Fastest Way to Raise My Score

[Anonymous]

Can anyone give me advice on the fastest way to raise my score? Current Score 651. Lots of late payments, but from two years ago. One regular credit card which is paid off every month. 1 car payment (current and on time). One store credit card (0 balance). Students loans at $22,000. I can pay the car loan off or the student loans, but will this impact my score? Opening the store credit card over the holidays bumped my from 640 to 651.

Thank you to all that answer. 

[demo18c]

Can not really tell if your scores will dip or not if your car or student loan are paid off. May lose some because of the mix, BUT I would look at this from a financial stand point. Paying off either would free up money from your paycheck and put you in a better situation....ie beef up emergency funds, save for that vacation to the Islands.

Message Edited by demo18c on 01-08-2010 04:42 PM

[donkort]

I wish you luck in your pursuit of a higher FICO score.  The best healer is time.  The effect of the late payments will lessen over time.  LOL..I almost wish you had high credit card utilization.  Lowering utilization is probably the quickest way to increase your FICO score

Message Edited by donkort on 01-08-2010 05:00 PM

[Jazzzy]

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@Anonymous wrote:

Can anyone give me advice on the fastest way to raise my score? Current Score 651. Lots of late payments, but from two years ago. One regular credit card which is paid off every month. 1 car payment (current and on time). One store credit card (0 balance). Students loans at $22,000. I can pay the car loan off or the student loans, but will this impact my score? Opening the store credit card over the holidays bumped my from 640 to 651.

Thank you to all that answer. 

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Hi...and welcome to the forums.

If you are trying to boost your score a bit, one way to do it would be to continue to pay your credit card off each month, but go online and pay it before the statement cuts. I don't know which credit card you use, but it likely reports the statement balance to the credit bureau. FICO doesn't then take into account that you pay the full amount off. To maximize your FICO score, you need your statement to report a zero or tiny balance, so, you not only need to control your debt, you need to control how it reports. A large part of your FICO score is based on your credit utilization percentage...your debt divided by your credit limits. That is likely one reason your score went up when you got a new credit card. It lowered your utilization percentage.

If you want to go ahead and pay off either the car loan or the student loan...and if you have enough cash in an emergency fund...go ahead and do so. They are both installment loans, and if you pay one off, you still have the other reporting. I'd advise, however, never to "keep" a loan active just for your FICO score. Reduce debt if you have the ability to safely do so, and if it makes financial sense (interest rate) to do so.

As to your lates...they will have less and less impact over time. I'd advise you to do some reading on the Rebuilding Your Credit forum. It sounds as if you've come a long way already...and congratulations on that. One thing you may be able to do is to write goodwill letters to those creditors and ask if they would remove the late payments from your reports. Many creditors have done this, but some won't. It's worth a try. I'd say it depends upon how many lates you have. A few isolated lates are OK...I've got 3 myself. I just had a 60-day late (the only one I ever had) fall off my reports for being 7 years old, and I didn't get a score increase. It obviously was no longer impacting my score.

Also, are you getting your score through this site or through EQ or TU directly? Make sure the score you have is a true FICO score. There are lots of consumer scores out there, but many of them are not truly FICO scores, and that's what the banks look at.

[haulingthescoreup]

Your best guidance for your individual situation (and this is true for all of us, btw) is to look at your myFICO score reports for EQ and TU and read screen 2, where your negative factors are listed. These are the factors that are pulling down your scores, listed in order with the most damaging one first.

Put all your energy into the three or four negatives that are listed --GW'ing lates and so forth. For instance, I had a nasty string of lates ending in a 90-day on a store card handled by WFNNB. Turns out that once those lates are over 2 years old, they don't show on their internal screens, and they will stop reporting them to the CRA's if you call and ask nicely. This was huge for me, as it moved me out of the serious derog scoring bucket. (I think it helped that I didn't have any other lates with other banks within two years, either.)

btw, the positives that are listed are pretty much there for warm fuzzies, I'm afraid. They are actually the negatives that are affecting your scores the least, if that makes any sense. Think of a list of negatives, with the most serious at the top. The negatives on screen 2 are taken from the top of this list, and the positives are taken from the bottom of the list.


eta: to clarify, that bit about only showing for two years was referring to WFNNB accounts. It would be nice if this were true of all lenders, but alas, it's not.

Message Edited by haulingthescoreup on 01-09-2010 09:17 AM

[Anonymous]

If I had to choose between paying off my car loan or my student loans, I would choose my car loan.  The reasoning behind this is that the interest for your student loans can be written off for tax purposes.  Usually student loans are the LAST payment you want to pay off in a lump sum.