My score never seems to improve, any ideas?

[Anonymous]

Hey, so ill start by saying ive never been able to use credit... ive tried applying for cards in the past, always to be denied a credit line. i have a few collections accounts i learned of that are pretty old, 2 of which are actually the same account, which for some reason got split into multpiles, these are medical bills from about 5 years ago. i was able to get a secured card to try and build up my credit history about 6 years ago, which ive kept in good standing with no late payments. my score did not approve (its always been about 550 or so) about a year ago, cap one decided to give  me an unsecured, 400 dollar limit, which i use for gas and pay off every month, it doess hasnt gone up. also about 5 years ago i purchased a truck from a local used car dealer. i put about 2k down on a 15k truck, with a rediculously high intrest rate, but i was making good money, and felt pretty much hopeless in the credit department so i figured just bite the bullet and pay it, and my score will go up. well i paid it off early, no late payments, and my score is steadfast at 550... i was recently married and my wife is trying to get my score up so she added me to her credit lines, increasing my credit history, however my scores have no improved, regardless of her 760 score. 

i make 200k+\year and have grown accustomed to paying for things in cash my entire life, however its time to purchase a home, expand my business and credit will be a big part of making that happen without investors... wth am i doing wrong here??? i went to purchase a new truck last week and my score is still at a 550,  i couldnt get approved for anything.

my credit utilization is below 50%

[NRB525]

Welcome to the forums. It's frustrating when there does not seem to be a way to improve your score.

Where are you obtaining your score, that says 550? The recent truck application would likely be a FICO Auto score, which is a different calculation algorithm than the FICO 8 commonly used for credit cards. The FICO 8 score could be a bit higher.

Have you obtained your free copy of your credit report from one of the three credit bureaus, Equifax, Transunion or Experian? Getting the actual copy of the credit report is the first step, because that tells you what is in your credit file. If there are old medical collections, you may want to visit the Rebuilding forum here, to ask for suggestions on how those might be paid off to try to get them removed.

However, since your scores are so low now, that is strange with no recent late payments. It is possible the collection accounts are being refreshed by the agency, which would keep pounding your score down. It's not right, but it happens. Finding a way to get the collections taken care of and removed would help a lot.

The secured card and Capital One card are helpful, although the low limits don't provide much credit availability.

Which secured card do you have?  Does that have any fees?

The State Department Federal Credit Union is something to consider. There is a credit check to join, to open a savings account, but once you are a member, you can apply for and get their secured credit card with no further credit check. You put a deposit in a savings account, and that acts as security for the credit card, so gives you control over how large your limit is. It can help with utilization measures, has no fees, and a low interest rate.

The main things are to understand the collections, keep paying on time, and understand what is in your file. If you have more information about specifics in your file, raising questions here (or in the Rebuilding forum) can help you to gain understanding.

Good luck!

[Anonymous]

Also, paying the car off actually may have hurt your score, because now you don't have an installment loan. Yes, get another card, so that you have three. Pay off two each month, and keep a low balance 1-9%  on the third one. Make sure that you are asking for credit limit increases for your existing cards. 

[Anonymous]

Good post and questions above from NRB525.  The first thing I was going to ask as well is where you are getting your scores from.  If you'd like to grab your three FICO 08 scores you can do so for $1.00 from Credit Check Total.  This way you'll have all 3 of the most common scores and will know where you really stand and what your starting point is for improving those scores you get.

Priority #1 has got to be getting rid of those collections from your credit report.  Those alone will be worth probably 100 points, give or take, assuming they are your only negative items.  As NRB525 stated though, you need to obtain a copy of your credit report to evaluate it for negative items to ensure those collections are all that are holding you back.  If you hit the rebuilding forum on here you can find a lot of information on ways to likely get them removed.  The most common is called a "pay for delete" in which you work out a deal with the collection agency that if they remove the account from your credit report you'll pay them.  Since money isn't an issue for you, your chances of success here are better than usual as you can offer to pay it in full where some people try to bargain for a lower amount.  Just get them to mail or email you a letter stating that if you pay the collection in full they'll remove it from your credit report.  

Second, I'd recommend the Share Secure Loan technique which you can find on this forum.  Since your auto loan is closed and you don't have a current open installment loan, employing this tactic will add about 30 points to each of your FICO 08 scores (that you get for $1.00 from CCT).  

These two suggestions above IMO would bring your FICO 08 scores into the mid-upper 600's, making it possible for you to acquire several credit cards.  And, that's assuming your starting point is 550 with your FICO 08's, which may not even be the case depending on where you're getting your scores now.  You may be more at 600, for example, so employing the 2 suggestions I made above could feasibly put you at 700 or slightly above.  Accomplishing the above can be done within 2-3 months.  In the meantime simply continue to pay all of your bills on time and keep the balances paid off every cycle.

[Anonymous]

Such extraordinarily helpful and thoughtful comments from the others.  You guys are really selfless ambassadors for this site.

My only tiny contribution is to suggest that the OP delay the SS loan technique for a short while.  BBS is right that it should be on his list of things to do.  But pulling his reports, learning how reports and scoring work, and crucially getting one of his cards to report $0 while the other card reports a small dollar figure, like $10 or so -- this has all got to come first.

Note that our OP says that he may have a utilization as high as 48%. 

By doing all that stuff first, he should get some improvement to his score, which really should happen before he tries to join Alliant.  Remember that Alliant will indeed pull his reports and run a score on him before granting him membership (and again for the SS loan).  The pulls are soft but that doesn't mean Alliant isn't looking at them.  By quickly improving what he can, he'll prevent any CU from rejecting him outright.

[HeavenOhio]

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@KS21 wrote:

Also, paying the car off actually may have hurt your score, because now you don't have an installment loan. Yes, get another card, so that you have three. Pay off two each month, and keep a low balance 1-9%  on the third one. Make sure that you are asking for credit limit increases for your existing cards. 

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Just to add, don't pay interest.

Pay all cards except one to zero before the statement cuts.

On the card that reports a balance, the balance should come from new charges. Make sure your previous statement balance is paid in full. You can do that right after the statement cuts. During the month, use the card as you like, and make payments as necessary. Then right before statement time, pay it down to the 1-9% that KS21 mentioned.

[Anonymous]

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@KS21 wrote:

Make sure that you are asking for credit limit increases for your existing cards. 

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Really good advice in general, KS21! 

We do need to be careful, however, about how we give advice to this or any new visitor.  Remember that he knows very little about how credit works.  Urging him to request CLIs could lead him to get them via a hard inquiry. 

Naturally in the back of your head was the idea that he use soft-pull only requests, but not everyone knows how to do these, especially those new to our world. 

Remember that our OP is very comfortable using debit cards.  He doesn't need bigger CLs (which won't help his score anyway).  Right now he just needs to learn basic skills about how to keep one card at $0 and the other card reporting a small balance.  Many months from now he can begin to think about whether he wants to start earning reward on his existing spending, which would entail more cards and higher limits.

[Anonymous]

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@Anonymous wrote:

Such extraordinarily helpful and thoughtful comments from the others.  You guys are really selfless ambassadors for this site.

My only tiny contribution is to suggest that the OP delay the SS loan technique for a short while.  BBS is right that it should be on his list of things to do.  But pulling his reports, learning how reports and scoring work, and crucially getting one of his cards to report $0 while the other card reports a small dollar figure, like $10 or so -- this has all got to come first.

Note that our OP says that he may have a utilization as high as 48%. 

By doing all that stuff first, he should get some improvement to his score, which really should happen before he tries to join Alliant.  Remember that Alliant will indeed pull his reports and run a score on him before granting him membership (and again for the SS loan).  The pulls are soft but that doesn't mean Alliant isn't looking at them.  By quickly improving what he can, he'll prevent any CU from rejecting him outright.

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Good point here.  I was moving on to "102" level stuff before suggesting the basic "101" items such as making sure utilization is in line.  I hadn't really considered that with the OP, but since he's got plenty of disposable income, coupled with the fact that his credit limits aren't very big, there's no reason he can't (and shouldn't) be reporting single-digit aggregate utilization to maximize his current scores with respect to the utilization sector of the FICO pie.

[Anonymous]

so my current check was at the dealer and he came back and told me i was right around 550, i pulled my experian report and it says 550... i have not done my yearly three bureau yet, but i did last year and it was about the same. my wife has about 30k in credit lines and im on all of them now and they show up on my report (via credit karma)...

i am new to the credit world you got that right, im trying hard to get my score up though. thanks to my wife i have roughly 30k in credit cards, one card gets hardly used between the two of us, the other ones we use for everything and pay them off. one for daily purchases and one for bills, we have everything on auto pay. i would expect my score to jump up after all this... however it seems like it wont move at all, regardless of how much positive i do! i know collection acounts are bad news, but not enough to keep me at 550... right?

[Anonymous]

btw, credit karma says i have a 641... i dont think credit karma is very accurate :\