What is the problem?

[Anonymous]

Based on everything myFICO stated I should do, my score should be in the 700 area. However, my credit score remains in the 650's. It has been almost two years without a late (30day) payment, I have paid off all but $1,400.00 of the 12K I owed. In addition, there are no judgments, or other negative listings on my credit report. However a BK was removed in March (Wife broke her back and was bed ridden for over 4 years). Lastly, I have used credit score calculators; all of which state I should have a credit score in the low 700s. All to no avail. When I started this effort to improve my score, I was in the high 500s, low 600s.

We are advices to use our credit cards and then pay them off at the end of the month. As such, whenever I do, my score drops. An example, I booked a trip for the family, using a credit card, then paid it off within a month, my credit report again dropped about 10 points.

What is the problem, I am playing by the rules, and nothing.... Is it me; am I missing something? I hate to bring this up, but is it because of my name  or race?

Your thoughts?  

[cdtotten]

When you make these big charges on your credit cards, do you pay them off AFTER the statement cuts, or before the statement is generated?

If you pay after, more than likely your reported utilization is extremely high and keeping your score down.

[Anonymous]

Thank you for responding! I am paying them off within a week, or as soon as I see the credit card company has posted the amount on the web site.

[Anonymous]

One other thought:

I can't believe that some computer comes up with a number (credit score) based on the information we (the public) believe is used. I would offer that there are other factors, we are not aware of. To make my point, if 10 people input the same information, I am willing to bet that the same score will emerge. Rather, we would see several different scores.

[MarineVietVet]

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@Anonymous wrote:

Thank you for responding! I am paying them off within a week, or as soon as I see the credit card company has posted the amount on the web site.

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Hello and welcome to the forums.

For most cards whatever balance reports on the monthly statement it what is used to calculate utilization for the month. For example if you have a card with a CL (Credit Limit) of $1,000 and your reported balance is $750 then your utilization for the month will be 75% and that is very high. It doesn't matter if you pay in full afterwards. The reported utilization will still be 75% for the month.

The key is to time your payments during the month so that the reported balance is <9% of your CL. That percentage seems to help the most people although some report 1-3% works better for them and others perhaps 5%. You can play with the percentages over several months to see what helps you the most.

If you have more than one card then have only one of them report that <9% balance each month with any other cards reporting a zero balance. That doesn't mean you can't use them just make sure the balances on these other cards is down to zero several days before the statements post.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[Anonymous]

Marinevietvet,

Thank you for that information! I will look into that and see what works best. However, I still am left feeling that my score should be a bit higher.... 

[MarineVietVet]

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@Anonymous wrote:

Marinevietvet,

Thank you for that information! I will look into that and see what works best. However, I still am left feeling that my score should be a bit higher.... 

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It can be a frustrating experience there is no doubt about that. May I ask where you bought your scores? I ask because most sites on the web today will sell you "credit scores" but these are not based in FICO scoring formulas and are really worthless in knowing where you stand score wise.

What is you credit length history and AAoA (Average Age of Accounts)? Sometimes a thin file can only be fixed by father time.

You mentioned name and race as possibly being a factor. The following things are not considered when calculating a score:

• Your race, color, religion, national origin, sex and marital status.
  US law prohibits credit scoring from considering these facts, as well as any receipt of public assistance, or the exercise of any consumer right under the Consumer Credit Protection Act.
• Your age.
  Other types of scores may consider your age, but FICO scores don't.
• Your salary, occupation, title, employer, date employed or employment history.
  Lenders may consider this information, however, as may other types of scores.
• Where you live.
• Any interest rate being charged on a particular credit card or other account.
• Any items reported as child/family support obligations or rental agreements.
• Certain types of inquiries (requests for your credit report).
  The score does not count “consumer-initiated” inquiries – requests you have made for your credit report, in order to check it. It also does not count “promotional inquiries” – requests made by lenders in order to make you a “pre-approved” credit offer – or “administrative inquiries” – requests made by lenders to review your account with them. Requests that are marked as coming from employers are not counted either.
• Any information not found in your credit report.
• Any information that is not proven to be predictive of future credit performance.
• Whether or not you are participating in a credit counseling of any kind.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[Anonymous]

I bought my scores from MyFICO, including score watch. My history is about 10 years on the older card and less then a year on the newest one. Average age is about 5 years. Yes, you are correct, this is very frustrating!

As for my work, I have been with the same agency for over 16 years. I work as a "first responder" in New England.

As for other factors that should not be added to one's credit score that  US law prohibits; you and I both know the corporate world controls the government and frankly, they do what they want!  

[MarineVietVet]

When you look at your reports on page 2 there will be listings for factors that are helping and possibly hurting your score.

What are the negative factors listed?

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[Anonymous]

Hello, this is my first post here.  I'd like to share my own personal experience with rebuilding credit.

I had the same problem when I was rebuilding my credit.  It seemed no matter what I did, I couldn't get my score out of the mid 600 range up from 580s across the board.

I tried any and everything I read about increasing my score but to little or no avail.  From time to time I was able to get my score up in the 680 range just to have something come along and have it tumble again.

I did find that the 3 bureaus always had a different scores and different information between them.  Even more importantly thought I found that the score I got from them didn't always agree with a score I got from a bank or credit institution which was 20-30 points higher than the bureau scores.  So even while I was stuck in the mid 600s, it didn't keep me from rewarding myself with a $60k car (with $0 down) after an ugly, drawn out divorce.

The number one thing that did increase my credit score was getting rid of negative information such as collections and then waiting for any late payment info to expire which took 7 years.  I followed the advice about leaving the oldest credit account open while I paid off and closed the younger ones.  At one point I was paying off three credit cards without having established any new credit for a few years.  I took out a small personal loan to pay off the credit cards which boosted my from 640 to 690 where it stayed for a whole 6 months.  I paid the loan back in the 6 months only to have my score drop into the 650s.  That seemed to be my score range no matter what I did after that.

I bartered with collection agencies and banks to remove negative information from my report which helped but didn't help much.  I was told that the biggest thing keeping my score in the average range was that I had a long credit history with no mortgage.  I thought it odd that that would have such an adverse affect on my score but it made sense.  I also found that paying down a large debt without using it for purchases from time to time to reflect my credit-worthiness had a negative affect on my score as did making big dollar amount purchases.  Those would take your balances up a percentage causing the drop.

Now I'm creeping into the mid 700s which I'm proud after a long, ever uphill battle with rebuilding my credit.  The two biggest factors of my success are persistence and patience.  I know that doesn't make a strong case for your efforts, but it will pay off.

If only I had known what I know now and had the discipline and discretion I have when I was 18.