Advice wanted on how to increase FICO score

[Anonymous]

Hi All,

Current score is 690. It used to be higher but I got dinged for an unpaid medical bill for a small amount ($100). I never knew about the bill until it was sent to collection, at which point I paid it in full. I have disputed the item on all 3 reports, stating that the original creditor never provided written notice of a balance due, which they didnt.

Anyways, what I am hoping to get help on is which of my credit cards to close. I hear conflicting advice as to whether I should close newer accounts, accounts with low debt utilization, etc. Below is a snapshot of the cards I currently have. I do not have any other negative items on my reports and have no debt (cards are paid in full each month) other than an auto loan. 

I closed one card in 06/14 that had been open since 5/12. I closed another card in 03/11 that had been open since 11/09. 

Currently I have:

Citi card opened in 04/97 w/ credit limit of $13000 that I hardly ever use, maybe $25-$50 a month tops.

Citi card opened 08/10 w/ $4000 credit limit. Used to use it more but for past year it's about $300 a month.

Citi card opened 03/14 w/ $8500 credit limit. Main card that I use now, with average monthly of around $2500.

I have 2 business credit cards (I am self employed with an S corp) but they dont show up on my personal credit report from what I can tell so not including that info here. 

Any help would be greatly appreciated!

[Anonymous]

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@Anonymous wrote:

Hi All,

Current score is 690. It used to be higher but I got dinged for an unpaid medical bill for a small amount ($100). I never knew about the bill until it was sent to collection, at which point I paid it in full. I have disputed the item on all 3 reports, stating that the original creditor never provided written notice of a balance due, which they didnt.

Anyways, what I am hoping to get help on is which of my credit cards to close. I hear conflicting advice as to whether I should close newer accounts, accounts with low debt utilization, etc. Below is a snapshot of the cards I currently have. I do not have any other negative items on my reports and have no debt (cards are paid in full each month) other than an auto loan. 

I closed one card in 06/14 that had been open since 5/12. I closed another card in 03/11 that had been open since 11/09. 

Currently I have:

Citi card opened in 04/97 w/ credit limit of $13000 that I hardly ever use, maybe $25-$50 a month tops.

Citi card opened 08/10 w/ $4000 credit limit. Used to use it more but for past year it's about $300 a month.

Citi card opened 03/14 w/ $8500 credit limit. Main card that I use now, with average monthly of around $2500.

I have 2 business credit cards (I am self employed with an S corp) but they dont show up on my personal credit report from what I can tell so not including that info here. 

Any help would be greatly appreciated!

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You might want to visit the rebuilding forum to get an idea about the medical collection..  Other then that it's hard to see what more you can do.  Closing accounts won't change your score in any positive way

[Anonymous]

Thank you! Just went through and found out about GW letters and am sending one off to the CA today!

[jamie123]

DO NOT CLOSE ANY MORE CREDIT CARDS!

Closing credit cards will actually hurt your score in the long run. You need a MINIMUM of 3 open credit cards to be able to obtain the best FICO scores.

I would suggest that you open 1 new credit card per year until you have at least 5 credit cards. This will give you some insurance in case something should happen to one of your lenders and you lose a card or two. Banks could be bought or go bankrupt or have some other catastrophe happen that is totally out of your control and you lose an old account.

Ten percent of your credit score is based on AAoA. (Average Age of Accounts) You find your AAoA by adding up the age of each account and dividing that number by the number of accounts that you have. The higher that your AAoA is, the higher your credit score will be.

Another important factor is the age of your oldest account. A credit card is usually a person's oldest account. Not many people live in the same house for 20 years to have a mortgage that is twenty years old but it is very easy to keep a credit card open for twenty years. The more old accounts that you have the better. You can easily have 5 credit cards that are 10 years old so that when you get new credit down the road for say an auto loan, your AAoA will stay high when the new auto loan is added into your AAoA calculation.

You should also diversify your credit portfolio. All your credit cards are with Citi. If something should happen that sours your relationship with Citi and you lost the relationship, you will lose ALL your credit cards! That is not a fun place to be and it happens occasionally.

You should diversify your portfolio by selecting credit cards from 2 of the other so called prime banks which are:

AMEX

Bank of America

Chase

Discover

Wells Fargo

Citi is also a prime bank and belongs on that list but you already have plenty of cards with them.

[Anonymous]

thanks for the advice!