topic Re: Ways to raise my credit score in General Credit Topics

Ways to raise my credit score

Anonymous — Wed, 25 Nov 2015 03:48:10 GMT

I currently have 3 credit cards,

1. Amazon store card, which I actually never ended up using. $800

2. Citbank 500 limit, $370 used

3. Wells Fargo student $800

My question is.

1. Should I use Amazon store card? will this help raise the credit score? I just use my citibank credit card for this

2. I am planning on paying back my debt of $370. Should I pay it all off? if not how much should I pay back ?

Re: Ways to raise my credit score

Anonymous — Wed, 25 Nov 2015 04:11:26 GMT

Hello and welcome to the forum. For ideal scoring, you should let a balance of 1 to 9% of the cl of any one of your cards post while the other 2 report a 0 balance.
Read the posts at the top of the general credit subforum and then feel free to come back with any questions. There are a lot of great people here with a substantial knowledge base that will help.
Again, welcome to the forum.

Re: Ways to raise my credit score

Anonymous — Wed, 25 Nov 2015 04:34:12 GMT

@Anonymous wrote:
I currently have 3 credit cards,

1. Amazon store card, which I actually never ended up using. $800
2. Citbank 500 limit, $370 used
3. Wells Fargo student $800

My question is.
1. Should I use Amazon store card? will this help raise the credit score? I just use my citibank credit card for this
2. I am planning on paying back my debt of $370. Should I pay it all off? if not how much should I pay back ?

(1) Yes. You should use it at least once, or it will eventually be cancelled. Find something you'd like on Amazon and buy it. Wait for the statement to cut and then after the statement, pay it in full. If you rarely want to buy anything on Amazon, try to find something small once every five months or so.

(2) Yes you should pay it off. Pay all of it it off. But then as you continue to make purchases on the card, allow those to post, wait till after the statement cuts, and then pay it in full.

Re: Ways to raise my credit score

ddemari — Wed, 25 Nov 2015 20:08:21 GMT

\gunminkim1990 wrote:

I currently have 3 credit cards,

1. Amazon store card, which I actually never ended up using. $800

2. Citbank 500 limit, $370 used

3. Wells Fargo student $800

My question is.

1. Should I use Amazon store card? will this help raise the credit score? I just use my citibank credit card for this

2. I am planning on paying back my debt of $370. Should I pay it all off? if not how much should I pay back ?

Let's add up all of your limits;800+500+800= $2,100.00. If you want to optimize your credit reports for FICO scorings best results you need to let only 1-6% utilization report. When you are starting out, it's better to try and do 1-3% in my experience.

For example, to see a quick rise in your FICO score, you can let around 125 dollars report across all of your cards. For the best results you should let 1-3% report on just one card and let the other cards show a 0 balance.

If I were you, I would pay off the Citi Bank as quick as possible, that card is about 74% utilized and is hurting your credit score more than likey. You want to stay under using 30% of your cards limit. If you can sucessfully get your Citi and Wells Fargo student Visa to report a 0 balance and charge say 25 dollars on Amazon, you will see a bump in your scores for sure. Pay down your cards and then use the amazon store card if that makes sense.

Let amazon store card statement but with a small balance of 25 dollars and the other 2 no balance to sum it all up haha.

Re: Ways to raise my credit score

CYBERSAM — Wed, 25 Nov 2015 20:21:11 GMT

Apply for QS or QS1. regardless of what the SL would be, use it heavy and pay it off. In 6 months you should have huge CL that is going to help your utilization.

You can also try Discover it. only if you had the other CCs for about 6 months or so.

Generally go for CCs that allow you to do CLI with SP that can grow, such as CapOne, Discover, AMEX etc...

Welcome to the forum.

Re: Ways to raise my credit score

Anonymous — Wed, 25 Nov 2015 20:25:03 GMT

Great advice thus far.

To our OP (gunminkim1990): Can you clarify for us what your credit needs might be in the next 2-3 years? For example, do you think you might be buying a house or a car at some point, and if so when?

The subject of this thread is Ways to raise my credit score -- but the kind of advice we give you will be very different if you are planning to close on a house in 90 days vs. wanting to know long term strategies aimed at steady improvement over four years.

Re: Ways to raise my credit score

Anonymous — Wed, 25 Nov 2015 20:37:43 GMT

Hello thank you all for great tips

I am currently 25, and probably just building to buy a car hopefully by early next year ? sooner the better

Re: Ways to raise my credit score

Anonymous — Wed, 25 Nov 2015 20:46:12 GMT

Good advice here. Good luck with your future car purchase. Welcome to the forum.

Re: Ways to raise my credit score

Anonymous — Wed, 25 Nov 2015 20:50:46 GMT

To our OP:

Do you have any open installment loans? (E.g. auto loans, student loans, personal loans, mortgage?)

Are you using any tool that gives you your credit scores? If so, what is the tool and what are your scores?

Re: Ways to raise my credit score

Anonymous — Wed, 25 Nov 2015 21:03:26 GMT

Currently I am not paying any loans, I am just using my credit card for daily expenses such as grocery, bus, books, etc

I am currently using CreditKarma to check the score, which I recently started doing so 2 days ago. Right now when I applied for WellsFargo card they said my credit was 694 but on CreditKarma they are saying its 640. I would like to get it to 700+ to try for a car loan

Re: Ways to raise my credit score

Anonymous — Wed, 25 Nov 2015 21:13:47 GMT

Very helpful, thanks! Sorry to be picky about words, but you said just now that you were currently not paying on any loans. If you were a student with loans in deferment, you might say that too. There's a particular score-raising strategy we can suggest, but it would not help you if you have any open installment loans of any kind, including student loans. Can you confirm that you have no open installment loans at all?

As far as the places you can get credit scores from, the ones you obtain from Credit Karma are fine, but they use an algorithm called Vantage Score which is not as widely used as the models made by FICO. I suggest you give Wells Fargo a shout and find out four things:

Is the score they gave you a FICO score?

Is it a FICO 8 score? If not what version?

Is it a "classic" version of the score or an "Auto Enhanced" version of the score?

What credit bureau did they use for the score?

Re: Ways to raise my credit score

Anonymous — Wed, 25 Nov 2015 21:24:11 GMT

As for student loans I am currently attending Local college right now..so im just paying it out of the pocket as I go.

As for the questions above I am really not sure lol Im sorry. I got a paper from wellsfargo saying My credit score is 694 and that its from TransUnion.

Date November 13th 2015.

Re: Ways to raise my credit score

Anonymous — Wed, 25 Nov 2015 22:29:29 GMT

OK. I am going to recap where we are, for my benefit and yours and anyone else reading.

YOUR BACKGROUND:

You are very new to the world of credit and credit scoring and don't know know much about it.

YOUR CREDIT PROFILE:

You have three credit cards. You easily have enough money to pay them off right now. You have a desire to do that, but want to make sure you are doing the thing that will help your score the most.

YOUR CREDIT GOALS:

* SHORT-TERM: You hope to buy a car very soon. February maybe? So in 2-3 months from now.

* You are not planning to buy a house in the next year or two. The car is the big thing dominating your vision, and after that general improvements in your score.

Does that sound right?

You asked two questions at the very beginning. I will repeat them here and tell you my answers again, which now that I know your full picture I still think are right. My answers are consistent with what you are hearing from other folks:

1. Should I use Amazon store card? will this help raise the credit score? I just use my citibank credit card for this.

Yes. You should use it at least once, or it will eventually be cancelled. Find something you'd like on Amazon and buy it. Wait for the statement to cut and then after the statement, pay it in full. If you rarely want to buy anything on Amazon, try to find something small once every five months or so.

2. I am planning on paying back my debt of $370. Should I pay it all off? if not how much should I pay back ?

Yes you should pay it off. Pay all of it it off. But then as you continue to make purchases on the card, allow those to post, wait till after the statement cuts, and then pay it in full.

Because you want to get your scores as high as possible in a very short time (by Feb), here is what you should do about credit cards:

* After you make the Amazon purchase, allow the statement to generate, and then pay the statement in full, you should stop making any purchases on the Amazon card so that it stays at $0.

* Pick either the Citi card or the Wells Fargo card as the one card you will use for the next 4-5 months. Keep the other card at $0.

* With the remaining card, make two payments each billing cycle. A week after the statement, pay the amount on the statement in full. This is called Paying In Full or PIF. A week before the statement, pay the balance down to a smallish amount. Maybe $10. This way you will be able to use your card as much as you want but also will make sure it is reporting a small positive value to the credit bureaus. This will help your credit score a lot.

* Do not open any more credit cards -- not until you are driving your new car (March at the earliest). This is important. If it seemed as though you might have been advised today to open more cards, this was only because people here didn't understand that you had a major car purchase coming up very soon.

No more inquiries:

It is likely that when you asked Wells Fargo for their advice about the loan purchase, they ran a formal "hard inquiry credit check." This damaged your credit score. Not by much, but probably a bit. At this point you want to minimze any further drops to your credit scores.

Credit Education:

The first commenter suggested that you spend a lot of time learning how credit and credit scores work, That person was right. You should spend a lot of time in the next week doing a lot of research on the web, using multiple reliable sources, about credit. You need to underrstand what the three credit bureaus are, what a credit report is, what a credit score is, what FICO is, etc.

You are already a member of Credit Karma. That's good. You can ignore their scores but you should be regularly pulling their reports so you can understand them backwards and forwards. You can get a TransUnion and Equifax report as often as once a week from Karma.

MyFICO:

Once your credit reports confirm that your CC balances are all the way you want they ($0, $0, and say $20) you should go to myFICO and get all your FICO scores. You will receive a lot of them... maybe 15 or more.

This should all be doable by New Years. My guess is that you will get some good news by fixing your CC balances.

Finally, there's one more thing that would benefit you, but it will take some extra time and effort to understand and implement. It is known here as the Share Secure Loan trick. It's optional at this point. The other stuff I mention is more important.

Let me know if that all makes sense.

Re: Ways to raise my credit score

Anonymous — Sat, 28 Nov 2015 16:16:50 GMT

wow! thanks so much for your credit card information, this really educated me alot, also Im sorry for late reply

I paid off my citibank card 3 days ago in full so thats a good start thats going for me. I havent used my amazon store card yet since synchrony bank wants me to send them my identification in mail... before making my first purchase.

Also when I am trying to get a car, where is best place to seek loans ?

Re: Ways to raise my credit score

Anonymous — Sat, 28 Nov 2015 17:41:44 GMT

Your question about auto loans is a good one. I encourage to repost it in the Auto Loans subforum.

Here is some advice up front.

* Use google to do a lot of research on How To Buy A Car and How To Pay For A Car. Read lots of articles on it.

* Consider strongly the option of buying a used car.

* Consider the idea of not using ANY of the suggested financing options promoted by an auto dealer. Lining up financing with a credit union in advance is likely to put you in a far stronger bargaining position.

* Work on getting your credit scores higher first. It should be possible to get off the record interest rate quotes from any lender WITHOUT giving them your social and doing a hard pull of your credit score. Hard pulls harm your score and right now you want every extra point. You will finally need to authorize a hard pull in the week before you buy a car, but do so after having settled on a lender and after you know your scores.

Re: Ways to raise my credit score

takeshi74 — Sat, 28 Nov 2015 20:43:56 GMT

@Anonymous wrote:
Right now when I applied for WellsFargo card they said my credit was 694 but on CreditKarma they are saying its 640.

You don't have just one score. There are many different scoring models used by creditors out there. See also the Understanding FICO Scoring subforum and its stickies for info on the FICO models used by creditors. On top of that there are 3 major CRA's. Typically for a scoring model you have a score with each CRA.

Credit Karma provides TU and EQ VantageScores. AFAIK, Wells Fargo does not use VantageScores.

Always consider the specific scoring model & CRA and the relevance of the combo for a given creditor. Keep in mind that auto lenders tend to use the auto scoring models.

Re: Ways to raise my credit score

Grafton88 — Sun, 29 Nov 2015 22:24:39 GMT

If you have never had a car loan you might want to get a short, six months, credit building loan. You put up X amount of dollars and they, say a credit union, gives you a check for that amount as a loan. Your interest rate is very low, you build some goodwill with the financial institution, and you have the money back in your pockets.

Try to get that one credit card paid down as you plan to do. Try to maintain it at under 9%. Use the Amazon card for a Christmas present.

Re: Ways to raise my credit score

Anonymous — Mon, 30 Nov 2015 00:21:52 GMT

Grafton's idea is good. It's what I was talking about earlier in this thread when I mentioned something called a Share Secure loan. The people who advocate SS loans on the forum tend to recomend a 4-5 year term, and they have a "trick" that enables you to pay very little interest and get the most FICO scoring bang for your buck.

If you plan to do the SS loan, you need to get advice on that very soon, since you want to buy a car in Feb/March. Basically you would need to learn about how the SS Loan trick works and obtain the loan all before Christmas. Of course, as I said earlier, you could just scrap the SS loan idea and focus on the other stuff: learning how credit scores work, getting your credit card balances posting right, etc.

Re: Ways to raise my credit score

MauiMan85297 — Thu, 03 Dec 2015 13:45:28 GMT

@Anonymous wrote:
wow! thanks so much for your credit card information, this really educated me alot, also Im sorry for late reply

I paid off my citibank card 3 days ago in full so thats a good start thats going for me. I havent used my amazon store card yet since synchrony bank wants me to send them my identification in mail... before making my first purchase.

Also when I am trying to get a car, where is best place to seek loans ?

When you do go for the auto loan and have no auto experience but have 3 tradelines it's best to go directly through the dealer as most dealers have pull and will fight for you to get approved through the car manufacturer, ie; Nissan (NMAC) Chevy (GMAC), etc. Also, these 2 auto lenders mentioned happen to be the 2 that tend to lend people with challenged credit (especially first time buyer program).