What is the best route for me to take so that my FICO score goes up to ~850?

[shniku]

Hello All,

I am trying to see what is the best route to take so that I can have a FICO score of ~850. So 

that it would be easier to understand where Istand, I will briefly describe my credit biography. 

Any advice would be greatly appreciated.

About four years ago, when I was 18, I started opening credit cards. To date, I have opened

14 credit cards. To date, only 8 of them are active. Out of the 6 that were closed, only 3 of them 

were closed by the grantor. The other 3, I closed myself, way before I knew that closing credit 

cards is a no-no.

These are all of my OPEN accounts:

Chase Credit Card              - $20,000 limit        - $ 0 balance

Chase Credit Card              - $900 limit             - $ 0 balance

CITI Credit Card                  - $1,800 limit          - $ 0 balance

CITI Credit Card                  - $1,700 limit          - $ 0 balance

PayPal Credit Card             - $3,550 limit          - $ 0 balance

AmEx Credit Card               - $500 limit             - $ 0 balance

Best Buy Store Card            - $2,000 limit          - $ 0 balance

Macy's Store Card               - $800 limit             - $ 0 balance

Total Limit:                               $31,250      

Total Revolving Utilization:      0% 

Chase Auto Loan                  - $2,625

Sallie Mae Student Loan      - $16,183

These are all of my CLOSED accounts:

Bank of America Credit Card     - Closed by grantor            - $4000 limit 

Bank of America Credit Card     - Closed by grantor            - $500 limit   

Chase Credit Card                     - Closed by grantor             - $500 limit 

AmEx Credit Card                      - Closed by me                   - limit not given

HSBC Credit Card                      - Closed by me                   - $500 limit

GEMB Credit Card                     - Closed by me                   - $450 limit

FICO Formula = 350+(P)175+(A)150+(L)75+(N)50+(T)50

P = Payment History

L = Length of Credit History

A = Amounts Owed 

N = New Credit

T = Types of Credit

This is what I think the variables are for me:

P = Payment History                 =  100%   (I was never late on payments)

L = Length of Credit History      =  ~20%   (average age = 2 years; oldest account = 4 years)

A = Amounts Owed                   =  100%   (Does the auto loan and the student loan count in this?)

N = New Credit                          =  ~50%   -just a guess

T = Types of Credit                    =  ~80%   -just a guess

My FICO Score = 350+(100%)175+(100%)150+(20%)75+(50%)50+(80%)50 = 755   (FICO ScoreWatch says my score is 756)

Message Edited by shniku on 02-14-2010 05:22 AM

[shniku]

In theory, I would beable to open 10,000 accounts now, so that any account I get in the future wouldbarely affect the Length of Credit History .This would lower the Length of Credit History to a minimum; however once it starts going up, opening new cards barely affectsthe length. The only thing that I would need to sacrifice are the 20%of 75 points that I currently have for Length of Credit History .
 
In practice one cannot open hundreds of cards in a short period of time, (unless you are Walter Cavanagh who has 1,496 credit cards).Trying to do so in this day and age would immediately make me look verysuspicious, and I will just get declined each time. Not only that, but they mayeven close my current accounts or do credit line decreases. 
 
Not opening any newcredit cards now can be quite dangerous as well. The Length of Credit History wouldgo down quite a bit if I open a new card in the future, since I only have 8cards. What's to say that I will even have 8? Maybe the banks would get meanand close all but 2 cards. Then if I open up a new card, it will remove 33% ofthe Length of Credit History . My father hadone card, and 14 years later, he opened another. It cut his Length of Credit History in half.
 
So to all you FICO Masters out there: What is the best route for me to take so that my FICOscore goes up to ~850?
 
My Other Questions: 
 
- What else besides "no missed payments" can affect the 175 points for Payment History ?
- How do you think the 75 points for Length of Credit History are calculated ?
- Does the auto loan and the student loan affect the 150 points for Amounts Owed ?
- How do you think the 50 points for New Credit are calculated ?

- How can I get all the 50 points for Types of Credit ? 

- How can I get my credit limits up the fastest way?

Message Edited by shniku on 02-14-2010 06:53 AM

[llecs]

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shniku wrote:

These are all of my OPEN accounts:

Chase Credit Card              - $20,000 limit        - $ 0 balance

Chase Credit Card              - $900 limit             - $ 0 balance

CITI Credit Card                  - $1,800 limit          - $ 0 balance

CITI Credit Card                  - $1,700 limit          - $ 0 balance

PayPal Credit Card             - $3,550 limit          - $ 0 balance

AmEx Credit Card               - $500 limit             - $ 0 balance

Best Buy Store Card            - $2,000 limit          - $ 0 balance

Macy's Store Card               - $800 limit             - $ 0 balance

Total Limit:                               $31,250      

Total Revolving Utilization:      0% 

---

You might see a few extra points added if you let one CC report a balance of under 9%, assuming that all of these are reporting $0 now. I don't know what that magic amount is for you. Could be 1%, 2%, a few bucks. Also, be sure to use each of your CCs (you can always PIF) every 3-4 months to avoid closure by the CCC.

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shniku wrote:

FICO Formula = 350+(P)175+(A)150+(L)75+(N)50+(T)50

My FICO Score = 350+(100%)175+(100%)150+(20%)75+(50%)50+(80%)50 = 755   (FICO ScoreWatch says my score is 756)

---

You can't calculate it that way though. While a coincidence, your formula doesn't account for scoring buckets. Scoring items, like AAoA, count more for some over others.

[llecs]

If your goal is to get to 850, then the best route is to open no accounts. Both open and closed accounts factor into AAoA. Closed accounts will continue to report for 10 yrs from when you closed it. Sometimes you get lucky and they continue reporting beyond that.

Your mix of credit is fine. Continue on the past you are on and I bet you'll hit 800 within the next few years if you don't open any new accounts and keep util in check.

[Jazzzy]

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shniku wrote:
In theory, I would beable to open 10,000 accounts now, so that any account I get in the future wouldbarely affect the Length of Credit History. Adding new accounts won't change your length of credit history. That number is based on your oldest reporting account, whether that account is open or closed. My length of credit history is currently based on an old BofA account that I opened in 1983 and closed in 2001.

This would lower the Length of Credit History to a minimum; however once it starts going up, opening new cards barely affectsthe length. The only thing that I would need to sacrifice are the 20%of 75 points that I currently have for Length of Credit History . I think what you may mean here (instead of length of credit history) is Average Age of Accounts (AAoA). You are right, that your AAoA will decrease each time you add a new account. This is always sort of a one-step-back, two-steps-forward process. A new account will negatively affect your AAoA, but, once those accounts age (and you keep them in good shape), they are golden.
 
In practice one cannot open hundreds of cards in a short period of time, (unless you are Walter Cavanagh who has 1,496 credit cards).Trying to do so in this day and age would immediately make me look verysuspicious, and I will just get declined each time. Not only that, but they mayeven close my current accounts or do credit line decreases. You are correct that opening a lot of accounts, at some point, adds nothing to your FICOs...and likely begins to hurt them. I currently have a red flag on my "number of accounts." I have school loans that keep transferring between lenders, so I'm up to 35 accounts (only 7 of those are ccs). The red flag tells me it is hurting my score. I think that, on average, myFICO tells you that FICO high achievers don't have all that many cards. And, in today's credit climate, you are correct that with lots of apps, you will start to be denied + have the possibility of harming your current accounts.
 
Not opening any newcredit cards now can be quite dangerous as well. The Length of Credit History wouldgo down quite a bit if I open a new card in the future, since I only have 8cards. What's to say that I will even have 8? Maybe the banks would get meanand close all but 2 cards. Then if I open up a new card, it will remove 33% ofthe Length of Credit History . My father hadone card, and 14 years later, he opened another. It cut his Length of Credit History in half. I understand your point about there being strength in numbers when it comes to your AAoA (not length of credit history). You may eventually have auto loans or mortgages that enter into your history as well. Remember, however, that your closed accounts will still count in that average for a long time.
 
So to all you FICO Masters out there: What is the best route for me to take so that my FICOscore goes up to ~850? What would I do? I would let your accounts age. Keep your perfect payment history. I would apply selectively for cards or other loans, maybe 1-2x per year. A score of ~850 is something that takes time. What I would NOT do is to open any type of account that could be considered "consumer finance." Be somewhat wary of your no-money-down-no-interest-for-a-long-time deals such as for furniture, etc. unless you know how it reports. For a credit mix, they are referring to revolving, installment, and mortgage. Don't however, sacrifice dollars for FICO score. A good FICO score is supposed to help us, not cost us. There may be times that you make a purchase or close a deal that could temporarily ding your FICO but makes sense to your wallet. That's OK.
 
My Other Questions: 
 
- What else besides "no missed payments" can affect the 175 points for Payment History ?
- How do you think the 75 points for Length of Credit History are calculated ?
- Does the auto loan and the student loan affect the 150 points for Amounts Owed ?
- How do you think the 50 points for New Credit are calculated ?

- How can I get all the 50 points for Types of Credit ? 

---

I can't really answer the rest of your questions because I don't know. The FICO formulas (and there are many different ones) are not something that we know.

You're on the right track. Don't be obsessed by it. Be patient...and good luck.

[smallfry]

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@llecs wrote:

If your goal is to get to 850, then the best route is to open no accounts. Both open and closed accounts factor into AAoA. Closed accounts will continue to report for 10 yrs from when you closed it. Sometimes you get lucky and they continue reporting beyond that.

Your mix of credit is fine. Continue on the past you are on and I bet you'll hit 800 within the next few years if you don't open any new accounts and keep util in check.

---

The best way to approach 820-850 is to stop applying for new accounts. AAofA is the number one killer that you cannot do a thing about but wait. High utilization can be cured by writing a check.

[shniku]

If I upgrade my Macy's card to a VISA card, would this make a new account, or just the same account with the ability to use it in other locations? I would like to do the same for the Best Buy card, and make it a MasterCard. 

For the Macy's card, I told the associate to put in the application for the Visa card, but she didn't think I would get it, so she just put for a regular card without me even knowing. I doubt there is anything I can do about that.  

[elaine829]

The macys visa is a new account. I dont have one but on another thread people wa saying that it reports as a another tradeline. I do have a macys store card.

[shniku]

I did some credit line increase requests online, and got three CLI's. Didn't bother with the Chase accounts. The other CITI said something like "You must have the account open for at least six months prior to requesting an increase." The account is at least two years old so don't know why it said that. I couldn't find the credit line increase request link anywhere on the Macy's site nor the AmEx site.  

These are all of my OPEN accounts:

Chase Credit Card              - $20,000 limit        

Chase Credit Card              - $900 limit            

CITI Credit Card                  - $1,800 limit      +1000  -----> $2,800  

CITI Credit Card                  - $1,700 limit         

PayPal Credit Card             - $3,550 limit       +750  ----->  $4,300

AmEx Credit Card               - $500 limit            

Best Buy Store Card            - $2,000 limit      +800  -----> 2,800    

Macy's Store Card               - $800 limit           

Total Limit:                               $31,250           ------> $33.800    (my goal is to get $2,000,000 as a total limit so any advice will help)

[haulingthescoreup]

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shniku wrote:

If I upgrade my Macy's card to a VISA card, would this make a new account, or just the same account with the ability to use it in other locations? I would like to do the same for the Best Buy card, and make it a MasterCard. 

For the Macy's card, I told the associate to put in the application for the Visa card, but she didn't think I would get it, so she just put for a regular card without me even knowing. I doubt there is anything I can do about that.  

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I'll let the Macy's crowd report on whether that switch to the Visa will cause a new TL to report.

As for the BB card, leave it as a store card. You'll get much higher CL's with the store version than the MC. Unlike most other store cards, this one is more valuable than the affiliation (store + bank) card.