How to improve my credit score? Currently 720-730. Open another Credit card?

[Anonymous]

Hello,

I will just give a quick run down to help understand. I am a business owner and for the past 7+ years the business has been doing great. However when I started, it was a struggle, I had some late payments and didn't watch my credit. I have been 100% clean in over 7 years with no late payments and most stuff paid off early.

The downfall to being a business owner is my credit gets hit more often so that is always listed as a reason my score is lower. I can't really change this.

Reasons my score isn't higher:

- Too many inquiries

- Past late payments (even though it's been 7 years)

- 90% of credit used

- Revolving debt high

Currently I have 1 credit card with a $1,500 limit, two mortages totalng $330,000, a LOC at $60,000 and a car payment. The one mortage is a rental property. I pay $400 more each month on the LOC then the required interest payment. My score is 720-730 between the three scores.

Here is the question. It always shows I am using 90% of my credit and I think this is because I only have one credit card with such a small limit? I use that card each month and then pay it off. I just always avoided adding another card or increasing this one because of more inquiries on my score. But would another card or increased credit limit help to reduce that 90% of credit used? This of course is assuming I do not use the cards more that 50% of their limits. Right now with only a $1,500 limit I use 80-90% of it then pay it off but use it up again. It's not a lot of money to play with.

Any thoughts would help on my next step in increasing my score. Thank you.

[Anonymous]

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@Anonymous wrote:

Hello,

I will just give a quick run down to help understand. I am a business owner and for the past 7+ years the business has been doing great. However when I started, it was a struggle, I had some late payments and didn't watch my credit. I have been 100% clean in over 7 years with no late payments and most stuff paid off early.

The downfall to being a business owner is my credit gets hit more often so that is always listed as a reason my score is lower. I can't really change this.

Reasons my score isn't higher:

- Too many inquiries

- Past late payments (even though it's been 7 years)

- 90% of credit used

- Revolving debt high

Currently I have 1 credit card with a $1,500 limit, two mortages totalng $330,000, a LOC at $60,000 and a car payment. The one mortage is a rental property. I pay $400 more each month on the LOC then the required interest payment. My score is 720-730 between the three scores.

Here is the question. It always shows I am using 90% of my credit and I think this is because I only have one credit card with such a small limit? I use that card each month and then pay it off. I just always avoided adding another card or increasing this one because of more inquiries on my score. But would another card or increased credit limit help to reduce that 90% of credit used? This of course is assuming I do not use the cards more that 50% of their limits. Right now with only a $1,500 limit I use 80-90% of it then pay it off but use it up again. It's not a lot of money to play with.

Any thoughts would help on my next step in increasing my score. Thank you.

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First thing is to pull your credit reports and dispute directly with the company that Hard pulled your credit via Letter and have those removed

Second thing dispute all late payments on all 3 credit reports , 90% of the time if you have been a good member these will pop off.

Third I would double up on these loans especially this 400 rental property. 2 mortgages if you cannot afford 2 mortgages then sell one house. 

Keep your Utiliization below 5% for the next year and pay off your cards every month. This will guarantee a massive points increase. 

[Anonymous]

Hello,

Thanks for the reply. I will try disputing some of those. Can you dispute a hard charge even if you authorized it?

The mortgage isn't about affording. I can afford both mortages easily and just did that 8 months ago. The 2nd property is an investment property that is a rental. I pay extra on the LOC. I can add extra principal to the mortgages or double a payment on occasion, would this help as well?

Should my available credit be higher than $1,500?

[stellar]

I think you should request a CLI on the credit card you have and also apply for one or more credit cards that give high limits (and are useful to you).  Many people on myfico have lots of cards with huge limits in order to manage utilization.

[Anonymous]

Just out of curiosity, why is your credit being pulled so much? You can't dispute an inquiry that you've authorized...maybe just see what you can do to limit additional pulls. This only makes up10% of your score so I wouldn't focus as much on this aspect. I would definitely dispute your late payments. Being that they are 7 yrs old there is a good chance they will be removed. As this makes up 35% of your score I would focus on this first. As far as utilization goes this makes up 30% of your score and is also very important. While asking for a CLI and opening up new cards will both improve your total utilization I would suggest opening up 2 new cards that you are prequalified for and that have great benefits. Allow 2 cards to report a $0 balance each month. Use your 3rd card (preferably low interest, great rewards and a higher credit limit) for your business purchases. Instead of waiting for the statement to cut to pay off the card, pay most of it off a number of days before the statement cuts. Only allow 1-9% of your total credit limit to report. So, just as an example, if you are using your $1500 card only let $15 - $135 to report to the credit bureaus. Pay off the rest a number of days before the statement end date. As far as making additional payments I would focus on paying off whatever has the higher interest rate. Is seems you have a nice mix of credit so I don't think your hurting there. Good luck in whatever you decide.

[Anonymous]

I would wait on the CLI until you see what the new card limits will be. Your new credit line might be sufficient.