topic Re: Seeking advice to help push score into the 7's and meet a few goals. in Understanding FICO® Scoring

Seeking advice to help push score into the 7's and meet a few goals.

Anonymous — Sat, 12 Jul 2014 17:02:34 GMT

Hello all, long time myfico user however, first time discovering it's message boards. Pleased to meet you.

I would like to ask for some help/advise on where I should go with my score next to push it into the 700's as well as how I can meet a few higher expectations I now have in life.

When I first pulled a report on myFico in 2008 my score was a measly 535, fresh out college student with no credit history, a lot of debt debt and and no 'real' job to show for it. Was a pretty hash relization. I basicly only used my cs when I needed to find out why I was denied everything. Years later I was able to pay what I needed to and start using my credit to work for me to an extent.

Currently I have 692 (TU) and a 688 (EU) and a 672 (EX) scores. Not great but, a huge chip off my shoulders from when I began. It seems my CS is still haunted a bit from my rough start and before I begin a few more big changes, I wanted some insight. The majority of my credit has been composed of student loans which have all been paid off but, one which WILL die next month.

Things hurting my score. Length of credit history (6years), few current account (4), high usage of revolving acts (1) , and 1 serious delequency (done in first year of credit, still 1 year, 2months until it drops off report.)

As of August I will be clearing out 2 more account by paying off 2 independent loans (7k job expenses and 3k student) this leaves me with really only 2 active accounts. (18k left on auto loan, and a $364.67 tab on a poor old credit card.)

I realize I have few accounts but, don't see much need in new account if they are not going to be anything more than filler. I look to purchase a home in about 2 years and currently rent a house. I pay for most thing via cash mostly becuase I tend to only get approved for cards with sub $1000 CLs which most of my purchases I'd like to use a CC on are mostly home improvement things. For instance the current balance on my card is paying off a french-door refrigerator I bought last month. And a suprise clutch/transmission in my old car before that. Essentially on the CC I max it out and pay it down. It is my "oh **bleep**" emergency card. With only a $1200 CL, I assume that is the reason I have "high usage of revolving accounts." This card is also my oldest active acount and the one I got into trouble with a 60+late day delequency the first year I opened it.

I hope I've provided enough information without booring you and rambling on. Thank you all in advance if you even bothered to read thus far. I look forward to your answers.

Re: Seeking advice to help push score into the 7's and meet a few goals.

jamie123 — Sat, 12 Jul 2014 17:47:22 GMT

Welcome to the forum!

Now, realize this: You have a misunderstanding of how credit and credit scores work. Regardless of what you learn from my one measly post here, you need to spend a few hours or days or weeks reading in these forums to get a better understanding of how credit and scores work. It is sometime counter-intuitive as to how most people think. You are not alone.

You are in a good place with your credit and will easily be able to take it into the 700s in the next year if you follow the advice found in these forums.

Learn this:

1. Credit cards are not filler. Credit cards will have the largest impact on your credit score throughout your lifetime. You need to maintain at least 3 longterm credit cards to achieve the highest credit scores. I would suggest having at least 5 active credit cards.

2. As you pay off your installment loans (Student loans, Auto loans and personal loans) your score will drop. Yes, drop! When you pay your last installment loan off you might lose 10 points on your credit score.

Okay, now we need a bit more detail about your situation to be able to give you accurate advice. When you read these forums you will always see that creditors are mentioned by name. That is because all creditors are not created equal and each one treats their customers a certain way. They each have their own policies when it comes to CLIs (Credit Line Increases) and approvals.

So...What's the name of the lender on your credit card?

Re: Seeking advice to help push score into the 7's and meet a few goals.

sportsguy83 — Sat, 12 Jul 2014 18:09:00 GMT

Welcome!

I have similar scores and am in a very similar (trying to get above 700) except I have five delinquencies (ugh!).

The lack of credit cards is hurting your score more than anything else. I would definitely get the utilization low (preferably under 5%). Then I would open up at least a couple new credit cards (that make sense for you and that you will use). The negative will hurt somewhat until it drops off your report but your more recent actions will have a bigger impact. To that end, having more accounts open with good payment history will have a positive impact on your score.

Re: Seeking advice to help push score into the 7's and meet a few goals.

ethan17debttackler — Sat, 12 Jul 2014 19:00:13 GMT

OP, congrats on coming a long way from 535! I too was in a similar situation out of college.

I would agree with what was said about exploring the threads in this forum. They have proven to be VERY helpful! Having said that, my recommendation for you:

- Keep on paying off your SL & other debts

- Keep your CC between 1-9% utilization every month, or PIF. (Personally, I use my CC to buy stuff I would ordinarily pay cash for, but then I either PIF or bring utilization down)

- Work to get baddies off via PFD &/or GW letters

There are more things you can do, but your CS will see a nice bump by tackling these 3. Btw, I've just experienced this myself as of late. In other words, I drink my own medicine....and it works!

- Oh, and once you tackle these on, you'll def need to have one more factor: Patience!!

Hang in there! If you stay the course, you may not have to wait as long as 2 years for the house.....

Re: Seeking advice to help push score into the 7's and meet a few goals.

Anonymous — Sat, 12 Jul 2014 19:00:28 GMT

@jamie123, thanks. When I said I didn't want more filler CC I ment ones with low limits, no benefits and fee's, which seem to be most I've encountered. It may be biased though due to my current and past standings.

I'm aware when I pay off it hurts my score similar to closing accounts. My primary Sallie-Mae student loan costed my 27 points (EQ) when I paid it off. I mentioned this not to brag but, to show that I'm aware my score will be taking a recent hit in the next month, and it will open up additional income to go to saving or whatever will be next financially.

My current lenders. Auto loan (Chase,) credit card (Bank Of America Signature Visa,) and the 2 loans that will drop are my secondary student (Dept of Ed/Sallie-Mae) and tool loan for work (MatcO Tools.)

@sportguy83, thanks and good luck on your own gardening!

Re: Seeking advice to help push score into the 7's and meet a few goals.

jamie123 — Sat, 12 Jul 2014 21:06:30 GMT

Okay, these are my suggestions:

1. If you've had the BoA CC for 6 years your CL should be much higher. BoA can be stingy with auto CLIs sometimes and your running up the card near the limit all the time certaintly didn't help. You need to get your next statement to report a balance of less than 10% of that card's CL. That means for you: Less than $120. That means you need to pay the balance down to less than $120 at least 3 days before the due date (Do not pay it to $0 ) and then not use the card for about 10 days. (You can use your other CCs during this time. Oops! You don't have any other cards! Starting to see the need for more cards?)

Seven days after the due date, call BoA and ask for a CLI to $5000. They should give it to you because of the account's age and your current good credit behavior. Even if you don't get the full $5000 they will counter offer you with the max they can give you at this time. Some banks, and I believe BoA is one of them, don't like to give more than double the current CL in a CLI. This will cost you a HP on your credit report but is well worth it. FYI: With some CC companies you should call and ask for a CLI every six months. BoA is one of those companies. BoA is a GREAT CC to have! It will grow with you for life! You could end up with a $50K CL on this card.

2. A week after you get your increase in the BoA CC (Hopefully your new CL will be reported by then.) you want to apply for 2 new credit cards preferably from a "prime" bank. IMHO these are the prime banks:

AMEX

Bank of America

Chase

Citi Bank

Discover

Wells Fargo

I would suggest applying for a Chase Freedom and a Discovet IT. Both cards fit well into your current credit profile and scores. You should easily be approved for both IMHO. Both of those cards have cash back programs with rotating catagories. Both are cards that will grow with you. You want to apply for these cards one after the other. Do the Chase first then the Discover.

You should then garden all these cards for six months and then ask for CLIs on all the cards. You want HIGH CLs that you don't come close to using. That will give you a high credit score.

At some point you really do need to app for an AMEX card. I would highly suggest apping for the AMEX Blue Cash Everyday this December. I give it a 50-50 chance of approval but it is well worth the risk. All it costs you is a hard pull.

Questions?

Re: Seeking advice to help push score into the 7's and meet a few goals.

Revelate — Mon, 14 Jul 2014 16:46:37 GMT

Welcome to the forums!

I do agree that 1 credit card is too few, I'd add another 2 if we're just talking FICO purposes, but what I would suggest is doing some quick monthly spending estimates on the back of a napkin, and post them over in the Credit Cards forum for tailored advice for you.

Sounds like you're a pretty easy approval for decent cards, but if you spend a lot in groceries it's a different card you want than if you eat out at restaurants all the time for example. Might as well see what's available that best matches your needs.

Re: Seeking advice to help push score into the 7's and meet a few goals.

Anonymous — Tue, 05 Aug 2014 23:03:28 GMT

Alrighty, paid down my BOA Signature Card ($1000 CL) down to $212. Did this 11 days prior the the end of the month, hoping it would favor August's score. After doing so I asked for a CLI (4 days ago on the 1st.) I did this over the phone and was rejected. The rep told me they couldn't say why specificlly and that they would be mailing me a letter with the reasoning or something in 8-12 days.

Anyways paid down my tool and student loans, both now carry a balance of <$400 each. One originally being for 6k and the other 20k... was hoping to pay them in full but, turbulance hit following a week after my original post eating up a lot of funds. Next month -sigh-

I seeing as paying down my BOA credit card has done nothing to my score (the new balance shows on the report but, physically did not change my score... I went ahead and applied for a few cards. I went with the Discover IT and Chase Freedom. I chose these over the other cards each offered as I didn't want a annual/yearly fee. I was instantly approved for the Discover, and the Chase cards though ATM have no idea when they will arrive or when I will get them. As of now there is no difference in my score other than 1 hard pull from discover. Hopeing for $5k or $3 on the discover. No clue on the Chase Freedom, I'm hoping it will be decent because I've been with the for an Auto loan which has gone perfectly for the past year and hopefully for the rest of the loans life.

Cliffs, score (TU, EQU) haven't moved. Hoping for an increase in the coming week with 2 new lines of credit reporting. Still need to figure out how to take advantage of the new card 0% offer, though honestly there isn't much I charge these days. Problems right?

Re: Seeking advice to help push score into the 7's and meet a few goals.

jamie123 — Wed, 06 Aug 2014 04:37:32 GMT

@Anonymous wrote:
Alrighty, paid down my BOA Signature Card ($1000 CL) down to $212. Did this 11 days prior the the end of the month, hoping it would favor August's score. After doing so I asked for a CLI (4 days ago on the 1st.) I did this over the phone and was rejected. The rep told me they couldn't say why specificlly and that they would be mailing me a letter with the reasoning or something in 8-12 days.

Anyways paid down my tool and student loans, both now carry a balance of <$400 each. One originally being for 6k and the other 20k... was hoping to pay them in full but, turbulance hit following a week after my original post eating up a lot of funds. Next month -sigh-

I seeing as paying down my BOA credit card has done nothing to my score (the new balance shows on the report but, physically did not change my score... I went ahead and applied for a few cards. I went with the Discover IT and Chase Freedom. I chose these over the other cards each offered as I didn't want a annual/yearly fee. I was instantly approved for the Discover, and the Chase cards though ATM have no idea when they will arrive or when I will get them. As of now there is no difference in my score other than 1 hard pull from discover. Hopeing for $5k or $3 on the discover. No clue on the Chase Freedom, I'm hoping it will be decent because I've been with the for an Auto loan which has gone perfectly for the past year and hopefully for the rest of the loans life.

Cliffs, score (TU, EQU) haven't moved. Hoping for an increase in the coming week with 2 new lines of credit reporting. Still need to figure out how to take advantage of the new card 0% offer, though honestly there isn't much I charge these days. Problems right?

Congratulations on the new cards! You did great! Discover IT and Chase Freedom are some really nice cards!

BoA can be such a PITA at times. See what I mean about them being stingy? Don't worry, as time goes on and your scores go up and you build more good history they should come around and start treating you right.

Now, just because you will have all this new credit doesn't mean you should use it much. You will get your highest scores when one card is reporting less than 10% of its CL and all the other cards are reporting $0. You only have to worry about your cards reporting that way the month BEFORE you plan on applying for NEW credit, otherwise use all your cards gently each month and keep the balances low so you build some good history.

You can charge some of your everyday purchases like gas and groceries to show activity on the cards. You don't want to spend money that you wouldn't already be spending just to show activity. Make sure to sign up for the rotating categories for extra discounts with both of those cards. I think Chase gives you 5% cash back on gas during the third quarter. (July, August and September) The categories change each quarter and you must sign up for them each quarter.

If you use the cards gently, pay on time or early and keep the balances low, your scores will start to rise every month.

You should have both cards in hand within a week. Discover seems to be really quick with some people receiving their cards in 3 or 4 days.

It would be nice if you stopped back to let us know why BoA denied your CLI and what credit lines Discover and Chase gave you. It helps us give more accurate advice to others.

You did awesome!

Re: Seeking advice to help push score into the 7's and meet a few goals.

Anonymous — Sat, 16 Aug 2014 20:50:45 GMT

BOA Declined for "High Account Volume Usage" and "Low Amount of Revolving Credit."

It was a generic letter that had those listed as the reasons, no further information of explanation was provided.

Discover It showed up a couple days later and they pulled my EU report and had it included with my card. There report showed 669 for my EU score (which when I pull it it show 688.) I can only assume it is because different scoring models or report calaculations. Anyways they matched the $1k CL I have on my Bank Of America Card. So far I've used the card for gas (which is 5% back this month) and payed it down only keeping a $10 tab on the card. I plan to do this for a few months before trying to get a CLI.

Not sure what happened to my Chase Card. I still haven't gotten my card or paperwork. All I've gotten was the approval message in my email inbox after I applied... I did double check my billing info and it is all correct. Not sure what happened. I spoke to the generic CC hotline they had and they said it could be up to 13 days before I receive the card and information and until I had the card, and activated it they couldn't give me anymore information.