Bringing my scores up to 760

[Bangs21]

I have been rebuilding my credit for almost 2 years, and finally seeing some improvements, thanks to this forum.

I am wanting to know how best I can raise my credit scroe to 760.  I am currently at 689 equifax 648 transunion and 669 experian not

sure it matters.I have 2 secured credit cards with 1500 cl, currently with a 1k balance. One manufactured home morgage which i owe roughly 30k. A car loan with a 5K balance, a 48k student loan,  and a 4K installment loan.  my income is 44k to 52k annualy.

I applied for refinancing my manufactured  and got decline. The underwriter has declined the request due to high debt as a percent of your credit limit and numerous recent account openings.  She referenced 7 new accounts opened in the last 12 months, and the mortgage opened in 11-2009 as a joint account, recent and lacking stability.  The exact statement was "We are sorry we could not be of better service to you at this time.  Your credit file has no derogatory information, such as lates, but in the recent credit crunch, the lenders are extremely tight.  Thank you for the opportunity to serve your needs."

I would like some insights on how i can increase my score to 700 and above.

Thanks in advance

Bangs

[Anonymous]

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@Bangs21 wrote:

I applied for refinancing my manufactured  and got decline. The underwriter has declined the request due to high debt as a percent of your credit limit and numerous recent account openings.  She referenced 7 new accounts opened in the last 12 months, and the mortgage opened in 11-2009 as a joint account, recent and lacking stability.  The exact statement was "We are sorry we could not be of better service to you at this time.  Your credit file has no derogatory information, such as lates, but in the recent credit crunch, the lenders are extremely tight.  Thank you for the opportunity to serve your needs."

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Are you asking for the purpose of the refi??

Because your primary reason for the denial was overextension of your own credit.  People tend to do this when they are gonna get hit with hard times financially.  It's a reg flag for defaulting.  THey may not want to lower your interest because your situation looks unstable right now and the higher monthly payments can give them a little more security in case of a default.  The difference may not help them enuf in dealing with a forclosure on the 30 grand but they definately won't go in the other direction and lable you less of a finiancial risk than you appear to be on paper.

The highlited never looks good when you are trying to close.

[Anonymous]

There are several things you can do to increase your score.

1. Keep paying everything on time all the time. Payment history is 35% of your score.

2. Get your utilization down as fast as possible. Utilization is 30% of your total score. Right now your overall utilization is 66% ($1,000/$1,500) which is pretty high. FICO scores overall utilization as well as individual utilization. Here are some benchmarks to shoot for when trying to tweak your score:

Total revolving and individual utilization > 0 and < 9%, the lower the better, and
Reporting a balance on less than half of your revolving TL's, and
Reporting a balance on half or less of all TL's.

Others recommend you let only one revolving account report a balance of 1-9% each month with the other CC's always showing a zero balance on the monthly statements. Try different methods to see what seems to work best for you. Remember that the percentage of usage that shows on your statement is what is scored and not how much you may have charged during the month. Then always pay any balance in full before the due date to avoid finance charges.

3. Stop applying for new credit. Inquiries stay on your reports for 2 years and only affect scoring for one year but as you have found out lenders can see them and that can make them nervous.

From a BK years ago to:
9/09 EX pulled by lender 802
3/10 EQ- 800
6/10 TU -772

You can do the same thing with hard work

Credit Scoring 101
Common Abbreviations
Frequently Requested Threads
Whats In Your FICO Score

[Bangs21]

I am asking for the purpose of improving my situation and my score.

[Anonymous]

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@Bangs21 wrote:

I am asking for the purpose of improving my situation and my score.

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Well i see now you have almost the exact same post in the mortgage section.  Your score will not help you in terms of the refi ... you got too many other issues going on for you to close.  But for sake of improving your fico then you can follow Marine's advice. 

You have to wait for your accounts to age and possibly need to pay down your student loan debt which carries an even higher balance than the mortgage.  What you need in order to attain the loan won't necessarily help you with your score and vice versa.

For the sake of asking how many years they give you to pay back the 30 grand?  What's the interest on the student loan??

These questions are for the sake of Debt to income.  What are your monthly payments on these plus the personal and the car loan.  Then you will get a better picture on whether DTI is an issue.  A quick way to do it yourself would be to add all  up the monthly payments from the personal/car loan/ mortgage loan and whatever have you with  the min monthly payments currently on the cc's and divide by (annual salary/12: this is your monthly gross) see what type of number you get and put it into a percentage ie multiply by 100 and see what you get.

Remember paying down installment loans will not improve your fico ... paying down your cc's will not dramatically decrease your debt to income unless you have really high balances.  That's why what you need to do to refi may not coincide with what you need to do to increase your score.

[Anonymous]

Hello marinevelvet,

I am new to the forum and as I was browsing the comments, your message caught my attention. I have just returned to the U.S. after living in Australia for the last ten years. I was very surprised that when I returned to the U.S. and tried to apply for a credit card, I was denied and told that I do not have a FICO score. Basically, I had fallen off the radar screen due to living abroad for so long.

The only way I could restart my credit was to apply for secured credit cards. Once those cards were reported to the credit bureaus, my credit score was on the radar screen again (Fico score of 780).   I have had to apply for credit cards to reestablish my credit, but it's a Catch-22, because just by applying for the cards has lowered my score to 725.   I'm hoping this is a short-term drop in my Fico score and that my score will rise again in a few months.

Marinevelvet, you mentioned about keeping a very low balance on the credit cards. I have been wondering about this. I keep the total and individual utilization to 10% or less. But should I keep a small balance on each card every month?

I usually pay off my credit cards at the end of each month to avoid finance charges. But would it be beneficial to keep a small amount (let's say $5 or $10) on each credit card balance to roll over to the following month?  Is this a good strategy to increase scores?

Thanks for your input!

[Anonymous]

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@Anonymous wrote:

Hello marinevelvet,

I am new to the forum and as I was browsing the comments, your message caught my attention. I have just returned to the U.S. after living in Australia for the last ten years. I was very surprised that when I returned to the U.S. and tried to apply for a credit card, I was denied and told that I do not have a FICO score. Basically, I had fallen off the radar screen due to living abroad for so long.

The only way I could restart my credit was to apply for secured credit cards. Once those cards were reported to the credit bureaus, my credit score was on the radar screen again (Fico score of 780).   I have had to apply for credit cards to reestablish my credit, but it's a Catch-22, because just by applying for the cards has lowered my score to 725.   I'm hoping this is a short-term drop in my Fico score and that my score will rise again in a few months.

Marinevelvet, you mentioned about keeping a very low balance on the credit cards. I have been wondering about this. I keep the total and individual utilization to 10% or less. But should I keep a small balance on each card every month?

I usually pay off my credit cards at the end of each month to avoid finance charges. But would it be beneficial to keep a small amount (let's say $5 or $10) on each credit card balance to roll over to the following month?  Is this a good strategy to increase scores?

Thanks for your input!

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Hello and welcome back to the states!

As I mentioned in my other post there are several different opinions as to how a person can best  try and increase/tweak their score. You may have to try different approaches for a few months and find what works best for you.

1. Some say only have one of your cards report a small balance (1-9% utilization) each month on your statement and pay in full before the due date to avoid interest. Any other cards you might have should always show a zero balance each month. That doesn't mean don't use them it just means make sure the balance is zeroed out before each statement posts.

2. Others suggest:

Total revolving and individual utilization > 0 and < 9%, the lower the better, and
Reporting a balance on less than half of your revolving TL's, and
Reporting a balance on half or less of all TL's.

In any case you never have to carry a balance of any kind forward from month to month.

Have I completely confused you?    I'm sure you'll get other advice and suggestions. IMO (In My Opinion) there is no one size fits all approach because everyone's situation is different.

From a BK years ago to:
9/09 EX pulled by lender 802
3/10 EQ- 800
6/10 TU -772

You can do the same thing with hard work

Credit Scoring 101
Common Abbreviations
Frequently Requested Threads
Whats In Your FICO Score

[vanillabean]

Welcome back, seabiscuit245. And welcome to the forums.

When you say that "I usually pay off my credit cards at the end of each month to avoid finance charges", which month are you referring to?

I assume it's neither a calender month nor the end of the statement cycle month. It's probably by the due date around 25 days after the end of the statement cycle.

I agree with what marinevietvet says, but I have fewer reservations. It may be that for some keeping one card's util at 1% and the rest of the cards at $0 is not optimal, but I have yet to hear they said so!

If instead a recommendation mentions an overall util of say 1%, you would want to make sure that the card having a balance has a util of no more than 9% (I prefer 1%).

Also, I fully agree when marinevietvet says that "That doesn't mean don't use them it just means make sure the balance is zeroed out before each statement posts."

It should be added that if you make a partial payment before the statement cut, you still have to make a payment of at least the minimum by the due date.

[Anonymous]

Thank you for your reply - it helps a lot.  I will try and do that!

[Anonymous]

Thank you for your response, marinevelvet.  It appears to work best by keeping a low balance on all my credit cards......my score has been slowly increasing.  Thanks again.