Hi Everyone, I wanted to check with our experts here to understand the "What's Hurting Your Credit Score?" from credit reports. Is this a good indicator of what you need to improve your score?
Mine Says on Experian:
1.) Recent Collection or PR:
You have a recent public record and/or collection on your credit report.
Your most recent collection occurred
10 Months ago
this is for a collection from General Revenue that I was able to successfuly took care and will be deleted tomorrow August 1st. However, I still have 1 CA that is from 4/2010 and scheduled to be deleted for 4/2017. Anyway, was hoping that with the deletion tomorrow it will boost my score?
2) High Credit Usage:
You've made heavy use of your available revolving credit.
Ratio of your revolving balances to your credit limits
This one I have taken care of, I didnt know that Thrifty from PenFed reports and I just tested to move the $300 from it to the checking account on 6/29 and it reported to bureau on 6/30! Yikes! Well that's been done and taken care of, and I only gained over $7,000 credit line since then. I'm hoping getting this down to 4% will boost my score?
Your advice and thoughts are greatly appreciated!
Hey. I cant comment on the collections part of your post becasue i have not have had one reporting since i started to monitor my scores.
However i can speak from personal experience when it comes to overall utlization and tell you that i have seen significant score change across the board when reporting 1-9 percent total utlization versus when i let more report.
Also like you said the more you add credit then the more total credit you will have thus your overall utilization would drop. Just be careful with opening up alot of accounts at the same time as it will bring down your AAOA.
Questionable if you'll see a score increase from an 18% utilization dropping to low single-digit utilization. I dropped my utilization from 36% or so to 5% and at best saw 2-3 points gained across each bureau, where others with similar utilization % drops reported picking up 20-30 points. Definitely profile-specific.
If there are other derogs present on your reports when this drops off it will unlikely give you any significant score increase.
May may get no score increase or just a few points. Your most significant score increase comes when your very last baddie falls off.
Is this true even if the last baddies is almost 7 years old?
FICO 8: 1/1/16 / 12/30/2016 [EQ: 518/681] [TU:522/714] [EX: 535/689] TCL: $108K INQ: 138 between the 3 NO MO CARD FOR ME
I'm pretty sure that collections are viewed as major derogs, the same way a 90 or 120 day late payment would be viewed not a minor derog like a 30 or 60 day late. That said, major derogs from what I understand will hold back your score significantly for the full 7 years, where minor derogs ease up on their negative scoring impact after 2 years or so (even though they still impact it for the full 7 years). Others I'm sure can try to quantify this a bit more for you, but that's been my understanding.
Is this a good indicator of what you need to improve your score?
They're a handy starting point but not necessarily the only things you need to consider. Start with the standard factors and typical weighting when reviewing your reports.
Derogs (affect Payment History) and high revolving utilization (affects Amounts Owed) definitely have significant impacts which is why we always recommend addressing them first.
Anyway, was hoping that with the deletion tomorrow it will boost my score?
To some degree but not as much as having all derogs removed. You need to aim for clean reports. Having any derogs on your reports will typically drag you down even though their impacts tend to taper off over time. These are major red flags to creditors as they indicate that you've had issues with repaying your debts. Do whatever it takes to avoid incurring any in the future as it's not always possible to remove them and even when they can be removed it can be a lengthy and difficult process.