Credit Advice Needed

[Anonymous]

Hello this is my first post ever on myfico. However, I do find myself reading other posts quite often. I am unsure where I should post this so I am going to do it here and apologize at the same time. I have been working on my credit for years now after going through a horrible divorce. I seem to be stuck at my current credit score though and can't seem to get it higher. Which I understand why right now it isn't going anywhere due to having two car payments. I have seen where people were able to raise their score in a matter of month though and I am curious how they can go from 620s or 630s to over 700 in 6 months or less. Is there something I am missing?

[Anonymous]

The biggest thing is to keep CC balances low, under 30% for each one. More if possible, or none at all. If you're Divorced, maybe you don't need to shell out 2 car payments? That's generally something for a 2 Income Family. Though I'm just guessing all this, since you did not provide any info about your situation. I

[thornback]

What else is going on with your reports? Any negative marks (late payments, charge offs, collections)?

What are your current FICO scores?

[SouthJamaica]

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@Anonymous wrote:

Hello this is my first post ever on myfico. However, I do find myself reading other posts quite often. I am unsure where I should post this so I am going to do it here and apologize at the same time. I have been working on my credit for years now after going through a horrible divorce. I seem to be stuck at my current credit score though and can't seem to get it higher. Which I understand why right now it isn't going anywhere due to having two car payments. I have seen where people were able to raise their score in a matter of month though and I am curious how they can go from 620s or 630s to over 700 in 6 months or less. Is there something I am missing?

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In order to give you advice on how to  improve your scores, we would need to know basically what you have. For loans we would need starting amount and present balance of each. For revolving accounts we would need to know credit limit and present reported balance of each.

[HeavenOhio]

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@Anonymous wrote:

The biggest thing is to keep CC balances low, under 30% for each one. More if possible, or none at all. If you're Divorced, maybe you don't need to shell out 2 car payments? That's generally something for a 2 Income Family. Though I'm just guessing all this, since you did not provide any info about your situation. I

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Just to clarify, "under 30%" means 28.9% or below. That's because 29.00000000001% rounds up to 30%, and you're no longer under 30%. Even better is 8.9% or below.

No credit card balances at all are going to ding you. One card should report a small balance. $5 is enough. You don't have to pay interest to have a balance on a card. The balance should come from charges posted after the previous statement has cut.

[Anonymous]

I am actually remarried now and at the time I bought the one car my spouse was working but then quit shortly after ..😳 Anyways, yes when I was going through my divorce I did fall behind. I had my Jcpenny card that I had since I was 18 never paid late before get charged off. I had a Wal-Mart card that went to collections that I later paid. I believe I had a one or two more that went to collections and I was late on my car payment several times during this time. I have since paid off those and was able to save my capital one card which I have been paying on time and actually have on auto pay for more than the min. I have paid all of my bills on time since this happened. Now these late payments I am ashamed to say did go on for close to a year. I would pay what I could. I just didn't expect to go from having two incomes to none and wiped out my savings trying to keep everything up while also moving to another state. After I got settled and back on my feet I did catch one of my capital one cards. The other one went to collections as the rest including my card I had for over 10 years. The first car loan I got around June 2017 started around 19k and is at 16k. The other one I got in Dec 2017 and was for around 19k as well. It is around 18k left. I do have several store cards my daughter uses and the other cards I got because they offered a 0 interest rate on items that I needed at the time. I had a firestone card that have me 6 months interest free on some repairs I needed for my vehicle several months before I traded it in And that is paid off in full before the 6 months. I pulled my credit on experian and it said my fico 8 was 613 😭 ugh. And my overall utilization is 52 % which is rather horrible I am sure. I also have 18 inquiries due to the car dealers pulling my credit like crazy. I guess I should just keep paying these and wait like I have been.

[HeavenOhio]

The loans aren't likely to be killing your scores. Just keep up with the payments.

You can gain quite a bit by addressing the card situation, though. With scores in the low 600s, you should aim to be at AZEO (all zero except one) as many months as possible. You can search the forum for lots of information on this technique. But the upshot is that you'd have a small positive balance reporting on one card, with the rest reporting zero.

The positive balance should be at least $5 but not a whole lot more. It should be on a major card (Visa, MasterCard, AMEX, or Discover) rather than a store card. Also, it should be on a card where you're the primary user rather than an authorized user, and it should have a limit under $34,000. Note that you don't have to pay interest to do AZEO. Your reported balance should come from new charges.

You can find out quite a bit more about AZEO by searching the forum. Or feel free to ask questions in this thread. The bottom line is that cards should only be used if their balances can be paid promptly. As your scores improve, AZEO will become less necessary. Eventually, you can simply concentrate on paying in full by the due date.

For your late payments and other derogatories, check out BBS's Saturation Technique thread for methods to get them removed.

Don't worry a lot about inquiries. After a year, FICO stops counting them against scoring. And after two years, they drop from your reports entirely. Also, if your auto inquiries are properly coded as auto, FICO would score them as a single inquiry per bureau for each loan.

[SouthJamaica]

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@Anonymous wrote:
I am actually remarried now and at the time I bought the one car my spouse was working but then quit shortly after ..😳 Anyways, yes when I was going through my divorce I did fall behind. I had my Jcpenny card that I had since I was 18 never paid late before get charged off. I had a Wal-Mart card that went to collections that I later paid. I believe I had a one or two more that went to collections and I was late on my car payment several times during this time. I have since paid off those and was able to save my capital one card which I have been paying on time and actually have on auto pay for more than the min. I have paid all of my bills on time since this happened. Now these late payments I am ashamed to say did go on for close to a year. I would pay what I could. I just didn't expect to go from having two incomes to none and wiped out my savings trying to keep everything up while also moving to another state. After I got settled and back on my feet I did catch one of my capital one cards. The other one went to collections as the rest including my card I had for over 10 years. The first car loan I got around June 2017 started around 19k and is at 16k. The other one I got in Dec 2017 and was for around 19k as well. It is around 18k left. I do have several store cards my daughter uses and the other cards I got because they offered a 0 interest rate on items that I needed at the time. I had a firestone card that have me 6 months interest free on some repairs I needed for my vehicle several months before I traded it in And that is paid off in full before the 6 months. I pulled my credit on experian and it said my fico 8 was 613 😭 ugh. And my overall utilization is 52 % which is rather horrible I am sure. I also have 18 inquiries due to the car dealers pulling my credit like crazy. I guess I should just keep paying these and wait like I have been.

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The best ways for you to improve your scores are:

(a) get as many reported balances on the credit cards as you can down to zero, except letting one report a small balance, and

(b) keep paying your installment loans down but not to zero

[Anonymous]

Okay well I will work on getting my cards paid off. Won't they close the accounts if I don't use them ?

[SouthJamaica]

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@Anonymous wrote:
Okay well I will work on getting my cards paid off. Won't they close the accounts if I don't use them ?

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You can use them as much as you like. Utilization is based on the reported balance which is almost always the statement balance. So if you make sure all but one of the cards are paid off before the statement cuts, and the other card reports a small balance (less than 28%), which you can then pay off... you'll be pretty much optimized.

As far as using a card so that the account won't be closed, if you use a card once every 3 months you'll be fine.