How to improve credit score

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kayanco
Posts: 537
Joined: Sat Jun 07, 2014 12:20 am

How to improve credit score

Post by kayanco » Wed Oct 04, 2017 12:33 am

Hi guys,

Need your feedback please.

My FICO score is in the good range, ~750. I'm wondering what can I do to reach 800+?

Some background on credit history:

0 late payments.
0 negative remarks.
~2-3% utilization out of ~100K total SL.
4 CCs.
1 auto loan, started few years ago (paid off now).

When I applied for the auto loan, even then my score was ~750 and I thought I would get a low rate. But I didn't, and the reason given was that I only had CCs on my history, and no previous auto loans.

I think I still have a poor mix of different types of credit. Is that the main reason holding my score back?

1. Any way to increase my score?
2. Is it possible to take some loans and pay them off without interest, to increase score?

Thanks for your help.
Last edited by kayanco on Wed Oct 04, 2017 12:49 am, edited 1 time in total.

Longtermgrowth
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Re: How to improve credit score

Post by Longtermgrowth » Wed Oct 04, 2017 12:43 am

The only easy thing I can think of is time: Average age of accounts, the higher the better. It's one factor many seem to not consider when thinking of closing that old card they've had forever, but no longer use.

macman_65
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Re: How to improve credit score

Post by macman_65 » Wed Oct 04, 2017 7:25 am

You may not be able to do anything about it, if you don't have long enough credit history.

My credit rating fluctuates between 810-835 usually it drops shortly after I pay my daughter's college bill.
My numbers are close to what you supplied:
100% on-time payments
1% Credit used
115K available credit

My oldest credit line is 24 years.

kayanco
Posts: 537
Joined: Sat Jun 07, 2014 12:20 am

Re: How to improve credit score

Post by kayanco » Wed Oct 04, 2017 8:00 am

Longtermgrowth wrote:
Wed Oct 04, 2017 12:43 am
The only easy thing I can think of is time: Average age of accounts, the higher the better. It's one factor many seem to not consider when thinking of closing that old card they've had forever, but no longer use.
I see. That's good information. Thanks.

kayanco
Posts: 537
Joined: Sat Jun 07, 2014 12:20 am

Re: How to improve credit score

Post by kayanco » Wed Oct 04, 2017 8:01 am

macman_65 wrote:
Wed Oct 04, 2017 7:25 am
You may not be able to do anything about it, if you don't have long enough credit history.

My credit rating fluctuates between 810-835 usually it drops shortly after I pay my daughter's college bill.
My numbers are close to what you supplied:
100% on-time payments
1% Credit used
115K available credit

My oldest credit line is 24 years.
Thanks for your response.

My oldest card is 13 years old.

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flamesabers
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Location: Rochester, MN

Re: How to improve credit score

Post by flamesabers » Wed Oct 04, 2017 8:31 am

How recently did you check your score? You say when you applied for the auto loan your score was about 750. Has it not changed much in the last few years?

Credit mix is 10% of your score, so I wouldn't give that too much weight as to why you're not getting closer to the 800+ score. Do you have a lot of recent hard inquiries on your credit report? How old is your newest credit card?

kayanco
Posts: 537
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Re: How to improve credit score

Post by kayanco » Wed Oct 04, 2017 8:59 am

flamesabers wrote:
Wed Oct 04, 2017 8:31 am
How recently did you check your score? You say when you applied for the auto loan your score was about 750. Has it not changed much in the last few years?

Credit mix is 10% of your score, so I wouldn't give that too much weight as to why you're not getting closer to the 800+ score. Do you have a lot of recent hard inquiries on your credit report? How old is your newest credit card?
Hi,

Thanks for wanting to help.

I checked a few days ago.
Only one hard inquiry in the last year.
Newest credit is about 3 years ago.

I can't say 100% that the score was exactly 750 when I applied for auto loan few years ago. But I remember checking my report and score and thinking that since my score is excellent I would be getting the lowest rate (even at that time I had 0 late, ~3% utilization). But I was given the reason that even though my actual score is very high, I don't have a history of auto loans, so I'm not getting the lowest rate.

Also, I do see this under the section "What's hurting your score":
"You have no recent activity from a non-mortgage installment loan."
(along with the low age factor, which I can't do anything about).

takeshi
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Re: How to improve credit score

Post by takeshi » Wed Oct 04, 2017 9:06 am

I replied to your FlyerTalk thread so I won't rehash all that over here.

However, you're going to see messages like that until you reach 850. I'm not close to 850 with my FICO 8's but I'm well above 800 and I see such messages as well. "Hurt" in cases like this is in reference to things that have a very small impact. I'd still maintain that you just need to not obsess over score just for the sake of score and let your accounts age. 4 cards is plenty to continue to improve but it will take time.

Are you intending to apply for new credit?
Longtermgrowth wrote:
Wed Oct 04, 2017 12:43 am
The only easy thing I can think of is time: Average age of accounts, the higher the better. It's one factor many seem to not consider when thinking of closing that old card they've had forever, but no longer use.
It's something to consider but more of a concern IMO when opening accounts versus closing accounts. AAoA is not immediately impact by account closure. However, it is immediately impacted when a new account reports.

JBTX
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Re: How to improve credit score

Post by JBTX » Wed Oct 04, 2017 12:36 pm

kayanco wrote:
Wed Oct 04, 2017 8:59 am
flamesabers wrote:
Wed Oct 04, 2017 8:31 am
How recently did you check your score? You say when you applied for the auto loan your score was about 750. Has it not changed much in the last few years?

Credit mix is 10% of your score, so I wouldn't give that too much weight as to why you're not getting closer to the 800+ score. Do you have a lot of recent hard inquiries on your credit report? How old is your newest credit card?
Hi,

Thanks for wanting to help.

I checked a few days ago.
Only one hard inquiry in the last year.
Newest credit is about 3 years ago.

I can't say 100% that the score was exactly 750 when I applied for auto loan few years ago. But I remember checking my report and score and thinking that since my score is excellent I would be getting the lowest rate (even at that time I had 0 late, ~3% utilization). But I was given the reason that even though my actual score is very high, I don't have a history of auto loans, so I'm not getting the lowest rate.

Also, I do see this under the section "What's hurting your score":
"You have no recent activity from a non-mortgage installment loan."
(along with the low age factor, which I can't do anything about).
I would get that message and I was fairly close to the highest credit score. I had a car loan briefly years ago but quickly paid it off.

Have you tried credit karma? It will give you some insight as to what is driving your score.

If i had to guess your number of accounts is fairly low if you only have 4 ccs no mortgage no car loan or installment loan. It is kind of a catch 22, when you apply for new credit the inquiry hurts your score, and will decrease your average age of acccounts a bit, your utilization may or may not be affected, but once those are established your utilization improves and you have more credit accounts which is generally helpful to a point.

I was recently near 850. Then i got a couple of new credit cards and did a cash out refi and it knocked it back to around 810. I suspect if I leave it alone it will start to gravitate back up.

kayanco
Posts: 537
Joined: Sat Jun 07, 2014 12:20 am

Re: How to improve credit score

Post by kayanco » Wed Oct 04, 2017 12:47 pm

JBTX wrote:
Wed Oct 04, 2017 12:36 pm
..
If i had to guess your number of accounts is fairly low if you only have 4 ccs no mortgage no car loan or installment loan. It is kind of a catch 22, when you apply for new credit the inquiry hurts your score, and will decrease your average age of acccounts a bit, your utilization may or may not be affected, but once those are established your utilization improves and you have more credit accounts which is generally helpful to a point.

I was recently near 850. Then i got a couple of new credit cards and did a cash out refi and it knocked it back to around 810. I suspect if I leave it alone it will start to gravitate back up.
So I should open more accounts? I was considering that, but I don't think more CCs would help, since part of it likely is the lack of other types of credit.

Any way to open other types of credit without interest? As in open a loan, and pay back the same amount.

Thanks.

JBTX
Posts: 1716
Joined: Wed Jul 26, 2017 12:46 pm

Re: How to improve credit score

Post by JBTX » Wed Oct 04, 2017 1:01 pm

kayanco wrote:
Wed Oct 04, 2017 12:47 pm
JBTX wrote:
Wed Oct 04, 2017 12:36 pm
..
If i had to guess your number of accounts is fairly low if you only have 4 ccs no mortgage no car loan or installment loan. It is kind of a catch 22, when you apply for new credit the inquiry hurts your score, and will decrease your average age of acccounts a bit, your utilization may or may not be affected, but once those are established your utilization improves and you have more credit accounts which is generally helpful to a point.

I was recently near 850. Then i got a couple of new credit cards and did a cash out refi and it knocked it back to around 810. I suspect if I leave it alone it will start to gravitate back up.
So I should open more accounts? I was considering that, but I don't think more CCs would help, since part of it likely is the lack of other types of credit.

Any way to open other types of credit without interest? As in open a loan, and pay back the same amount.

Thanks.
Like i said sign up for credit karma.com. See what it says.

I'm not an expert so I'm not going to advise you to sign up for more credit cards. I suspect if you did it would not help short term but may help long term.

I have no idea on the second question. I recall somebody here saying his credit union would allow him to make an installment loan to himself or some such (yeah it sounds weird) but beyond that I don't know.

I wouldn't worry with it too much. Having a high credit score isn't exactly correlated to being a good financial steward. Basically a credit score increases with evidence that you can handle credit. Four credit cards and a paid off car loan from years ago isn't a ton of evidence even though you've handled it all impeccably.

mhalley
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Re: How to improve credit score

Post by mhalley » Wed Oct 04, 2017 2:06 pm

I suppose you could take out a loan and then pay it off in a month or so, but I wouldn't do it just to increase your credit score. 13 years is pretty long, I would do the credit karma and double check credit reports for inaccuracies.

kayanco
Posts: 537
Joined: Sat Jun 07, 2014 12:20 am

Re: How to improve credit score

Post by kayanco » Wed Oct 04, 2017 2:35 pm

JBTX wrote:
Wed Oct 04, 2017 1:01 pm
Like i said sign up for credit karma.com. See what it says.
mhalley wrote:
Wed Oct 04, 2017 2:06 pm
I suppose you could take out a loan and then pay it off in a month or so, but I wouldn't do it just to increase your credit score. 13 years is pretty long, I would do the credit karma and double check credit reports for inaccuracies.
I've had Credit Karma for a long time now (and credit sesame) and reviewed both before making the OP. No red flags, nothing stands out. It's consistent with what I already described.

Overall I guess there's not much to do.

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Pajamas
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Re: How to improve credit score

Post by Pajamas » Wed Oct 04, 2017 2:56 pm

Why do you need to improve your credit score? Is there a specific reason?

Seems like having the auto loan and paying all your bills on time is enough and you just have to let time do its work. I had one auto loan and one mortgage and nothing else besides credit cards and overdraft lines of credit and simply paid everything on time always and my score has been well over 800 every time I became aware of it.

When applying for a mortgage, I was told that it was a shame that I had cancelled my American Express card (I no longer used it) as that really looked good on a credit report, but it didn't stop me from getting the best rates.

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Earl Lemongrab
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Re: How to improve credit score

Post by Earl Lemongrab » Wed Oct 04, 2017 3:08 pm

Why are you worried about it? If you plan to get a loan in the near future, don't open more cards. That will put enquiries on your record and temporarily lower your score. For the most part, time. A mortgage helps a lot, but you don't get one just to boost your score.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

123
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Re: How to improve credit score

Post by 123 » Wed Oct 04, 2017 3:18 pm

My only credit records for the last 20 years (since I sold property with mortgage) have been 3 credit cards, each over 20 years old. I have always paid the full balance every month so I've never carried any real credit card debt or paid credit card interest. My credit score, courtesy of a couple of major banks, seems to vary from 820 to 840.
The closest helping hand is at the end of your own arm.

Momus
Posts: 241
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Re: How to improve credit score

Post by Momus » Wed Oct 04, 2017 3:33 pm

My credit score never went past 780 before. Basically pristine 0-1% utilization every month (I charge $1 every cards - I have 7 cards), never a late payment for 10 yrs. Total credit limit 150k. I had auto loan also in the past that is never late, I paid off after 1 yr. It was hovering at 780+ for the longest time.

As soon as I take on mortgage loan, within 2 yrs, it shot up to 830. I think you are in the same situation like me. You will never go past 800 until you have more mixed credit types (revolving, installation and mortgage).

JBTX
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Re: How to improve credit score

Post by JBTX » Wed Oct 04, 2017 4:23 pm

kayanco wrote:
Wed Oct 04, 2017 2:35 pm
JBTX wrote:
Wed Oct 04, 2017 1:01 pm
Like i said sign up for credit karma.com. See what it says.
mhalley wrote:
Wed Oct 04, 2017 2:06 pm
I suppose you could take out a loan and then pay it off in a month or so, but I wouldn't do it just to increase your credit score. 13 years is pretty long, I would do the credit karma and double check credit reports for inaccuracies.
I've had Credit Karma for a long time now (and credit sesame) and reviewed both before making the OP. No red flags, nothing stands out. It's consistent with what I already described.

Overall I guess there's not much to do.
Perhaps you have already looked at it but there is a page in credit Karma that reviews like 8 different credit factors and how you stack up.

kayanco
Posts: 537
Joined: Sat Jun 07, 2014 12:20 am

Re: How to improve credit score

Post by kayanco » Wed Oct 04, 2017 4:57 pm

JBTX wrote:
Wed Oct 04, 2017 4:23 pm
kayanco wrote:
Wed Oct 04, 2017 2:35 pm
JBTX wrote:
Wed Oct 04, 2017 1:01 pm
Like i said sign up for credit karma.com. See what it says.
mhalley wrote:
Wed Oct 04, 2017 2:06 pm
I suppose you could take out a loan and then pay it off in a month or so, but I wouldn't do it just to increase your credit score. 13 years is pretty long, I would do the credit karma and double check credit reports for inaccuracies.
I've had Credit Karma for a long time now (and credit sesame) and reviewed both before making the OP. No red flags, nothing stands out. It's consistent with what I already described.

Overall I guess there's not much to do.
Perhaps you have already looked at it but there is a page in credit Karma that reviews like 8 different credit factors and how you stack up.
Yep, I know the page you are talking about. It's labelled "Credit Factors". There are 6 factors listed: three high impact, 1 medium, and 2 low impact. For me all are green except "Total accounts":
"There's a limited number of accounts on your report
Lenders typically like to see that you've used a variety of accounts responsibly."

And to go to the green column it says 11-20 accounts :D

However, "Total accounts" is listed as low impact.

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grabiner
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Re: How to improve credit score

Post by grabiner » Wed Oct 04, 2017 9:49 pm

JBTX wrote:
Wed Oct 04, 2017 12:36 pm
kayanco wrote:
Wed Oct 04, 2017 8:59 am
I can't say 100% that the score was exactly 750 when I applied for auto loan few years ago. But I remember checking my report and score and thinking that since my score is excellent I would be getting the lowest rate (even at that time I had 0 late, ~3% utilization). But I was given the reason that even though my actual score is very high, I don't have a history of auto loans, so I'm not getting the lowest rate.

Also, I do see this under the section "What's hurting your score":
"You have no recent activity from a non-mortgage installment loan."
(along with the low age factor, which I can't do anything about).
I would get that message and I was fairly close to the highest credit score. I had a car loan briefly years ago but quickly paid it off.

Have you tried credit karma? It will give you some insight as to what is driving your score.
No, it won't, and he already did the right thing. The official credit report listed reason codes which are the actual reasons the score is not higher such as the lack of any installment loans. Credit Karma simplifies everything into one category, such as "number of accounts". You get the same score for five accounts if you have three open credit cards, one closed auto loan, and one open mortgage (a good mix of credit) or one open credit card and four closed credit cards (a poor mix).

I do use Credit Karma, and I have seen my score change several times for factors which do not appear in its criteria. I got a huge jump in my score when I opened a mortgage, even though this added one account (minor positive), one new open account of four (moderate negative, since it decreased my average account age), and one inquiry. And I have a higher score when I have balances on two credit cards rather than three, which is not considered by any of Credit Karma's factors.
David Grabiner

AlphaLess
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Re: How to improve credit score

Post by AlphaLess » Wed Oct 04, 2017 10:42 pm

I used to have a limited number of credit cards, with a couple of them around 15-20 years old, and no mortgage or installment loans. My scores were in the 770-780 range.

Then I started the App-O-Rama scheme, popular in the mid-200s. Initially, my score took a dive to 740s. It stayed lower-ish for a while.

However, once you play the App-O-Rama game for a few years, score recovers.

These days my score is in the 820-830 range. I probably have over 40 credit cards showing, with a bunch canceled.

I think if you keep the average age of your accounts around 7-8 years, you are good.

I have 2 paid off mortgages, and 1 paid of auto loan, but those came much later after I started playing.

I have some relatives who have been in the US roughly the same amount of time.
One of them has had 1 or 2 credit cards, plus an aged mortgage, student loans, etc.
The other has had a lot of credit cards, with good history.

The second person's credit score is much higher.

I think people underestimate how much additional credit lines matter.

You can not create additional mortgage, auto loans, or installment loan lines.

However, you can create as many credit card lines as you want.

Slowly, and responsibly.

JBTX
Posts: 1716
Joined: Wed Jul 26, 2017 12:46 pm

Re: How to improve credit score

Post by JBTX » Wed Oct 04, 2017 11:04 pm

AlphaLess wrote:
Wed Oct 04, 2017 10:42 pm
I used to have a limited number of credit cards, with a couple of them around 15-20 years old, and no mortgage or installment loans. My scores were in the 770-780 range.

Then I started the App-O-Rama scheme, popular in the mid-200s. Initially, my score took a dive to 740s. It stayed lower-ish for a while.

However, once you play the App-O-Rama game for a few years, score recovers.

These days my score is in the 820-830 range. I probably have over 40 credit cards showing, with a bunch canceled.

I think if you keep the average age of your accounts around 7-8 years, you are good.

I have 2 paid off mortgages, and 1 paid of auto loan, but those came much later after I started playing.

I have some relatives who have been in the US roughly the same amount of time.
One of them has had 1 or 2 credit cards, plus an aged mortgage, student loans, etc.
The other has had a lot of credit cards, with good history.

The second person's credit score is much higher.

I think people underestimate how much additional credit lines matter.

You can not create additional mortgage, auto loans, or installment loan lines.

However, you can create as many credit card lines as you want.

Slowly, and responsibly.
This kind of makes sense. I could see how opening new credit cards will ding your scores for a while, but eventually you should recover and maybe even increase it. Plus the more cards you have, the less impact any one additional card would have on your aging.

About the best advice I could give (and again, I'm NOT an expert) is to NOT close any credit cards you have had for a while, unless there is an annual fee associated with it. Many years ago I closed a couple I never used, not really understanding how they help your average credit line age. I think in one case they just cancelled due to lack of use for years. Luckily I still have one that I opened up almost 30 years ago, and i make a point to put some nominal recurring charges on it to keep it active, along with all of our older cards.

kayanco
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Re: How to improve credit score

Post by kayanco » Thu Oct 05, 2017 7:01 am

These are some excellent suggestions and advice. Thanks everyone for your feedback and input. I'm grateful to you all

AlphaLess
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Re: How to improve credit score

Post by AlphaLess » Thu Oct 05, 2017 8:11 pm

JBTX wrote:
Wed Oct 04, 2017 11:04 pm
About the best advice I could give (and again, I'm NOT an expert) is to NOT close any credit cards you have had for a while, unless there is an annual fee associated with it.
Excellent point.

One more tip: even if it has an annual fee, explore changing the card type in a way that: (a) the new one does not have a fee, (b) your credit line continues, i.e., in the eyes of the credit bureaus, it is the same account.

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