Help needed to raise FICO score

[Anonymous]

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@Anonymous wrote:

Hi,

I'm new to the forum and I really like it here. I love how people are really willing to help. I've got a question that most experts would probably be very familiar with.

My Equifax FICO score is currently 720. I have a mortgage, two credit cards, and an auto loan. I've never missed a payment, and my credit card revolving amount is always less than 9% of my total available credit, sometimes 1%.

Some banks/credit unions require a score of 760 to get the best interest rates. I have no idea of how I am going to raise my FICO score to something similar. My oldest account is about two and a half years old. I used the score simulator and the best advice that was given was to pay down my credit cards (which I've already been doing), and my score will be 720-750 in two years.

Is there absolutely no way to raise my credit score to what banks and financial institutions would see as a good score? If the simulator is correct, I can still be stuck at 720 after two years of doing the right thing. Is there anything I can do?

Thanks!

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HI WantitQuick,

A few quick questions:

What are your two current credit cards?

Do you report a balance on one or two of the cards?

When you pull your reports here at myfico.com, what reasons are given under "What's Hurting Your Credit?"

If you can answer those questions, we may be able to give you a few ideas on how to raise your already quite nice score.

[Angie225]

I have 2 installment loans on my report and 2 unpaid loans (1 is 5 years last activity and the other is 4 years last activity).  On the 2 installment loans, one is an car loan (2.5 years old) with $23,000 balance and a consolidated student loan with a balance of $57,000.  Approximately what percent can I pay down the car loan to see a significant change in credit score?  Also I was told on the 2 old unpaid debts that paying them off will drop my score significantly.  Is this true?

[Anonymous]

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@Angie225 wrote:

I have 2 installment loans on my report and 2 unpaid loans (1 is 5 years last activity and the other is 4 years last activity).  On the 2 installment loans, one is an car loan (2.5 years old) with $23,000 balance and a consolidated student loan with a balance of $57,000.  Approximately what percent can I pay down the car loan to see a significant change in credit score?  Also I was told on the 2 old unpaid debts that paying them off will drop my score significantly.  Is this true?

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Installment loans only have a small impact on FICO scoring. Paying down one or the other IMO will not generate any major FICO score changes. If you have revolving accounts with balances, paying them down would have a much better impact on your FICO scores.

The 2 old debts that are unpaid are they charged-off? Are they in collections? Are they judgements?

[Angie225]

I just recently opened one revolving account in November.  It is just a credit card with a very low limit.  I don't have any other revolving credit.  

The two accounts are both in collection.

Thanks for your help.

[haulingthescoreup]

Paying off a collection should not affect your scores. Collections go by the date of assignment (when they were sent to collections), not the DOLA (date of last activity.) Paying them would change the DOLA, but not the date of assignment, so no score change, although a monitoring service would probably send an alert for activity.

[Anonymous]

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@Angie225 wrote:

I just recently opened one revolving account in November.  It is just a credit card with a very low limit.  I don't have any other revolving credit.  

The two accounts are both in collection.

Thanks for your help.

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Which CC and how much is limit? Only reason ask is some report end of month and some report on statement date, limit is asked to determine how much of a balance to show on your reports.

Paying off a collection will have no change in your score. Paid or unpaid collections have no impact on scores the collection itself is what is hurting your score. Do you know what the SOL is for your state? How old are the collections? The approximate drop off date?