How to improve credit score?

jenna8984 · January 2015

I know a lot about finances and how credit scores work. I already do everything perfectly-

100% on time payment history
little to no inquiries
almost 10 years since first account opened
under 10% utilization rate (high limits with low balance)
good mix between mortgage, auto, credit cards
credit card balances paid in full each month

My score is 780 which I thought was so good. Then my brother told me that his is 835 and now I'm pissed! How can I get mine that high when I already do everything right?!

bethsmiles · January 2015

Maybe he's been building his credit longer?

jenna8984 · January 2015

bethsmiles said:

Maybe he's been building his credit longer?

Yea, he's only a year older than me so he would have gotten his first card/loan around the same time as me. Maybe a year longer but nothing substantial.

novella1186 · January 2015

bethsmiles said:

Maybe he's been building his credit longer?

This, and the number of accounts you have opened. I had a financial adviser tell me that around 15 lines of credit in my name is good and I only had like 7? (This includes student loans, credit cards, car loans, mortgage, etc).

There's all kinds of dumb random things that affect it too, like if you don't use your credit cards enough, your debt-to-income ratio, etc

JCbride2015 · January 2015

I thought 780 was really good.

I just almost posted about this because I'm super pissed about mine. My teeth are the terrible gift that keeps on giving. My score dropped over 50 points from around 6 months ago! I realized the reason is that the CareCredit payment plan for my teeth basically is a maxed-out credit card on my credit report. So now I'm utilizing about 40% of my total credit, and that line of credit is almost up to its limit for obvious reasons. Blarf. I know it will be paid off within less than a year and hopefully I'll see a score jump after that. And I don't need to buy a car or a house or anything in the meantime. But it makes me grumpy.

Also, I'm 27 and have had some kind of credit card since I was 18. But still, on every credit report, "Length of credit history" is the only negative factor (up until now that I'm using too much credit with the teeth thing). Really, TransUnion? 9 years isn't long enough for you to stop docking me for that?

theartistformerlyknownas · January 2015

I wouldn't worry about it. Your score is really good... and your brother might be lying.

jenna8984 · January 2015

@jcbride2015 uuuugh that totally sucks with your CareCredit. At least you won't be buying a house or anything soon so that's the good part, but it still is frustrating that something you've worked on has to get penalized. I bet it will jump after you pay it and your utilization goes back down. Same with me, I track mine on credit.com and I have "A" in every category except a "C" in length of time. Like what the hell, 9 years is only a C?!

@lolo883 True, thanks. He is a jerk but I really don't think he's lying. My dad raised us like mini Suze Ormans so I know even though he's a flake, he's perfect with paying bills lol.

flyingfoxes · January 2015

Credit scoring is bullshit. I have 2 marks on mine, one says that there are too many personal accounts on my profile, and the other says I don't have enough accounts in good standing (all of my accounts are on time and have been for over 15 years). I think they use any excuse to ding your reports.

rcher912 · January 2015

780 is awesome, whether your brother's is higher is moot. Anything over 700 is something to be proud of, and over 750 is just fabulous.

That said, I was once told (by the mortgage guy I worked with), that creditors actually like to see one or two credit cards that aren't paid in full every month (but that you have less than 50% of available credit used). He told me to use my one small retail credit card to buy some clothes, and just pay the minimum every month. (I think he said it was just so they can see/verify that even when you do have to carry a balance, you do so responsibly). He said it'd up my score (which was between 700-750).

JennyColada · January 2015

JCbride2015 said:
Also, I'm 27 and have had some kind of credit card since I was 18. But still, on every credit report, "Length of credit history" is the only negative factor (up until now that I'm using too much credit with the teeth thing). Really, TransUnion? 9 years isn't long enough for you to stop docking me for that?

I'm 30, and 12 years isn't long enough either!

I wonder what the cut off is.

JCbride2015 · January 2015

JennyColada said:

Also, I'm 27 and have had some kind of credit card since I was 18. But still, on every credit report, "Length of credit history" is the only negative factor (up until now that I'm using too much credit with the teeth thing). Really, TransUnion? 9 years isn't long enough for you to stop docking me for that?

I'm 30, and 12 years isn't long enough either! I wonder what the cut off is.

----------------

I'm sure whenever we hit the proverbial cutoff, we will instantly be dinged with "approaching senility, may forget to pay bills."

jenna8984 · January 2015

Thanks! You guys have made me feel better about my score

mrscaty · January 2015

If you aren't a member of CreditKarma, I'd highly recommend it. It's a free site, you just have to see ads for credit cards and such on the site. They can give you your full credit report each month for free, as well as a list of how you can improve your score. They also have a tool that you can see how changes would affect you (I "added" a car loan before we purchased to see if my score would go up or down [it stayed the same]).

novella1186 · January 2015

mrsgoldfish said:

If you aren't a member of CreditKarma, I'd highly recommend it. It's a free site, you just have to see ads for credit cards and such on the site. They can give you your full credit report each month for free, as well as a list of how you can improve your score. They also have a tool that you can see how changes would affect you (I "added" a car loan before we purchased to see if my score would go up or down [it stayed the same]).

I have some beef with CreditKarma. It's not accurate at all. It's nice to have a general idea of where your score is, and it's nice how it tracks your loans and whatnot. And I agree, the thing where it says how you can improve your score is really useful.

However. It told me that my credit score was 756. That same day I applied for a mortgage and told the mortgage guy that my score was 756. He pulled a hard inquiry and my average score was like 714 or something. With one of the bureaus it was as low as 709. It was super embarrassing to me because not only was my score lower than what I thought (and what I had told the mortgage company) but I also felt like it made me look like I had lied on purpose. I don't know where CreditKarma got the 756 number but it did not match any of the three reporting bureaus, and was not an average of the three.

Just a heads up.

lyndausvi · January 2015

I use myfico.com

There are a lot of things that effect your credit. Like your balances should be less than 10% of your overall credit AND individual card needs to be less than 10% too.

For example:

card 1 bal - 0 Limit 5000

car 2 bal 600 Limit 1000

So even though you are under 10% for your total balance compared to your overall credit limits, card 2 will bring you down for using 60% of the available credit.

flyingfoxes · January 2015

JennyColada said:

Also, I'm 27 and have had some kind of credit card since I was 18. But still, on every credit report, "Length of credit history" is the only negative factor (up until now that I'm using too much credit with the teeth thing). Really, TransUnion? 9 years isn't long enough for you to stop docking me for that?

I'm 30, and 12 years isn't long enough either! I wonder what the cut off is.

I'm 38 and I don't see that as a qualifier on my credit score any more. I'm not sure when it dropped off, but I remember if was on there for years. I've had my MC for 20 years now with the same company and apparently that never counted for anything. My score is above 750 so I'm not concerned, it just seems as though there will always be SOMETHING they list as a reason to ding you.

LabLove86 · January 2015

I think this is interesting - PP have said ranges from 10% - 50% . . . .whereas I have heard balances less than 40% of total open credit is optimum. . . . . . . and I am sure every broker/creditor you talk to will have a different take.

The last time I had my credit checked it was high 700's . . . . . it will be interesting to see what it is when Fi and I go to get pre-approved for a mortgage in a few months

ohannabelle · January 2015

JCbride2015 said:

JennyColada said:

Also, I'm 27 and have had some kind of credit card since I was 18. But still, on every credit report, "Length of credit history" is the only negative factor (up until now that I'm using too much credit with the teeth thing). Really, TransUnion? 9 years isn't long enough for you to stop docking me for that?
I'm 30, and 12 years isn't long enough either! I wonder what the cut off is.

----------------

I'm sure whenever we hit the proverbial cutoff, we will instantly be dinged with "approaching senility, may forget to pay bills."

That is exactly what happens.

(The sad thing is, if I saw this on my credit report, I'd probably say, Yep, they know me.)

sophhabobopha · January 2015

Credit scoring is stupid. I'm 19, and mine's 651. It'll do.

lyndausvi · January 2015

Remember scores are forever changing and they do not have a memory. I have a score monitoring. I'm always seeing jumps and drops.

Because of xmas shopping my cards were/are reporting high balances than normal at the beginning of Dec which lowered my scores. I've some paid the balances in full already and I just saw a bump today.

I often use my cards and then pay all but one of current balances BEFORE the statement is cut. Not the statement balance. That way those cards will post a zero balance on the credit reports even though I've actually used them. One card I will leave a balance of 10% or less to be reported. Then I pay that balance long before interest kicks in.

I learned that from myfico.com message boards. I have found that it did increase my scores more than when I was simply just paying off my balances after billing. The scoring companies have no way of knowing you are paying off the balances every month. One day a month the credit cards companies simply just send them what the current balance is on that particular day.

velvethelicopters · January 2015

Mine is 790, but it went up when I had debt. Got me on how that worked. I had to use my CC to upgrade plane tickets getting home with twins, that hurt cost wise.

huskypuppy14 · January 2015

jenna8984 said:

I know a lot about finances and how credit scores work. I already do everything perfectly-
100% on time payment history
little to no inquiries
almost 10 years since first account opened
under 10% utilization rate (high limits with low balance)
good mix between mortgage, auto, credit cards
credit card balances paid in full each month
My score is 780 which I thought was so good. Then my brother told me that his is 835 and now I'm pissed! How can I get mine that high when I already do everything right?!

Is your brother older? Your credit history is still relatively new. My husband has credit score in the 800 while mine is around yours. He's older so he has more credit history, even though I have more credit and higher limits. Don't worry about, 780 is still really good.

Bubblegum5586 · January 2015

rcher920 said:

780 is awesome, whether your brother's is higher is moot. Anything over 700 is something to be proud of, and over 750 is just fabulous.

That said, I was once told (by the mortgage guy I worked with), that creditors actually like to see one or two credit cards that aren't paid in full every month (but that you have less than 50% of available credit used). He told me to use my one small retail credit card to buy some clothes, and just pay the minimum every month. (I think he said it was just so they can see/verify that even when you do have to carry a balance, you do so responsibly). He said it'd up my score (which was between 700-750).

I have also heard that having a CC balance is important.

theartistformerlyknownas · January 2015

bubblegum1309 said:

rcher920 said:

780 is awesome, whether your brother's is higher is moot. Anything over 700 is something to be proud of, and over 750 is just fabulous.

That said, I was once told (by the mortgage guy I worked with), that creditors actually like to see one or two credit cards that aren't paid in full every month (but that you have less than 50% of available credit used). He told me to use my one small retail credit card to buy some clothes, and just pay the minimum every month. (I think he said it was just so they can see/verify that even when you do have to carry a balance, you do so responsibly). He said it'd up my score (which was between 700-750).

I have also heard that having a CC balance is important.

I've heard this too. It's easy to charge a pack of gum every month and then pay the bill off - that doesn't do much to demonstrate creditworthiness for something larger, like a house. Paying off a major purchase over several months, on time each time, is a more "telling" track record.

That's rude that they told you to carry a balance on a retail card though; those have such high interest rates!

Maggie0829 · January 2015

lolo883 said:

bubblegum1309 said:

rcher920 said:

780 is awesome, whether your brother's is higher is moot. Anything over 700 is something to be proud of, and over 750 is just fabulous.

That said, I was once told (by the mortgage guy I worked with), that creditors actually like to see one or two credit cards that aren't paid in full every month (but that you have less than 50% of available credit used). He told me to use my one small retail credit card to buy some clothes, and just pay the minimum every month. (I think he said it was just so they can see/verify that even when you do have to carry a balance, you do so responsibly). He said it'd up my score (which was between 700-750).

I have also heard that having a CC balance is important.

I've heard this too. It's easy to charge a pack of gum every month and then pay the bill off - that doesn't do much to demonstrate creditworthiness for something larger, like a house. Paying off a major purchase over several months, on time each time, is a more "telling" track record.

That's rude that they told you to carry a balance on a retail card though; those have such high interest rates!

This. I would never carry a balance on a retail card just to increase my credit score. I certainly don't want to pay extra for a pair of jeans and a sweater (interest rate) just to get my credit score a bit higher when it is already at a really good level. So not worth it.

ShellD13 · January 2015

I've heard the bit about carrying a small balance for a few months as well. The other thing that I haven't seen anyone mention is your address. Have you moved a lot (own vs. rent) has your brother moved around as often does he own, etc...

At any rate, 780 is an awesome score and any bank, mortgage company, store, etc...is probably drooling to get your business. :-)

theartistformerlyknownas · January 2015

FYI I just checked mine and I don't have the ding about a short credit history anymore. I got my first card when I was 18, and I'm 31 now. So it does eventually go away.

photokitty · January 2015

I have an 835, it dropped 5 point bc on an inquiry which I was duped into with a bate a switch HELOC by PNC...long story still pissed. It hasn't budged in 6 months, but DH who was in the high 500 hundreds when I met him has seen his rise by 5-10 points every month since we got him out of dept.

Paying off your balance each month isn't always going to help your credit, but if you have home, auto and school loans that carry a balance then paying of your CC every month is not going to hurt. Residence does factor in, I only have 2 residences on my credit score.

One thing to look into is your credit to income ratio. If you have a lot of high limit cards, even if you are only utilizing 10% or less it can affect your score. You are a risk bc you could max them out and not be able to cover the minimums based on your income.

All and all, 780 is awesome!! It's not easy to get above an 800 and it makes you a crazy person (or at least I am) protecting it so it doesn't fall. The higher you get, the more a point or two means to you.

lyndausvi · January 2015

lolo883 said:

bubblegum1309 said:

rcher920 said:

780 is awesome, whether your brother's is higher is moot. Anything over 700 is something to be proud of, and over 750 is just fabulous.

That said, I was once told (by the mortgage guy I worked with), that creditors actually like to see one or two credit cards that aren't paid in full every month (but that you have less than 50% of available credit used). He told me to use my one small retail credit card to buy some clothes, and just pay the minimum every month. (I think he said it was just so they can see/verify that even when you do have to carry a balance, you do so responsibly). He said it'd up my score (which was between 700-750).

I have also heard that having a CC balance is important.

I've heard this too. It's easy to charge a pack of gum every month and then pay the bill off - that doesn't do much to demonstrate creditworthiness for something larger, like a house. Paying off a major purchase over several months, on time each time, is a more "telling" track record.

That's rude that they told you to carry a balance on a retail card though; those have such high interest rates!

I've read a lot on this subject. They are not really saying keep a running balance that requires you to pay interest. They are say show that you are using the card.

Once a month the credit card company will send a snap shot to the agencies. This will simply say your current balance (which is different than your statement balance), if you are current with your bills and how long you have had the account open. If your balance one month is $500 and the next month $600 they have no idea if you paid off the $500 and charged an additional $600 or if you just charged an additional $100. Either way to them your utilization has gone up, which is bad. Now if you never use your cards then it will always have a zero balance. Oddly, that is bad too. They prefer to see just a small balance one card and 0's on the others.

It's a little game that most people don't have to worry about until it's time to get a mortgage or car. Right now DH and I are looking for a house. So now I'm playing the game to keep my scores as high as possible. If I use a card I will pay the current balance before the statement is cut, that way a zero balance is being shown. One card I will allow a small balance to show, then I pay it after it was reported but before the due due to avoid the interest.

Once we buy the house I will stop playing the credit card balance game and just make sure my bills are paid in full and on time.

princessofgenovia · January 2015

I have no idea what my credit score is. I feel like an unsuccessful adult right now.

But I'm gonna guess it's not super great. I have one credit card and had one small car loan that I paid off very quickly. My parents were bad with credit cards, and both have sucky credit they're trying to improve. But their sucky credit skills, made me terrified of ever having a credit card/carrying a balance of any kind. I try to pay off everything as quickly as possible.

FI and I are looking at homes to buy, and it makes me nervous about how much of a loan we'll take out. Even thought IT'S TOTALLY NORMAL. And most people don't pay cash for their houses. I'm like "But, but, shouldn't we buy something we could pay off in like 2 or 3 years" and he just kisses me and tells me it's ok.

I just can't wrap my brain around it. I'm great with money. I'm shit with credit.

plainjane0415 · January 2015

I have a 775 credit score, and I thought that was pretty awesome! Now I'm beginning to wonder! I wouldn't worry too much about your score right now @Jenna8984, as PP have stated, your brother could be fibbing, could have more credit out there than you do, several different factors are going into account there. I really wouldn't worry because your credit score is top notch! I've always heard anything above 750 is excellent.

How to improve credit score?

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