How to increase my credit score? (seems impossible)

[Anonymous]

This is very helpfull thank you. What I have been doing is paying off the monthly balance on the card I actually use, usually $1,500 or so a month, whatever it says as the "statement balance generally" and keeping this card at $0, sometimes paying 2x a month or more with one being my minimum auto payment. My other card was inactive for a few years so I started putting small things on it and leaving like $200 on there and having it set up to auto pay $30/month. For the second card should I pay in full every month? I get lots of conflicting answers here.

[HeavenOhio]

To optimize your score, implement AZEO. That means to report a small balance on one card ($5, but not much more) on one card, with the rest reporting zero.

Note that AZEO won't actually help you "build" your credit. What AZEO does is prop up your score at a given point in time. With the score you've given us, you'll want to do this before applying for any new credit. "Building" your credit involves continuing to have a positive payment history and letting your accounts age.

Paying interest doesn't help you in any way. Call the company to whom you're paying interest, and ask them if they can give you instructions for paying your balance and resetting your grace period ASAP. Hopefully, they'll give you an amount you can pay that'll avoid trailing interest the following month. The amount would be your current balance plus any amount of interest you owe at the time you make the payment.

Otherwise, you'll need to pay to zero and wait for a small amount of (trailing) interest to post to the next month's statement. You'd pay that tiny amount of interest amount immediately. During this process, don't add any more charges to the card until you see a statement balance of zero.

[Anonymous]

Thanks for the reply. I am a bit confused by it though. I already know how to pay my balance, I do it online. Currently with real numbers there is $124.94 on my cap 1 card. Its set to autopay $50 on Nov 12. As for resetting the grace period is there any benefit to doing this? I avoid calling CC companies/banks like the plague. There is currently $594.97 on the card I use. I just paid $697 on 10/27 on this card, and the autopayment of $30 on 11/3. I went ahead and just paid it down to $0 just now. Should I go ahead and pay the Capital one down to $4.94? If that is the correct course of action what should I do from there? Even with paying 2-3x a month it is very difficult to keep a $0 balance on the card I use as I use it alot. 

[Anonymous]

You don't have to keep a $0 balance on a card that you want to report $0, you just need to make sure that it has a $0 balance at the time your statement cuts.

If your statement prints on the 20th of the month, pay the card to $0 on (say) the 17th.  If there are any pending charges at the time you make your payment, add those into your payment amount.  Then don't use the card again until the 21st.  Sure you can't use the card for 4 days, but you'll 100% report a $0 balance if that's your goal. 

[Anonymous]

You really need to order your other scores and full reports. Get the full free detailed annual report (someone posted the link in this thread I think). It’s actually the most comprehensive report you can get.

The reason I am stressing  you should get all 3 full reports is because something is not adding up. I don’t feel like you have the whole picture of your credit profile. People walk out of bankruptcy and get car loan. Based on the info you provided, you should not have been turned down. A higher interest rate...maybe...flat out denied? Not based on a few late payments. You said the car is $55K and you are putting $35K down. Well that a $20K car loan. That’s less than this new Hyundai I’m looking at. Banks give out those car loans like candy. And dealers? Omg they would kill to give out a loan were you are putting 64% down!

Unless you went to a local bank and they have very strict UW standards. (Like banks that don’t normally do car loans). You could miss every single payment on that car and get it repoed and the bank would still make money selling it at auction based on $35K down. Again sorry for repeating myself but a flat out denial is not making sense. Your other two scores might be in the tank.  Let us know what you find.

Also, don’t get the Rolex. High end watches use to be an ok purchase because they would hold value and even increase over time. That martlet is dew now. Buying a high end watch now is just like buying a car. Expect it to rapidly decrease in value over time.

*Edit* how much is your rent/mortgage. Another reason you could have been turned down is DTI ratio. After all your expenses what does you ability to pay look like. FICO score cannot help you there.

[HeavenOhio]

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@Anonymous wrote:

Thanks for the reply. I am a bit confused by it though. I already know how to pay my balance, I do it online. Currently with real numbers there is $124.94 on my cap 1 card. Its set to autopay $50 on Nov 12. As for resetting the grace period is there any benefit to doing this? I avoid calling CC companies/banks like the plague. There is currently $594.97 on the card I use. I just paid $697 on 10/27 on this card, and the autopayment of $30 on 11/3. I went ahead and just paid it down to $0 just now. Should I go ahead and pay the Capital one down to $4.94? If that is the correct course of action what should I do from there? Even with paying 2-3x a month it is very difficult to keep a $0 balance on the card I use as I use it alot. 

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Resetting the grace period makes interest stop. If you don't do this, you'll continue to pay interest on all of your new purchases.

If you've been revolving balances, you need to go through the above mentioned steps (either see a statement balance of zero or call in to try to speed things up). That sets you up to start paying in full and avoiding any further interest.

I think you're making your payment strategizing more complicated than you have to. Simply make sure one card is reporting a positive balance. The balance should be more than $5 because banks will forgive small balances and report zero. If your aim is AZEO, the balance on that card should be not much more than $5, say up to $25. Realistically, you can probably report up to 28.9% of that card's limit with either no or little change to your score in comparison to AZEO.

To get your desired positive balance, follow the same procedure that BBS outlines for reporting zero. Make a payment before statement cut time to bring your card to the balance you desire.

[Anonymous]

For the auto loan- I was declined by light stream auto for another toyota supra I was trying to finance at $55k with $30k being financed. They declined me so I scrapped that idea and decided it would be easier to be approved for a newer car.

 For my DTI my experian is showing 0% with me having around $9k/month in income and $0 in debt. For my Cards they are now showing 1% usage and were probably always under 15% over the last two years. I will pull my full reports and see if there is anything else I can find.

Our mortgage is completely in my girlfriends name as I was technically unemployed playing poker for a living when we bought the house. My cars are owned outright, and I have no monthly bills other than verizon and BGE.