As a contribution to this thread, I add my own Forest Gump story, which is probably stupider than most, but stupid is as stupid does. Just 7 months ago, I first became aware of this thing called a “credit score,” and what it meant, and I gained my awareness through daily readings of this wonderful forum.
I wont belabor my history with too many details, but the salient facts are as follows. I approached the later part of 2005, after 26 years of flawless credit history, including numerous credit cards, car loans, and first and second mortgage loans, with not a single late payment of any kind, with a divorce proceeding. I did not even know or care what a FICO was, Gone from the former marital abode, and involved in divorce proceedings, I let three consecutive payments slip on one of my credit cards. Even though my combined % util on those cards had risen to 83%, it did not phase me in the least, since I had not exceeded my credit limit on any card, and would simply catch up when the old marital abode was sold, and divorce was final. Stupid me.
But then, aha, I stumbled into the myFico forum, and for the first time realized the damage I had done!
In December 2005, I looked up my FICO score for the first time in my 58 years of life. Now at Fico 599. They told we that was not very good. My three stupid prior late payments were now costing me about 100 of the 298 points (35%) assessed for payment history. OK, I thought, just bring all payments up to paying the monthly min., and being current, no harm, no foul. Then learned that no harm, no foul has a seven year statute of Fico limitations. Hmmm…But looking at myFico further, I realized that I now had no installment loans, so my type credit mix, which is 85 FICO points (10%) was now gone. I had only credit cards, with no mortgage or installment loans. My high 83% util was putting me in the position of losing most of the 256 (30% weight) points assessed under FICO.
So my novice kneejerk reaction was to just apply for a couple of more credit cards, increase my % util, and all would improve. Wrong! While I received two new cards, each cost me a hit in this strange category of “new credit iinquiries,” which would now stick with me like glue for another 12 months, at approx 10pts + per hit. . So myFico took another hit, but my knowledge increased. And the two cards I received had credit limits that would not even pay off my increased monthly beer bills!!!!
So here are the actions I took. It has worked for me, but maybe only because I AM WAS SO NAÏVE IN THE BEGINNING of this Fico game we play! I noticed a “collection account” on my credit report, from someone called “Incovision,”for a medical bill of which I had absolutely no knowledge. Credit reports can be kinda neat in seeing the predators who make claims. I challenged their claim, and it disappeared two months later. Fico bump. I then contacted the credit card company to which I owed the most, and they granted me an installment loan at an interest rate of half that I was paying on my credit card. I immediately used that to pay off over half of my existing credit card debt. At the same time, it gave me an installment loan that improved my “type credit” mix in this 10%, 85 point scoring category that I had never heard of before.
I became addicted to the “try”. Immediately therafter, I contacted the other credit card company where I had the “three consec.” lates (I had cancelled their card after paying them in full back in 2005), and told them that I would be willing to return as their customer if they agreed to reinstall this card, and to erase those “three consec” lates from my credit report. Much to my shock, they agreed!!!! Prior baddies went away, and credit limit went up.
I also have also, and probably most importantly, at least as it pertains to my credit score, given up many of my wild and costly orgies of self-indulgance and pumped all spare funds into paying down accounts, and not paying-up my vices…. My credit card % util is now at 14%, Sad but necessary sacrifice in the Fico game….. but as any Fico-holic brethren know, paying off debt is the surest way to increase Fico.
That has been my sojourn from a FICO 599 to a FICO 723 in about 7 months. Due primarily from what I have learned on this wonderful site, which has opened my eyes on how to play the credit game!!!! Knowing the name of the game, whatever one’s situation is, is the only way you can play the game.
Starting Score: EQ 773, TU 766
