Score Increase Sweet Spot?

[Anonymous]

Is there such a thing, to keep score positively moving upwards on a monthly basis?  Here is my situation, I have a very thin file, I am proud of obtaining two credit cards, my AAOA is only 4 months.  My score hovers around 600.  I cross it, then I go back to 585, then back to 610 and I can’t figure out why.

I realize this past month, my two credit cards reported 0 balances and I should have left a small balance.  However, I received a Credit Limit Increase so I thought that would bump me up.  So I have learned from this exercise, that I must leave a small balance on each card.  Is that the right lesson to learn?

also, I had an account show up on my credit report, which should age off in September but it was a minuscule amount and I paid it last month, with an agreement to Pay for Delete.  The Delete hasn’t happened at time of this writing, but the balance has decreased to 0 and the score dropped again.  What is the lesson to learn here?  

Bottom line, what is the secret to score growth?  Even a point at a time?  I am exceedingly disappointed to see decreases.  I owe nothing at this point to anyone, but I will carry a small balance, alternating cards every month.  I don’t want inquiry hits as that decreases, but if I can take an inquiry to get a secured discover, should I?  Will that jumpstart a positive incremental increase monthly?

[Anonymous]

If you have zero balances on everything, a CLI won't help improve your score.  I guess for optimum scoring, your total UTI across all cards should be 8.9% or lower but not 0.  You can have 28.9% or lower reporting on 1 card without any heavy penalties.  Since your profile is young, you need to age your profile a little bit.  I believe there is a penalty for having balances on 50% or more of your cards so with you having only 2 cards then I honestly don't know if having a small balance reporting on 1 card will add much to your score or not.  I'll let some more experienced people here chime in.  You will be much better off when that PFD comes off your report.

[Anonymous]

I’m relatively new to the techniques as well but my guess would be, with a young file, use your cards regularly and make your payments. Carry a small balance (less than $15) month to month but pay anything above that. With where you are in the process, establishing a solid payment history over 6-8 months’ time to me is the best plan. To the lenders, you’re kind of an unknown quantity, so show them you can responsibly manage your bills. Since FICO weighs on-time payments heavier than anything else in scoring (35%), show them that you can and do pay on time every month and build the history to prove it. This WILL lead to limit increases as well as a solid payment history, and those two things will boost your score as your file thickens.

[Anonymous]

My comments in blue below.  Best of luck!

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@Anonymous wrote:

Is there such a thing, to keep score positively moving upwards on a monthly basis?  Here is my situation, I have a very thin file, I am proud of obtaining two credit cards, my AAOA is only 4 months.  My score hovers around 600.  I cross it, then I go back to 585, then back to 610 and I can’t figure out why.

I realize this past month, my two credit cards reported 0 balances and I should have left a small balance.  However, I received a Credit Limit Increase so I thought that would bump me up.  

CLIs do not in themselves improve your FICO score by even one point.

So I have learned from this exercise, that I must leave a small balance on each card.  Is that the right lesson to learn?

No.  Keep each card at < 29% utilization, if the goal is long term growth in score.  That's about all you need to do.  If you think you will be applying for a loan or a card, then implement a technique people here call AZEO for the 45 days prior to the app.  Otherwise AZEO isn't important for building a score long term.

also, I had an account show up on my credit report...

Do you mean a derog?  That's different from just an account.

which should age off in September but it was a minuscule amount and I paid it last month, with an agreement to Pay for Delete.  The Delete hasn’t happened at time of this writing, but the balance has decreased to 0 and the score dropped again.  What is the lesson to learn here?  

Bottom line, what is the secret to score growth?  Even a point at a time?  I am exceedingly disappointed to see decreases.  I owe nothing at this point to anyone, but I will carry a small balance, alternating cards every month.  

You should never carry a balance, which involves paying interest, but it is a good idea to report a balance on one card each month.

I don’t want inquiry hits as that decreases, but if I can take an inquiry to get a secured discover, should I?  Will that jumpstart a positive incremental increase monthly?

You have a low score, so almost certainly you have significant derogs.  I'd pull your three reports at annualCreditReport.com and look for every possible late or other derogs.

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[Anonymous]

OP, what is the source of your scores?

Second, you mention having a very thin file and that you have 2 credit cards.  What other accounts do you have on your credit report, open or closed?  I get the impression that you have a couple of other accounts since you mention negative information being present, but didn't suggest that it was for either of your revolvers.  If you have even 2 more accounts on your credit report, meaning 4 total, your file isn't really "thin" any longer. 

The scoring impact you're experiencing from negative information is probably 10X stronger than any impact you're feeling due to not having a reported balance, whether 0, 1 or 2 of your cards reports a balance, etc.  Those things are a very distant secondary issue with your primary scoring concern being the presence of negative information on your credit report.

[Anonymous]

First... my post was moved here when I know that I am not in the big leagues, I belong in the rebuilding topic but since it was moved here, I will answer.  I don’t feel like I have all the abbreviations down to properly converse here.

i pulled all three of my reports and scores from the Experian site and app, all three of my scores are FICO 8s.  I get a monthly update, or change update as they happen from Experian.

i messed up with credit years ago, most of my debt has since fallen off due to SOL, and/or I’ve paid over the years and data has aged off.  For example I started rebuilding, getting serious about getting credit in January 2018. At that time, I had a paid as agreed auto loan, and 2 derogatory items on my report.   I did a pay for delete on the 2 derogs and left the car alone and started my search for credit cards.  Feb I obtained one card, April I obtained the other.  My car, that I still drive is 15 years old, bought new, and that trade line fell off in February.  No other loans of any sort are on my reports.  Last month, an old Comcast account showed up as a collection, the only collection and I negotiated yet another PFD with them, and I have paid it.  It shows paid on all 3 reports but hasn’t been deleted yet. Aside from that my 2 pitiful credit cards show.  That is all I have on my report, looked at this morning, all 3 reports before writing my post.  My Average Age of Credit is now only 3 months.

NoI don’t mean pay interest, but I do know that I have to show a balance, and from reading the reading the replies, I should show a balance on both with total utilization of less that 10%.

[DollyLama]

Your post was probably moved here due to the initial inquiry on how to obtain utilization "sweet spot". 

When you state "most" of your accounts have been paid or aged off,  with exception of Comcast even paid is still a paid derog. It will increase when it hopefully deletes. Now do you have other old account that also were derogs but are paid? If so, that will be holding down your scores. You seem to understand the utilization and one card. Now the focus should be letting the 2 cards you do have age to 12 mos, you will see about a 30pt increase, and the inquiries will no longer be scoreable, and having a "clean" file, meaning only accounts reporting that have never ever been late, charged off, placed for collection. 

I think once you get the deletes and clean file, the shared secured loan technique on the boards will give you the credit mix that you lost when the car loan aged off. Always good to have at least 1 installment (not a finance company, but bank lender) and 3 cards. You have a young file now, but as it ages, good pay history, low utilization, the scores will keep rising. Rebuilding is patience as time passes. 

[Anonymous]

No, there is nothing else showing on any report from all 3 bureaus except the comcast, which is currently showing paid, but is supposed to be deleted, hopefully by the next cycle.  The other derogs are long gone, no longer showing up or anything.

[SouthJamaica]

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@Anonymous wrote:

Is there such a thing, to keep score positively moving upwards on a monthly basis?  Here is my situation, I have a very thin file, I am proud of obtaining two credit cards, my AAOA is only 4 months.  My score hovers around 600.  I cross it, then I go back to 585, then back to 610 and I can’t figure out why.

I realize this past month, my two credit cards reported 0 balances and I should have left a small balance.  However, I received a Credit Limit Increase so I thought that would bump me up.  So I have learned from this exercise, that I must leave a small balance on each card.  Is that the right lesson to learn?

also, I had an account show up on my credit report, which should age off in September but it was a minuscule amount and I paid it last month, with an agreement to Pay for Delete.  The Delete hasn’t happened at time of this writing, but the balance has decreased to 0 and the score dropped again.  What is the lesson to learn here?  

Bottom line, what is the secret to score growth?  Even a point at a time?  I am exceedingly disappointed to see decreases.  I owe nothing at this point to anyone, but I will carry a small balance, alternating cards every month.  I don’t want inquiry hits as that decreases, but if I can take an inquiry to get a secured discover, should I?  Will that jumpstart a positive incremental increase monthly?

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1. You need to be more patient.

2. Try to get the negative removed from your reports.

3. Try to let one card report a small balance while the other reports a zero balance.

4. Nothing will be gained by applying for new credit. The passage of time will help build your scores.

[Anonymous]

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@Anonymous wrote:

... I don’t feel like I have all the abbreviations down to properly converse here.

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You might consider opening a 2nd tab and having this available. Reading this site without abbreviation help is like reading Shakespeare without footnotes. (But like with reading the greating poet, over time the language becomes clear and one's persistence is rewarded -- a truly beautiful thing).