Improving score advice

[Anonymous]

Hello all, this is only my second post but I have been visiting this site for a couple years now and it has helped me tremendously. I was wondering what advice any community members have about improving my score. I am currently very happy with my credit profile, but I would like to set guidelines in place so that I can continue to improve. I just turned 21 and am about to finish college. I dream of starting my own business one day, so I would like to make sure I can secure a loan with great terms when I am ready to begin. Thank you in advance for your help!!

14 credit cards (5 store cards and 9 regular credit cards)

8 federal student loans (4 Sub & 4 UnSub totaling 28000 at an average interest rate of 4.5%; payments will begin in 12/2019)

1 paid personal loan from TD for 2000

AAoA: Roughly 2 years

Total CL of cards: 69000 (54000 on regular CC, 15000 on store CC

No lates/baddies

I will be free of CC debt by September, and I was just approved for an AMEX BCE that I will use primarily until 0% APR runs out in 12/2019.

[Anonymous]

Bump!

Also, would it be wise to close one or multiple store cards? I've read that store cards aren't looked at as favorably as regular ones so I was thinking about that.

[polaris2011]

OP, I think a few more details might help you get some answers. What are your scores? Where do you want them to be? When are you planning on starting your business? This year? 10 years from now? 

Personally, I would close the store cards, but that's my preference as I can't see any/much value in having them myself. Generally, my advice would be to continue paying everything on time and saving as much as you can. Good luck.

[Pikaboo-icu]

Welcome to My Fico! 

Agree with Polaris...

I would add that if you can pay some of the student loans down, it will help.

Just like CC's high uti on loans can hurt you, even if paid on time.

Good Luck!!

[Anonymous]

Store cards do not harm you in any FICO model, as far as anyone knows.  They do harm you in the non-FICO models used by the insurance industry.  If a given store card is much older than all your other cards, then I'd keep it open.  Otherwise my personal choice would be to close all store cards, given that you have 9 other cards besides the store ones -- unless of course that store crd gives you some huge advantage.  (For example, a person who buys thousands of dollars worth of stuff every year on a Target card -- the 5% cash back probably makes it worth it given the huge level of spending.)

The best thing you can do for your score is to resolve not to open any more cards for a very long time (several years).   Nine cards is more than enough.

And of course, pay off all your CC debt (including the 0% card) and develop a plan for how to never be in CC debt again, which will necessarily involve a budget that keeps your spending at under 70% of your monthly net income.  The remaining 30% can and should be placed in various kinds of savings.

[Anonymous]

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@Pikaboo-icu wrote:

Welcome to My Fico! 

I would add that if you can pay some of the student loans down, it will help.

Just like CC's high uti on loans can hurt you, even if paid on time.

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I like the advice of paying down your student loans.  There was some speculation a while back as to whether installment debt that was at 100% (or more) of your original loan amount could hurt you.  Thus there's no reason not to include as part of your plan getting each of your loans at < 98.9% of the original loan amount.  I have no evidence that this helps (compared with a student loan at > 99.9%) but might as well.

And then if there are certain loans that are high interest you could work to pay those down faster.

[Anonymous]

Of the 5 store cards I happen to use 2 often enough to justify keeping it. I will also keep a 3rd store card that has a 10k+ limit in order to help my utilization.

You all make a good point about the student loans. I think I am just used to trying to improve my credit in ways that do not involve spending money hahaha. But I guess it doesn't hurt at all to make a small payment on each of my loans.

Thank you all very much!

[Anonymous]

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@Anonymous

Bump!

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Welcome to the forum.  As a piece of general advice, it's ill-advised to bump your own threads, especially when it's only been a short time since you started it, about 4 hours in this case.  The mods may give you a pass or two, but it's something they'll definitely address if it's continued. 

[SouthJamaica]

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@Anonymous wrote:

Hello all, this is only my second post but I have been visiting this site for a couple years now and it has helped me tremendously. I was wondering what advice any community members have about improving my score. I am currently very happy with my credit profile, but I would like to set guidelines in place so that I can continue to improve. I just turned 21 and am about to finish college. I dream of starting my own business one day, so I would like to make sure I can secure a loan with great terms when I am ready to begin. Thank you in advance for your help!!

14 credit cards (5 store cards and 9 regular credit cards)

8 federal student loans (4 Sub & 4 UnSub totaling 28000 at an average interest rate of 4.5%; payments will begin in 12/2019)

1 paid personal loan from TD for 2000

AAoA: Roughly 2 years

Total CL of cards: 69000 (54000 on regular CC, 15000 on store CC

No lates/baddies

I will be free of CC debt by September, and I was just approved for an AMEX BCE that I will use primarily until 0% APR runs out in 12/2019.

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The best thing you can do for your scores is to stop applying for new credit.