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Best way to continue building?

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Best way to continue building?

DH and I have been together for 17 years and in that time have done some things to kill our credit, but have been rebuilding these last few years.  Now most of the negative items have fallen off our credit, all we're left with is CCs with a high utilization due to a job loss last year.  I've been working since the beginning of this year and we've paid off quite a bit and due to that, my utilization has gone way down but DH's CCs are still high as we have those left to pay down.  We've really changed our spending habits and have been very careful which is why we've been able to pay down what we have.  I was approved for a personal loan which will take care of our remaining balances of credit cards.  We have no prepayment penalty and can pay the $9000 loan off in 5 months.  We want to continue building up our scores - mine is between 679-685 and DH is between 653-670. Once the balances are down and reflect on our reports, we should see a nice increase in our scores.  We agreed that we are not using any credit cards for anything and put them away so we're not even tempted until this loan is completely paid off (and then we're still going to limit it but will work on earning the rewards that come with the CCs we have), but from what I understand, we should have at least some activity every month correct?  So if we set up auto pay on 2 bills to come out - 1 on each of our cards will that help? What should I do to make sure that it is reflected at the right time?  We're planning on buying a house in the next year to year and half and I really want to get our credit scores up and keep our balances down so we can buy the house we want and have more options.  Anything else we should be doing?  We have 2 car payments but once the loan is paid off, we're going to focus on paying my car off which only has $8800 left on it.  

In the garden until 10/2019
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2 REPLIES 2
Valued Contributor

Re: Best way to continue building?

 

Yes, to groom your credit scores to get them as high as they can possibly be you want 1 CC reporting a small balance of less than 10% of its credit line and all other CCs reporting a $0 balance.

 

If all your credit cards report a balance of $0 you will lose points. In my case I lose 18 points if all my CCs report $0 versus having one CC report a balance of $3. Yes, having one CC report a balance of just $3 earns me 18 points!


Starting Score: EQ 653 6/21/12
Current Score: EQ 817 7/10/19 - EX 802 7/13/19 - TU 815 6/03/19
Message 2 of 3
Community Leader
Senior Contributor

Re: Best way to continue building?

Are both cars in both of your names? If yes, paying off 1 of the installment loans is good. Paying off both (where you have no installment loan) will drop your scores astronomically.

 

If 1 car is in your name and the other in your husband's names, just remember that paying it off with no other type of installment loan can cause havoc on your scores.

 

Now, once you purchase a home, at least you'll have another installment loan.

 

Hopefully, an expert will drop by and offer more options.

 

GL to you.

GOALS: Garden til APR 2020 and 800 Club


SEP 2019: EX 791, TU 797, EQ 800
JUN 2019: EX 788, TU 794, EQ 779
DEC 2018: EX 777, TU 783, EQ 799

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