Will adding a new CC increase my score?

[MizzB]

Just wondering what I should do next to increase my score if I've paid off all of my CC debt. I'm trying to get over 620 to purchase a house in November/December. Right now my CC utilization is at 0%. I've been advised to show approx 1% utlization so I'm going to charge something small and hope that it results in a points gain. Other than that, what do I do? Will adding a secured credit help by establishing a postiive line of credit and result in a score increase or will it just drop my score due to the inquiry? I had a pretty stable credit history until I was laid off and then everything went down hill. Now I'm trying to figure out how to build back up.

Thanks for any advice.

[MizzB]

About my mix of credit:

• 3 revolving accounts
• 6 installment accounts (student loans that I'm considering consolidating into one loan for manageability)
• Auto loan paid off
• No mortgage

Thanks again for any help!

[llecs]

You should take a hit in your FICO score if you were to add another CC. Your mix is OK, so that won't improve. The inquiry probably won't impact you at all. Your util won't improve, so no help there. Your AAoA will drop and that could cause a small score drop. Also, when it first reports, you'll get dinged for the new credit. On average, I have lost 20-25 pts per new CC reporting. Most of those points have returned within 6 months with the remaining usually by 1 year.

[MizzB]

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@llecs wrote:
You should take a hit in your FICO score if you were to add another CC. Your mix is OK, so that won't improve. The inquiry probably won't impact you at all. Your util won't improve, so no help there. Your AAoA will drop and that could cause a small score drop. Also, when it first reports, you'll get dinged for the new credit. On average, I have lost 20-25 pts per new CC reporting. Most of those points have returned within 6 months with the remaining usually by 1 year.

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llecs....thanks for the feedback.

Well it sounds like a new cc is not the answer. Not sure what to do now to increase my score.

[llecs]

Based on your scores, looks like there are some baddies to deal with. Any luck there?

[MizzB]

I do have some baddies. My plan for them are:

2 medical collections - paid OC but trying to get deleted via HIPAA process

2 charge-offs - paid (paying seemed to hurt my score somehow??) - going for GW removal of TL

3 CC's  w/lates from laid off period - already paid to 0 balance, but trying to get lates removed via GW letter

Beyond that, not sure what to do to help rebuild other than allow accounts to age.

[llecs]

You'll see some large gains when those are removed. Paying the CC COs could have dropped your score when the DOLA changed to a recent date. FICO could be reading it as a newer baddie and that lowered the score. Same can happen when paying a CA without a PFD.

GL on the rest. You'll get there.

[MizzB]

I'm seeing the damaging effects of paying w/o negotiation now. Now that I've become a regular reader of the content within these forums, i'm starting to learn the rules of engagement with creditors. I realize that my haste to pay everyone off when I became employed again may have affected my ability to maximize my points at pay off. Oh well ... what can I do ... you live and you learn.

Thanks again for the feedback.

[RobertEG]

Your major expectation of score gain seems to be the drop off date of the prior derogs from your CR.

What is the DOFD on your previously delinquent accounts?  Their drop off at 7 or 7 1/2 years from the OC DOFD will apparently be your next big boost.

Since  your revolving %util is now very low, you dont need an increase in CL.  All that adding a new CC will do is add a new inq, and reduce your AAoA.  Not apparently beneficial.