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Raising my credit score HELP


Raising my credit score HELP

Hi All,


I am planning on going after a mortgage loan next spring (May 2018). So that gives me about 6 months to work on this credit. My current scores are:


Equifax - 620

Transunion - 690

Experian - 640


I'm looking for ways I can get these scores to 700s across the boards.


I currently have 2 credit cards:

Bank of America - $300 limit

Open Sky - $200 limit


Both cards are at 0 balance. I use them every now and then and pay the amount back. Any tips on how to properly use these cards for my credit to go up?


-I have student loans that are in deferment.

-I have a car loan that I pay $379 to.

-No collections.. although I have had some in the past that are paid off.

-Missed payments on my car that hurt my credit in the past. Im hoping those will fall off soon as I havent missed a payment in over 10 months.


Any help will be greatly appreciated. 


Message 1 of 6
Frequent Contributor

Re: Raising my credit score HELP

How much is the student loan balance?

When do you plan to begin paying them back?

Does your auto loan report to all 3 bureaus?

Do both credit cards report to all 3 bureaus?


Basically, you are on the right track and you should continue to see marked improvement as your most recent derogatory account action "ages" out.   While it technically takes a good 24 months to not impact your score as much it begins to hurt less and less once it's 12+ months in the past. 


The only other thing I'd recommend is to carry a balance of 1% of the limit of each card as the scoring algorithms generally allow you maximum scores when your card balance is 1% of the limit.   Believe it or not, carrying a small balance is better than carrying $0 balance.


Licensed NC Mortgage Loan Originator
Message 2 of 6
Community Leader
Super Contributor

Re: Raising my credit score HELP

To carry a balance is different from reporting a balance.  When your credit card produces a monthly statement, it will indicate what your balance was at that time.  That's the amount you owe.  It's also the amount that the CC issuer will report to the three bureaus.


Say that amount was $100.  Your card is reporting a balance of $100 for the month.  If you pay the full $100, then you owe no interest; this is called Paying In Full.  If you pay only $40, however, than the remaining $60 is carried over to the next statement cycle, and you will pay interest on that.


There is no scoring advantage ever to carrying a balance.


There is, however, a strong scoring advantage to having all your cards reporting $0 except one, with the remaining card reporting a fairly small positive balance.  (It should be at least $5 and can be larger, as long as your total utilization -- all credit limits from all cards combined -- is less than 8.99%.)

Message 3 of 6
Community Leader
Super Contributor

Re: Raising my credit score HELP

mjm8082 wrote:

Hi All,


-Missed payments on my car that hurt my credit in the past.   Im hoping those will fall off soon as I havent missed a payment in over 10 months.


A late payment will stay on your report for seven years.  If your lates are under a year old, they will not be falling off soon.  Because it sounds like there are some fundamental stuff about credit reports that you may not understand, you'd be well served by pulling your three reports and heading over to the rebuilding forum and hanging out with the folks there.


They may be able to suggest some techniques for getting your derogs removed early.

Message 4 of 6
Valued Contributor

Re: Raising my credit score HELP

Also, in addition to CGID great advice , you mention collections in the past that are paid. Are these still reporting? If so, that is holding down your score. Are these mortgage scores or Fico 8 or even worse Vantage from CK. Absolutely head on over to the rebuilding forum and learn all you can. Great folks there
Message 5 of 6
Frequent Contributor

Re: Raising my credit score HELP

As a mortgage loan originator i do quite a bit of Rapid Rescoring of credit reports for consumers and in many instances I've noticed that when a consumer "carries" a balance that is 1% of their credit limit vs. 0% that their credit score is higher when the algorithms scoring system is "re-applied". 


If this board (MyFico) is generally stating details of how Experian operates please understand that Equifax uses a Beacon scoring model and Trans Union utilizes the Classic 04 scoring model please don't forget that each algorithm has different variable that may carry more weight when it comes to you score. 


With that being said, the Rapid Rescoring and the algorithms that Equifax, Experian and Trans Union utilize are extremely complex and the results they provide (scores) are merely statistical analyses of the data "reported" to the bureaus at the time a report "score" is generated.   As a consumer, you don't really have any control over the amount the Creditor reports to the bureau if you the consumer spend $100 monthly and pay your balance in full monthly so that it will show a $0 balance. 


That data can be reported randomly or regularly--maybe it reports $100 balance or $0 balance.  To be honest, I don't know what they do and I make no claim as to when; but in my opinion and as I stated previously I've seen higher credit scores with a $10 balance on a card that has $1000 limit vs. a $0 balance or $100 balance--Your actual results may vary.   Therefore, that's why I've stated my claim and feel it's important to clarify.


Now with all due respect to Credit Guy in Dixie's response to my original comment please understand that OUR debate is merely just the "icing on the cake" where the Meat and Potatoes (as well as the cake) is that you the consumer are demonstrating a responsible history of managing your credit which is the behaviour of paying your bills regulary without fail on time every single month.   


Happy Home ownership and mortgage originations!


Licensed NC Mortgage Loan Originator
Message 6 of 6