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[Anonymous]

Hey guys, 

I screwed up. Back when I was 18 and got my first Capital One credit card. Was paying on time until 1 day completely forgot I had the card, and $15 went 30 days past due. Years down the road, got married, etc and credit is needed for mortgage. Income was good, thought I'd never need credit. Anyways, long story short my credit score of 540 wasn't going anywhere with a mortgage. Luckily based on my income the bank was able to make an exception on my credit score, and I was able to get the mortgage. But now I needed the score to go up. The only way I see that happening is having many accounts (therefore many monthly payments) that should bring the score up and hide the late payment. I started off with some secured credit cards (about 5 at 1.5k each) and within 3 months was able to bring the score up to 617. Heard auto loans were good, got one of those, score went up to 650's, within 6 months I was getting offers in the mail and getting approved for everything I applied. Discover IT, store cards, Chase, US Bank, Barclays, American Express Gold, etc. Anyways my score got as far as 717 but then went down to 687. I guess a lot of inquiries, but my utiliziation is always under 20%, 1 late payment from 3-4 years ago (the Capital One) and I'm stuck without going up. I think I have enough cards (24), 2 auto loans (1 mine and another cosigned for borther) and the mortgage. I am planning to refinance my home within a year and wondering how can I get my score the best it can be by then. 

Thanks all!

[OmarGB9]

Not sure there's a whole lot more you can do at this point besides continuing to pay on time and letting that late payment age and eventually fall off after 7 years. Once it falls off your scores should get a nice boost. Actual amount may vary, but it'll definitely help and of course look better on your CR. Also as your inquiries age they'll affect you less and less and after a year stop factoring in altogether. After 2 years they'll disappear completely.

[Thomas_Thumb]

The type and quantity of your existing loans certainly meets all aspects of a good credit mix ... so no need for new credit.

First, stabalize your situation by not acquiring more new credit. This will allow your inquiries to age and after a year they will stop affecting your score.

I think there is also a breakpoint at 6 months so it should boost your score once your most recent inquiry reaches 6 months. I am pretty sure inquiries are categorized in QTY groups for scoring. One possible example QTY: 0 = Excellent, 1-2 = good, 3-5 = average, 6-10 = fair, 11-20 = poor & over 20 very poor. Each drop to a lower QTY category should help score. Also, no new credit will allow age of your youngest account and your average age of accounts to increase. Increased age can boost score quite a bit

For a couple potential quick hit score boosts:

a) keep the number of cards reporting a non zero balance low. In your case I would suggest 3 or 4 reporting balances in a given month.

b) Get aggregate credit line utilization for your revolving CC accounts to under 10% from the current under 20%.

Lastly, if possible, pay down your existing auto installment loan balance. Not sure about breakpoints but less than 60% and less than 40% remaining are a couple benchmarks I use.

[Anonymous]

Hello Metrama.  Good luck for the future.  Omar's advice was very good.  If you are trying in the next year to raise your score, you should open no new accounts, even if they are pre-approved and will involve no inquiries.  Pay all your bills on time and when you get close to needing the important credit pull, make sure all your cards except one have a zero balance with the remaining card having a balance < 9% of that card's credit limit.

If you feel like getting some more advice, could you clarify for us when your oldest account was opened?  (That sounds like it was your Cap 1 card.)

One of the best things you could do in the next six months is spend a lot of time learning about how FICO scores work.  Because you did not understand that initially, you made some choices that have harmed your credit score and harmed the impression you will give a mortgage underwriter when he pulls your report ten months from now.  Opening 23 additional cards was a bad tactic (since all you wanted was a better short term score and a better ability to renogotiate your mortgage).

While it is true that having multiple credit cards is necessary for the long-term goal of having a very high FICO score, all multiple means is "three."  Opening more than three isn't bad, but it doesn't in itself help your score get higher, nor does it make a past late payment harder for FICO or an underwriter to see.  Your idea to have an installment loan and perhaps four nice credit cards was laudable.  Opening 20 beyond those simply caused your AAoA to continue to go down and to have lots of inquiries.  Furthermore, when an underwriter pulls your score, he will see someone who is frantically opening every CC he can lay his hands on, which is a behavior associated with people who may default on their debts. 

The best thing you can do is, as Omar says, pay all your bills and wait.  And definitely stop opening new accounts.

One thing that might benefit you is to print out your credit report, and go through every account and see whether it is classified as Consumer Finance.  It's possible that some of your new cards are classified that way.  If you really want to be sure, you could call the CC issuer and ask them as well.  Circle all your CF accounts and consider paying them off and closing them.  CF accounts are more of a harm than a help to one's score.  Not sure whether that will give you an immediate score boost but in the medium to long term it is worth doing.