fast-tl

Any tips on bumping up my credit score? I'm at a 515 or 519, and I'd like to increase that by 100 points or so at least. I have a few accounts I know I can settle with or pay off, but are there any other suggestions?

gordon_gekko

Well.....there's really no secret. Basically, the mantra is pay bills on time, keep acct balances low, and only take out new credit when you really need it Not too exciting huh?

But you could also try looking for errors in your report (eg....payments that were paid on time but marked as late, outstanding debts shown that you actually paid off, debts that should've been erased over time, or accts that aren't yours, etc....). Pay off your credit card balances, and never let your payments go 60 days past due, because some lenders don't report 30 days past due.....but they all report 60. So pay your debt before it's due and keep your balances low if you want to maintain a good record.

Also....do not close unused accts, w/o paying off the debt, simply to boost your score..... it won't work. it just changes your utilization ratio (total debt / total avail. credit) and makes it look like you're closer to maxing out your accts...

Lenders want to reward those who are conservative and cautious about credit.....so pay your bills in time, keep your acct balances low, and don't over-use it and you should be golden...

Ken1997TL

My method was to do 50% down on my TL. I could have bought it outright but I wanted to raise my score, so I'm doing 24 months of payments on the other 50%. Credit score is going up nicely.

From about age 16 onwards, I would buy all kinds of stuff for family and family friends, they then paid me cash. Brought up my score a lot too.

Example: Family roadtrip. I put the food bills and gas on my credit card. Paid it off in full at the end of the month.

Another example: Friend is about to buy something in cash and has exact or near exact amount of money. I used my card, he/she gave me the cash

It adds up after a few years. I was "buying" over $55,000 worth of stuff in just one year alone. Probably about $2000 was really mine though. But to a credit card company... well, I just looked like a young guy who paid his huge bills on time.

By age 21, I had a $30,000 limit on my Visa.

giovanni

Very nicely put......

NSXNEXT

iTrader: (2)

Just got my FICO score...... 729 :woohoo:

indoMFP

I got a couple of credit cards and I use them frequently. I went from 5 credit cards to 3 and now i just don't use one of them. There are no balances on the closed accounts and also on the one I no longer use. Am I screwing up my credot by having a credit card open that I do not use?? I always pay off my credit card bills in full and also i got my TL, but I had to get a cosigner cause they were raping me on the interest. How can I improve my score cause I want to but a house this year or early next year....

Giovanni, what do you do for a living??? You seem very interested in financial markets and shit....

JoganJani

Indo you are better off cancelling your unused cards. Lenders look at all the credit cards as how much borrowing power you have. More the card less the points you get. Cancel all your credit cards and insist them to let all three credit beauros know about it. Also get a credit report once a year to know what is listed on your account.

fast-tl

Acutally they say to not automatically cancel/close unsued accounts, because that will skew your debt ratios. For example, with 5 cards $1k limit apiece. If all are open with a balance of 2500 across 3 of them, you are using 50% of your available credit(because you have $5k available.) If you close the 2 inactive ones, that same $2500 balance across 3 cards means you're using 83% of your available credit of $3k!!! Bad sign.
So maintain no balance on some cards but do not close them.
Here's a link to the article that illustrates this and other good points.

http://moneycentral.msn.com/content/...ing/P38052.asp

I quote only the part that's pertinent to his question:
"Don’t close old, paid-off accounts
We used to tell people to close accounts they weren’t using. Now here’s the word from Craig Watts of Fair Isaac’s consumer affairs office: “Closing accounts can never help your score, and often it can hurt.”

This knowledge is frustrating to those who want to simplify their lives and reduce the opportunities for identity theft by closing unused accounts. But credit facts are credit facts.

Shutting down credit accounts lowers the total credit available to you and makes any balances you have loom larger in credit score calculations. If you close your oldest accounts, it can actually shorten the length of your reported credit history and make you seem less credit-worthy.

Of course, perhaps you can afford not to care too much about the effect of closing an account. If you don’t use your cards much and your score is already high, the damage caused by shutting down more recent unused accounts will be minimal and may be well worth the peace of mind.

If you do carry balances or charge a lot, however, leave all your old accounts open, especially if you’re about to apply for new credit.

Tip: Keep all this in mind the next time a department store clerk offers you a 10% discount for signing up for a new card. Each new account can put a small ding on your credit score, and offer a new opportunity for credit thieves. Since closing accounts can hurt, it’s better to apply only for credit you really need."

JoganJani

Fast-tl, what you quoted is right only if you are carrying the balance on your cards. What I told indoMFP is since he pays all his cards on time. Here is another link to increase your score;

http://money.cnn.com/2002/02/15/debt...s_creditscore/

spidey07

NO!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Do not close accounts. This is a surefire way to hurt your score. Length of credit history counts something like 15% (you can read much more on fool.com and myfico.com)

Its one of the biggest perpetuated myths "gee, just get rid of these accounts and I'll look good"

spidey07

sweet!!!!

If I pay down my credit cards my score should jump to 761.

Now the tough decision.....pay them off or not?

I've been holding onto about 15K in savings given the tough economic times and job market just to make sure I have 6 months of living expenses immediately available.

What I really should do is take 6K to pay off balances and put 5 in index fund and leave 4 immedately available in savings. coupled with my weird need to have at least 4K in checking I should be golden.

indoMFP

I read both articles (they about the same thing) and I also spoke to a buddy (CFA) and I have decided to leave the account open, I get the statements and can monitor theft, so i am not to worried. Thanks for the information guys...

giovanni

Simple very simple....dont take it the wrong way........If one cant afford to purchase something and need to use a credit card....DONT PURCHASE IT...Only unless you can pay the card off before the end of the month.
We live in society that credit is so readily available..one does not realize the consequences until it is too late.

fast-tl

Right, which is why we're talking about *raising* the credit score. Your strategy is sound for not getting into more debt, but doesn't have a bearing on the topic of the thread. Don't forge that each of us has different means at our disposal; Some people can't pay cash for the vacation and to spread that out. I think your point is to use credit responsibly, but it was stated as don't use credit, which is not entirely practical.

spidey07

And with 0% all over the place I get to use their money for free for 12-24 months while the cash is earning me something.

That's the best kind of money - the free kind.

giovanni

Shoofin

I know that when it comes to closing inactive accounts, you shouldn't do more than a few within a certain period of time. There really isn't anything wrong with cancelling cards, but if you cancelled like 5 of them at once it's a red flag on your account, people running inquiries would think that you had a problem with the company that made you close the account.

indoMFP

okay i just read an article that said that you should cancel a credit card if you want to buy a home, i want to buy a home later this year or early next year.... anyone care to shed some light on this??
http://moneycentral.msn.com/content/...ing/P88393.asp

fast-tl

I think the key bit in that article is that in a mortgage situation if you have *many* accounts with low or no balance, there's the temptation there, so you want to balance between available credit and open accounts, re: my long post above. You don't want your amount owed vs amount available to be a high percentage, but by the same account you don't need an obscene amount of available credit showing either.