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Is there anything else I should be doing?

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Anonymous
Not applicable

Is there anything else I should be doing?

I have a FICO score of 709 from Equifax and I'm wondering if there is anything that I should be actively doing to increase this or if I should just sit back and let account age do all the work.

 

I currently have 2 credit cards, 1 auto loan and 1 student loan left. Are there any other types of accounts that I should be looking to open early in my credit lifetime in order to get them established early so that they have time to age before I need a good score for a mortgage or something else?

 

I just learned that having a high credit card utilization is a bad thing (here I thought I was supposed to be carrying a balance ><), so I will be paying those down first. After that I plan to pay off the student loan in full ($4k left). I think I will just let the auto loan run on it's monthly minimum payment schedule since it's a 0% loan (I assume there is no benefit to paying it off early, right?).

 

I only have a $3k limit on my two credit cards combined ($1k Capital One and $2k Amex), but as far as I know they don't allow you to request an increase so assume I just have to wait for them to increase that automatically?

 

Is there anything else that I should be doing at this point to increase my credit score? Thanks!

Message 1 of 10
9 REPLIES 9
JM-AM
Valued Contributor

Re: Is there anything else I should be doing?

 


@Anonymous wrote:

I have a FICO score of 709 from Equifax and I'm wondering if there is anything that I should be actively doing to increase this or if I should just sit back and let account age do all the work.

 

I currently have 2 credit cards, 1 auto loan and 1 student loan left. Are there any other types of accounts that I should be looking to open early in my credit lifetime in order to get them established early so that they have time to age before I need a good score for a mortgage or something else?

 

I just learned that having a high credit card utilization is a bad thing (here I thought I was supposed to be carrying a balance ><), so I will be paying those down first. After that I plan to pay off the student loan in full ($4k left). I think I will just let the auto loan run on it's monthly minimum payment schedule since it's a 0% loan (I assume there is no benefit to paying it off early, right?).

 

I only have a $3k limit on my two credit cards combined ($1k Capital One and $2k Amex), but as far as I know they don't allow you to request an increase so assume I just have to wait for them to increase that automatically?

 

Is there anything else that I should be doing at this point to increase my credit score? Thanks!


 

AMEX does give CLI, and CAP ONE sometimes gives CLI (they are stingy at times).

 

Paying off installment loans is not a major increase to FICO scoring. IMO I would pay down the UTIL on the balances of your CC's first with any additional funds then worry about the installment loans. 

 

Paying down the UTIL will give you a bigger increase to your FICO scores IME.

Good Luck
May all your dreams and wishes become a reality!
Message 2 of 10
Anonymous
Not applicable

Re: Is there anything else I should be doing?

So getting my score up into the 800s is just a matter of keeping a low utilization on my rotating credit balances (i.e. Credit Cards) and paying everything on time? Then I just have to sit back and let my accounts age and I should be golden?

 

What credit utilization percentage should I be aiming to maintain? I have read that anywhere between 1%-20% is optimal, but I saw a couple threads on here where people were speculating between numbers as small as 4% and 5%. Has anything been established on what the best numbers are and exactly how close to them you need to stay?

 

Thanks for the help!

Message 3 of 10
Anonymous
Not applicable

Re: Is there anything else I should be doing?

By the way, I just wanted to make sure that there aren't any other accounts that I should be looking to open. I saw on Credit Karma that they are recommending that you have 21+ Total Accounts and I only have 7. I couldn't find anything on here regarding that number though, so I'm wondering what effect total accounts actually has and whether I should really be looking to increase it beyond what I need.

Message 4 of 10
JM-AM
Valued Contributor

Re: Is there anything else I should be doing?

YMMV depending on your entire credit profile.

 

The best way to determine which way is best for you;

 

1. Pay all CC's to have a 0 balance except for 1 of them.

 

2. Pay the 1 CC you leave a balance on to report <9%. The following month have it only report 5% and repeat the process until you are down to 1%. See how it has affected your scores. 

 

Once your other cards have a 0 balance just use them for small purchase unless you gain rewards for certain types of purchases and PIF before they report to CRA's. 

Good Luck
May all your dreams and wishes become a reality!
Message 5 of 10
dizzier
Established Contributor

Re: Is there anything else I should be doing?

JM AM has given you good advice so far as to maintaining a positive credit profile, but I'll take a stab at the other part of your question.


In my opinion, it may be of some long term benefit to you to open 1 or 2 more CC accounts. The optimal range according my MyFICO is 3-4 cards. No more than two if those cards should report a balance at any given time, and that balance should be less than 9% of the credit limit (individually and collectively).You will take an initial hit for the inquiries, but overtime you will benefit.

 

Other than that, I think you are good. I would not recommend opening any other installment accounts until you actually need them (ie. new car, house, loan, etc.). Having too many installment accounts can drag your scores down a bit.

 

I'm going to disagree a little with JM AM. I agree that you should focus on paying down your CC debt first, but after that, I think you should aggressively pay down your installment accounts. FICO high achievers generally have paid their installment accounts down about 35% of the original principal.

 

By far, the most important aspects of your FICO scores are your utilization followed by a long and positive payment history. Baring that in mind, it is possible for you to get into the 800s without having a long history. I'm pretty close to 800 and my AAoA is 5 years and total history is 9 years. FICO high achievers have an AAoA of 6-12 years and their oldest account is about 19 years old.

 

Nevertheless, in order to get over 800, you need to take into account all the factors that affect your FICO score even if it's just worth a few points here or there. As it is you seem to be on the right track.

 

HTH

____________________
FICOs: (as of 12-10-08): EX 759 | (as of 01-24-10): EQ 794 TU 756 EX ? | (as of 3-17-11): EQ 794 TU 790 EX ?

Until Chase lowers my ridiculously high APR they can kiss my patootie! Their card has been retired to the sockdrawer. Smiley Mad
Message 6 of 10
Anonymous
Not applicable

Re: Is there anything else I should be doing?

Interesting, thanks Dizzler. What kind of credit cards would you recommend? I'm using the Amex Blue Card as my main card for all purchases due to it's high cashback percentage (1.25% on all purchases with 5% on Gas, Groceries and Pharmacy). Assuming I wouldn't use the two new cards except to keep them active (1 purchase every 3 months I think), does it matter at all what kind of cards I get?

 

By the way, when you talk about paying off "installment accounts" I assume that is referring to my student loan and auto loan? I already plan to pay off the student loan as soon as possible due to the interest, but I was planning to just pay the auto loan at the minimum required rate since it is interest free. Are you saying that there is a potential credit score benefit to paying off the auto loan faster as well? What does "down about 35% of the original principal" mean?

 

I am a bit perturbed by the fact that opening two new credit cards will lower the average age of my accounts by approximately 7 months, but if it will help me in the long run I suppose it is worth it. Assuming my math is right, I'd have to wait another 8 months to hit the 6 year AAoA if I opened two new accounts today (I'd get there on June, 2014 vs. October 2013). Do you think that is a decent trade-off to get the extra two accounts? I have no plans to get any big loans within that time period.

Message 7 of 10
haulingthescoreup
Moderator Emerita

Re: Is there anything else I should be doing?

 


@Anonymous wrote:

Interesting, thanks Dizzler. What kind of credit cards would you recommend? I'm using the Amex Blue Card as my main card for all purchases due to it's high cashback percentage (1.25% on all purchases with 5% on Gas, Groceries and Pharmacy). Assuming I wouldn't use the two new cards except to keep them active (1 purchase every 3 months I think), does it matter at all what kind of cards I get?

 

By the way, when you talk about paying off "installment accounts" I assume that is referring to my student loan and auto loan? I already plan to pay off the student loan as soon as possible due to the interest, but I was planning to just pay the auto loan at the minimum required rate since it is interest free. Are you saying that there is a potential credit score benefit to paying off the auto loan faster as well? What does "down about 35% of the original principal" mean?

 

I am a bit perturbed by the fact that opening two new credit cards will lower the average age of my accounts by approximately 7 months, but if it will help me in the long run I suppose it is worth it. Assuming my math is right, I'd have to wait another 8 months to hit the 6 year AAoA if I opened two new accounts today (I'd get there on June, 2014 vs. October 2013). Do you think that is a decent trade-off to get the extra two accounts? I have no plans to get any big loans within that time period.


 

This would be a great post to have over on the Credit Cards forum. We'll talk your ear off over there, lol. You could even copy/ paste your first and third paragraphs and start a new thread over there, mentioning that you only have one CC and you're trying to figure out which additional cards might be helpful.

 

Have you already run enough through the Blue Cash to hit the higher reward rates? Because they don't kick in until you've hit $6K, I think it is, and they're not retroactive.

 

As long as your AAoA stays at 5 years or above, I don't think you'll have a big score hit. But good for you for being aware of that.

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 8 of 10
Anonymous
Not applicable

Re: Is there anything else I should be doing?

I might just do that, thanks Hauling!

Message 9 of 10
dizzier
Established Contributor

Re: Is there anything else I should be doing?

 


@Anonymous wrote:

Interesting, thanks Dizzler. What kind of credit cards would you recommend? I'm using the Amex Blue Card as my main card for all purchases due to it's high cashback percentage (1.25% on all purchases with 5% on Gas, Groceries and Pharmacy). Assuming I wouldn't use the two new cards except to keep them active (1 purchase every 3 months I think), does it matter at all what kind of cards I get?

 

By the way, when you talk about paying off "installment accounts" I assume that is referring to my student loan and auto loan? I already plan to pay off the student loan as soon as possible due to the interest, but I was planning to just pay the auto loan at the minimum required rate since it is interest free. Are you saying that there is a potential credit score benefit to paying off the auto loan faster as well? What does "down about 35% of the original principal" mean?

 

I am a bit perturbed by the fact that opening two new credit cards will lower the average age of my accounts by approximately 7 months, but if it will help me in the long run I suppose it is worth it. Assuming my math is right, I'd have to wait another 8 months to hit the 6 year AAoA if I opened two new accounts today (I'd get there on June, 2014 vs. October 2013). Do you think that is a decent trade-off to get the extra two accounts? I have no plans to get any big loans within that time period.


The AMEX Blue Cash card is a nice one. I have a Blue Cash card myself, and it is also my primary use card.

 

 

Right now, I can't really recommend a card to you. I think you need to think about what you want out of a card before I could offer anything up. If you are just looking for cards to fill the slots then yeh, you could app for anything really (with no annual fee that is). I would suggest, however, that you look for cards that may be of some benefit to you in the future should you decide to give the AMEX card a break.

 

One consideration might be whether or not a lender is want to give high credit limits, auto credit limit increases, or low APRs. Another consideration might be better/different rewards benefits (as hauling said, you have to get to 6.5k in spending before the high rewards categories kick in for the Blue Cash card). There are also some cards that offer different perks such as concierge service, auto and purchase insurance, temporary card numbers for online transactions, no foreign transaction fees, cash advance fees, or balance transfer fee, etc. You might consider that as well. Another consideration might be to get a CC with a company you'd like to do business with in the future (mortgage, investments, auto loans) so that you can begin to build a relationship with them. Then there are types of lenders to consider, do you want a credit union, small bank, or major bank.

 

I could go on, but I think you get my point. If I were you, I'd try to figure out what I'm generally looking for in a card and then post a new thread in the credit card forum. In that post also include your most recent FICO scores and a quick run down of your credit profile. This will help folks over there give you the best info they can.

 

HTH

____________________
FICOs: (as of 12-10-08): EX 759 | (as of 01-24-10): EQ 794 TU 756 EX ? | (as of 3-17-11): EQ 794 TU 790 EX ?

Until Chase lowers my ridiculously high APR they can kiss my patootie! Their card has been retired to the sockdrawer. Smiley Mad
Message 10 of 10
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