Project 800!! Please help!

[Anonymous]

Hi All,

Posting today for my wife. Here are her Credit details:

Experian 717

Equifax 738

TU 711

Just 2 Open Accounts

1 - BofA Visa Card (7000 Limit)

1- Auto Loan ($1000 balance)

No Mortgage

1-Hard pull

Last late payment 5 years ago

Average Acct age 12 years

Oldest Acct. 15 years

When her Credit Card balance is very low her Equifax is arounf 750-ish...

She'd like to get to the next step, the 800 neighborhood.

My intuition wants to advise her to get another auto loan (hers is paid off in Oct.) and maybe add 1-2 more Credit Cards... and maybe an Amex. Do all the app'n within like a week and take the lumps from the hard pulls and reap the higher score in a year?

What say you, experts?

[SouthJamaica]

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@Anonymous wrote:

Hi All,

Posting today for my wife. Here are her Credit details:

Experian 717

Equifax 738

TU 711

Just 2 Open Accounts

1 - BofA Visa Card (7000 Limit)

1- Auto Loan ($1000 balance)

No Mortgage

1-Hard pull

Last late payment 5 years ago

Average Acct age 12 years

Oldest Acct. 15 years

When her Credit Card balance is very low her Equifax is arounf 750-ish...

She'd like to get to the next step, the 800 neighborhood.

My intuition wants to advise her to get another auto loan (hers is paid off in Oct.) and maybe add 1-2 more Credit Cards... and maybe an Amex. Do all the app'n within like a week and take the lumps from the hard pulls and reap the higher score in a year?

What say you, experts?

---

Need to know what kind of balance typically reports on her credit card, what the original amount of the loan was, whether the loan has to be paid off soon, whether she's tried to get the late payment removed.

Are you sure there are no other negatives?

I'm sure your intuition is wrong about the auto loan, that's going to bring her score down, not up.

[Anonymous]

Thanks for looking!

Depending on different factors her utilization on the Visa Card runs from 0-40%.

If she charges $2000, she usually pays it off in 2-3 months. Last year she charged around $10k in Veterinarian bills, paid it all off over a 6 month period. Today carries around a 2000 balance. It will be near zero again soon.

Well... her current lease ends soon and thats her installment loan on her report. Shes going to buy a new car.

When we recently moved into a new rental the agent commented that although her score was good, her credit was quite "shallow" with just 2 accounts and relatively low numbers.

I hadnt thought about the 5 year old late... its on an old closed account.

Maybe 6 years ago she had 2-3 accounts with difficulties, 30 and 60 d lates. Clean now for 5 years.

Oh and car loan (lease) was $21k

[jamie123]

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@Anonymous wrote:

Thanks for looking!

Depending on different factors her utilization on the Visa Card runs from 0-40%.

If she charges $2000, she usually pays it off in 2-3 months. Last year she charged around $10k in Veterinarian bills, paid it all off over a 6 month period. Today carries around a 2000 balance. It will be near zero again soon.

Well... her current lease ends soon and thats her installment loan on her report. Shes going to buy a new car.

When we recently moved into a new rental the agent commented that although her score was good, her credit was quite "shallow" with just 2 accounts and relatively low numbers.

I hadnt thought about the 5 year old late... its on an old closed account.

Maybe 6 years ago she had 2-3 accounts with difficulties, 30 and 60 d lates. Clean now for 5 years.

Oh and car loan (lease) was $21k

---

Any baddies, no matter how old, as long as they are on her report, will drag her scores down. She will see a bump in her scores once the very last baddie falls off and leaves her with a clean report.

And yes, I would highly recommend that she get 2 more credit cards this year and maybe if she wants, one more credit card in about a year. You really want to end up with 5 to 8 credit cards total. That is what would be considered a thick credit file and as these cards aged they will have a strong stabilizing influence on her scores when she does need to add credit like for auto loans and such.

A score of 760 is all that is needed to get the very best rates from lenders. Anything above 760 is only for bragging rights and over a few years I can see your wife in the 800s with a thick credit file.

There are 2 credit scoring factors that will nick your score if you have less than 3 credit cards and they are:

• You get nicked points if 50% or more of your cards report a balance.
• You get nicked points if all your credit cards report a balance of $0.

By having only 2 credit cards you can't win in the above scenario.

You want 1 credit card to report a small balance that is less than 10% of that card's credit line and all the other cards to report $0 to get the highest scores. This is called grooming your scores and you only need to do this if you want to see the highest scores that you are capable of achieving or are planning to apply for new credit in the next month and want high scores for that. In my situalion, I lose 18 points if all of my credit cards report a $0 balance vs having one card report a balance of $3. Yes, having 1 card report a balance of $3 gains me 18 points!

[SouthJamaica]

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@Anonymous wrote:

Thanks for looking!

Depending on different factors her utilization on the Visa Card runs from 0-40%.

If she charges $2000, she usually pays it off in 2-3 months. Last year she charged around $10k in Veterinarian bills, paid it all off over a 6 month period. Today carries around a 2000 balance. It will be near zero again soon.

Well... her current lease ends soon and thats her installment loan on her report. Shes going to buy a new car.

When we recently moved into a new rental the agent commented that although her score was good, her credit was quite "shallow" with just 2 accounts and relatively low numbers.

I hadnt thought about the 5 year old late... its on an old closed account.

Maybe 6 years ago she had 2-3 accounts with difficulties, 30 and 60 d lates. Clean now for 5 years.

Oh and car loan (lease) was $21k

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1. Revolving utilization is based on the balance reported in the statement. So if she wants to maximize her points from credit card utilization she needs to make sure that the card reports a balance of 9% of the limit or less.

2. If she wants 800 credit scores she should not be taking out another car loan. If the lease is running out, she can replace that with small share secured loan, then pay it down to 9% or less. That will replace the points she'll be losing in FICO 8 for paying off her lease.

[Anonymous]

great info, THANKS ALL!!

[Anonymous]

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@Anonymous wrote:

Thanks for looking!

Depending on different factors her utilization on the Visa Card runs from 0-40%.

If she charges $2000, she usually pays it off in 2-3 months. Last year she charged around $10k in Veterinarian bills, paid it all off over a 6 month period. Today carries around a 2000 balance. It will be near zero again soon.

Well... her current lease ends soon and thats her installment loan on her report. Shes going to buy a new car.

When we recently moved into a new rental the agent commented that although her score was good, her credit was quite "shallow" with just 2 accounts and relatively low numbers.

I hadnt thought about the 5 year old late... its on an old closed account.

Maybe 6 years ago she had 2-3 accounts with difficulties, 30 and 60 d lates. Clean now for 5 years.

Oh and car loan (lease) was $21k

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You know, if those lates are on active accounts, it wouldn't hurt to call the creditor and see if they would take them off. They will probably not do it. But you never know, they might work with her. At least she gave it a shoot verses not knowing. If successful would immediately increase her score. 

Ooops nevermind,, missed that they were old closed accounts. My bad.

So in this case, would have her analyze those closed accounts and ask her the following.

1. Are those derogs "actually accurate"?

2. Are those accounts "actually hers"?

If answer is, yes, nothing but waiting till they drop at the seven year mark.

If, answer is "no" then proceed further below.

This could be disputed with the credit reporting agencies, but follow up questions to ask her.

1. If she could get the account or accounts removed, how much would it effect my AAoA? If it would drop her AAoA significantly, may not be worth it. Thickness of file.

2. Is it worth the hassle of the possible multiple dispute process with each credit reporting agency, verses waiting for the baddies to drop? This process can take some time and may or may not succeed. Many don't want to deal with it, don't have the time, lack the consistency. Which isn't a bad thing, just knowing yourself.

Then she will know what to do about the derogatories

Pretty much agree with the other suggestions above as well.