I'd love some advice on raising my score from decent into good. I've been working on improving my credit for the last 4 years, but it barely changes.
I've paid off all my negative debts, and have been working on removing a couple from my record. Removing an old negative record has actually lowered my score in the past, which worries me. I'd love some advice on how that works.
I've settled down, bought a house 6 months ago, opened a couple of credit cards more than 6 months before I bought the house, and one more recently. My student loans were consolidated years ago. Late payments are very rare.
I'm trying all the usual credit advice, why isn't anything changing?
2007-09-28 06:20:26 · 7 answers · asked by btoblake 3 in Business & Finance ➔ Credit
The only two things that will raise your credit score are:
1- Making on time payments. It accounts for 35% of your overall score. It would behoove you to get current and stay current no matter what. Make sacrifices in other areas of your life if you have to, but you want to make those payments before the due date.
2- Lower your debt ratio. If you are over the limit, at the limit or close to the limit on any of your credit cards, pay them down to a balance of less than 40% of your overall limit. Those will seriously kill your score. Debt ratio makes up 30% of your overall credit score.
You should see your score rise by doing those two things aggressively and consistently.
When negative information is removed from your report, your score does not go up. This is a common misconception. If that was the case, then anyone who has had terrible credit could simply pay everything and basically buy his way to grade-A credit. That's not at all fair to those who are responsible and have to earn their good credit rating, right?
If I were you, I'd also stop opening lines of credit. You said that you opened a couple before purchasing a house and then another one after. Each time you apply for credit, your score is dinged. This adds up over time. Manage what you have responsibly and don't get any more trade lines.
I hope this helps you a bit. Good luck!
2007-09-28 09:56:17 · answer #1 · answered by YSIC 7 · 2⤊ 0⤋
You have the house, which is a big ticket item needing your credit score. Unless you're planning on buying a car and financing it, or looking for a new job where they check your credit score I wouldn't worry too much about your credit score.
You'll think I'm nuts, but if you can get to where you only have your mortgage and everything else is a cash-basis for purchases, you'll forget all about your credit score.
The marketing hype about having a good credit score has evolved into how you feel about yourself, how others will look at you, and how you are as a person.
Who really cares???
Like I said, unless you're going to buy a car in the next 6 months, work on paying off everything but the house and see how your score improves. Try not to be late on payments though.
2007-09-28 08:15:23 · answer #2 · answered by Anonymous · 0⤊ 0⤋
"late payments are very rare"
There's a problem right there. ANY late payment kills your score. You need consistent on time payment history of at least 2 years to see score improvements. A late payment here and there, does not make a consistent on time history.
Are you carrying balances on the credit cards? Is the balance less that 30% of your available limit? The ratio of debt to available credit limit is a big factor in your score. Paying credit card balances in full every month is the best way to go.
2007-09-28 06:29:00 · answer #3 · answered by bdancer222 7 · 2⤊ 0⤋
A few things are at work here:
First, opening new credit (or even credit inquiries) has the effect of lowering your score.
Second, late payments (ever) are detrimental to your score.
Third, closing lines of credit has a negative effect on your score.
Finally, while you can mess up a credit score in a day, it takes a very long time to build it back up. Hang in there!
2007-09-28 06:29:35 · answer #4 · answered by Daniel T 5 · 1⤊ 1⤋
One late payment can effect your score for years. Canceling credit cards can actually hurt your score. It's better to have them and just not use them.
2007-09-29 02:26:19 · answer #5 · answered by Classy Granny 7 · 0⤊ 0⤋
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2007-09-30 01:31:55 · answer #6 · answered by Anonymous · 0⤊ 1⤋
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2007-09-28 06:31:39 · answer #7 · answered by Anonymous · 0⤊ 1⤋