of producing a score without that history.So it might discount the value of her score in their determination.

She has multiple revolving, and a mix of revolv and install. I dont see a screaming need for new accounts from a FICO perspective. And addted new accounts will, by definitiion, lower her AAoA even further, and also most likely have inquiries associated with their app process. I dont see need for new TLs as part of her rebuilding.

I see maturing of her accounts as the major factor, which only comes about with age.

Personally, I would be hesitant to add the account history of another to her score.

Re: need help in improving my wife's score

shorttough — Fri, 21 Dec 2012 19:27:02 GMT

Thank you Robert and everyone for your input. I am going to remove the AU after we close on the house, right now its crucial i keep the AU. I just signed her up for EQ Scorewatch here, the score is: 740.

Her negatives are:

You have a short credit history.

- Your oldest account was opened
5 Years, 2 Months ago

- Average age of your accounts
1 year

Her positives are:

You have no missed payments on your credit accounts.

You've limited the use of your available credit.

10%

You've shown recent use of credit cards.