Why is my credit score so low?

[Anonymous]

Hello everyone,

I'm new to this forum and looking for some insight as to why my credit score is so low.

Credit score from Credit Karma is 720.  This is roughly the same score I had from the big three when my credit report was pulled for a refinance 8 months ago.

Age 25

Longest CC was back in 2005

Currently have 4 credit cards, none with a balance.

Newest credit card was received last week.

2 mortgages totaling 200,000, one being a rent house.

I had a car loan for 20k that I paid in full 2 years early.

1 car loan totaling 28k.

no student loans, no debt other than these three loans.

1 account was paid in full after they smashed my credit report when I had turned 18 from a hospital bill.  I was 17 when I went in but turned 18 the next week and my mom didn't know they tried to bill me instead of her, and we never caught this for a few years.  We finally pulled my credit report when I was 20 and saw this.  We went ahead and paid it but they still refused to take it off my report.  If my math is correct this will be expunged this year?

Let me know if more info is needed.  I just can't see how I have never missed a payment on anything other than the hospital bill and my credit score is still lower than some 20 year old college students......

[Anonymous]

1.  720 isn't low.

2.  Most "20 year old college students" have a very thin file and their high scores are misleading.

[Anonymous]

Oh I forgot to mention the two cars I use are my Amex which has a 10k limit and my recently acquired chase freedom also with a 10k limit. The other two cards I had are both locked in a safe and I haven't used them in years. I was scared to close these out for potential of a decrease in score.

[haulingthescoreup]

As the previous poster said, a 720 FICO score is exactly where someone of your age and with your (short-ish) length of credit history, and a serious derog (the collection, even though paid), and a new account, would expect to be. Also, it's a FAKO (as you realize), and even though it was in line with your FICO scores for your refi pull, things have changed since then on your reports, so I doubt that your FICO matches.

Couple of things: Click on the link "Closing Credit Cards" in my siggy below to understand the impact of closing cards. That will help you make an informed decision. Also, you're correct: the collection will probably fall off soon, since it appears to be about 7 years old. Many people have seen 75-point leaps in their FICO's when a collection comes off. Yours might not jump that much, as this varies by credit profile, but you should expect to see a jump.

[Anonymous]

Very informative thank you both for commenting on my situation. I am also thinking of applying for the sapphire card to attempt to take advantage of the sign up bonus and bc my wife and I will be flying a few times next year. How badly will this affect my score as I just got another card this week? It's rare for me to be doing this bc I haven't applied for a card in 3 or 4 years now I'm looking at two in one week for rewards purposes. Thanks in advance, I appreciate your valuable info!

[haulingthescoreup]

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@Anonymous wrote:
Very informative thank you both for commenting on my situation. I am also thinking of applying for the sapphire card to attempt to take advantage of the sign up bonus and bc my wife and I will be flying a few times next year. How badly will this affect my score as I just got another card this week? It's rare for me to be doing this bc I haven't applied for a card in 3 or 4 years now I'm looking at two in one week for rewards purposes. Thanks in advance, I appreciate your valuable info!

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IMO, don't app for anything until the collection is off. Seriously. Especially something from Chase. If you're not traveling until next year, it's definitely worth the wait.

Without the collection you have a much better chance of: (1) getting approved (2) getting a good CL (3) getting favorable terms (APR, etc.)

I always say that app'ing is like going on a first date. You want to look as good as you can.

edited to add the "IMO" part 

[Anonymous]

Excellent advice thank you. Is there any way to find out and exact date that my past collection will be taken off my report?

[Anonymous]

it should tell you expected date of removal