Improving credit score?

[Anonymous]

I've got a 650 and I'd like to be over 700. I have some derogatories on my report due to a liquidity crunch while in grad school and a major snafu with my student loans (documentation was mailed to wrong address, I didn't pay for over a year - thought I was still within my grace period). Fortunately, these issues are fixed but the derogatories are still listed. Is there a way to get these removed?

I've been in good shape and paying everything on time for the past 1.5 years. I have zero balances on my credit cards and about $12K in available limits.

What else can I do to get my score up as fast as possible? I make around $100K, I rent, and do not own a car. I autopay everything so I'm always on time.

Any other advice or tricks to get my score up?

[Anonymous]

Also, any advice about these credit "rehabilitation" services or credit counseling? Are these worthwhile to explore or total fucking scams preying upon desperate people?

[Anonymous]

Don't use those services. Your credit is decent. Other than the derogatories, the thing likely affecting your scoare in length of credit history. I would try to dispute the derogatories. There is a chance, given the time that has passed, the company cannot/will not verify all the info and they will be removed.

[Anonymous]

Check out creditboards.com. You'll get much better advice than here on DCUM.

[Anonymous]

I would avoid the "credit rehabilitation" industry at all costs.

I actually used to work as someone that helps develop credit scores. If you are not familiar with how actions affect your score, you should check out "Credit Karma" or "Credit Sesame" online. They are free, and I believe they both have score simulators that will allow you to see what would happen to your score if a particular change was made (e.g., increased the lines, defaulted, closed an account). The scores on these sites won't line up exactly with what you might see from FICO or the bureaus, but all of the scores are built using very similar methodologies. Something else that is good to know: there are literally hundreds of different credit scores that are used by lenders for all sorts of things, so the scores you see reported by your credit card company or through the bureaus are only a small part of the picture. There are proprietary scores for underwriting different types of products (e.g., mortgage, cards), scores that determine whether you get ads for certain types of products, scores for how likely you are to respond to various default-intervention methods, etc.

There are two generic pieces of advice that generally hold true across all consumers for credit improvement: (1) don't go delinquent or let anything ever go to collections (duh) and (2) don't close your oldest accounts, which are likely credit cards. (2) impacts the age of your bureau file, which can have a big impact on borrowers, particularly younger ones.

Anonymous wrote:I've got a 650 and I'd like to be over 700. I have some derogatories on my report due to a liquidity crunch while in grad school and a major snafu with my student loans (documentation was mailed to wrong address, I didn't pay for over a year - thought I was still within my grace period). Fortunately, these issues are fixed but the derogatories are still listed. Is there a way to get these removed?

I've been in good shape and paying everything on time for the past 1.5 years. I have zero balances on my credit cards and about $12K in available limits.

What else can I do to get my score up as fast as possible? I make around $100K, I rent, and do not own a car. I autopay everything so I'm always on time.

Any other advice or tricks to get my score up?

[Anonymous]

The older the negative items are, the less weight they are given. Your use of credit is critical. As other people have mentioned- do not close out old accounts. Try to pay off your balances every month when possible. Also- NEVER charge more than 50% of your limit on any given month (33% is actually the wiser choice). The closer you come to your limit- the more your score drops. Even if you pay if off at the end of the month (it has to do with use of available credit). You can request a copy of your credit report (for free) through https://www.annualcreditreport.com/index.action- not to be confised with the other one that you see commericals on tv about- that is NOT where you want to go. That will take you to all three of the major bureaus (Equifax, Transunion and Experian). You can view all off the actual reports and you can try and dispute the old items at the credit bureau level.

[Anonymous]

Yes, keep away from credit counseling.you've done a great job on your own.The score will go up with time.
Need it fast? Talk to the companies who reported the non-payment or late payment.They might be able to undo some damage, not guaranteed though.

[Anonymous]

Anonymous wrote:The older the negative items are, the less weight they are given. Your use of credit is critical. As other people have mentioned- do not close out old accounts. Try to pay off your balances every month when possible. Also- NEVER charge more than 50% of your limit on any given month (33% is actually the wiser choice). The closer you come to your limit- the more your score drops. Even if you pay if off at the end of the month (it has to do with use of available credit). You can request a copy of your credit report (for free) through https://www.annualcreditreport.com/index.action- not to be confised with the other one that you see commericals on tv about- that is NOT where you want to go. That will take you to all three of the major bureaus (Equifax, Transunion and Experian). You can view all off the actual reports and you can try and dispute the old items at the credit bureau level.

Agree with this but also want to send out a buyer beware about the free report from www.annualcreditreport.com. As we prepared to refinance our home mortgage, I obtained a credit report from Experian using this website. Looked good. Flash forward one month -- the refi lender pulled my credit, and this time an old medical bill showed up as being in collections! Went from easy peasy to major PITA.

[Anonymous]

This may sound slightly controversial, but keeping a zero balance on all your credit cards is not how to maximize your credit score. Use your cards conservatively and carry a small balance (not more than 25% of available credit on any account). Obviously, this is not the way to minimize your expenses since some interest charges will occur. Credit bureaus increase scores based on responsible use of credit, not for non-use of credit.

Do a Google search on maximizing your FICO score -- there is a lot of content out there by people who actively experiment to optimize scores. Other positive items include not closing credit cards (particularly your older accounts), minimizing new credit inquiries, having at least one auto/installment loan, and having a mortgage account.

[Anonymous]

Anonymous wrote:This may sound slightly controversial, but keeping a zero balance on all your credit cards is not how to maximize your credit score. Use your cards conservatively and carry a small balance (not more than 25% of available credit on any account). Obviously, this is not the way to minimize your expenses since some interest charges will occur. Credit bureaus increase scores based on responsible use of credit, not for non-use of credit.

Do a Google search on maximizing your FICO score -- there is a lot of content out there by people who actively experiment to optimize scores. Other positive items include not closing credit cards (particularly your older accounts), minimizing new credit inquiries, having at least one auto/installment loan, and having a mortgage account.

This is why fico scores are sooooo stupid !

[Anonymous]

Anonymous wrote:

Anonymous wrote:The older the negative items are, the less weight they are given. Your use of credit is critical. As other people have mentioned- do not close out old accounts. Try to pay off your balances every month when possible. Also- NEVER charge more than 50% of your limit on any given month (33% is actually the wiser choice). The closer you come to your limit- the more your score drops. Even if you pay if off at the end of the month (it has to do with use of available credit). You can request a copy of your credit report (for free) through https://www.annualcreditreport.com/index.action- not to be confised with the other one that you see commericals on tv about- that is NOT where you want to go. That will take you to all three of the major bureaus (Equifax, Transunion and Experian). You can view all off the actual reports and you can try and dispute the old items at the credit bureau level.

Agree with this but also want to send out a buyer beware about the free report from www.annualcreditreport.com. As we prepared to refinance our home mortgage, I obtained a credit report from Experian using this website. Looked good. Flash forward one month -- the refi lender pulled my credit, and this time an old medical bill showed up as being in collections! Went from easy peasy to major PITA.

Your lender probably pulled from equifax or transunion.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The older the negative items are, the less weight they are given. Your use of credit is critical. As other people have mentioned- do not close out old accounts. Try to pay off your balances every month when possible. Also- NEVER charge more than 50% of your limit on any given month (33% is actually the wiser choice). The closer you come to your limit- the more your score drops. Even if you pay if off at the end of the month (it has to do with use of available credit). You can request a copy of your credit report (for free) through https://www.annualcreditreport.com/index.action- not to be confised with the other one that you see commericals on tv about- that is NOT where you want to go. That will take you to all three of the major bureaus (Equifax, Transunion and Experian). You can view all off the actual reports and you can try and dispute the old items at the credit bureau level.

Agree with this but also want to send out a buyer beware about the free report from www.annualcreditreport.com. As we prepared to refinance our home mortgage, I obtained a credit report from Experian using this website. Looked good. Flash forward one month -- the refi lender pulled my credit, and this time an old medical bill showed up as being in collections! Went from easy peasy to major PITA.

Your lender probably pulled from equifax or transunion.

Mortgage Lenders pull from all three and use the middle score. If you are just checking your Experian- you are potentially missing stuff on Equifax and Transunion.

[Anonymous]

Closing your oldest account will make your score go down is a MYTH! Shocked at how many people still believe this and a "credit counselor" above saying the same. Positive tradelines remain on your credit for 10 years. Negative 7. I'm not saying you need to close or keep anything specific open, but don't think closing an older account is going to make your score go down because of the lost age. The only thing that could make it go down because of less available utilization. But even that's not always going to happen.

[Anonymous]

Anonymous wrote:This may sound slightly controversial, but keeping a zero balance on all your credit cards is not how to maximize your credit score. Use your cards conservatively and carry a small balance (not more than 25% of available credit on any account). Obviously, this is not the way to minimize your expenses since some interest charges will occur. Credit bureaus increase scores based on responsible use of credit, not for non-use of credit.

Do a Google search on maximizing your FICO score -- there is a lot of content out there by people who actively experiment to optimize scores. Other positive items include not closing credit cards (particularly your older accounts), minimizing new credit inquiries, having at least one auto/installment loan, and having a mortgage account.

Thanks for this - I'm the OP.

I've disputed some of the negative items on my credit reports related to the delinquent student loans. I explained that the loan repayment documents were sent to my parent's old address, so I never received them and thus they went into delinquent status. Unfortunately, this was for 6 separate loans all provided by the Department of Education, so it looks like I have a lot of adverse accounts on my report. Hopefully I can get some (or all) of these removed from the reports, however I'm not holding my breath. But it doesn't hurt to try!

I've also got an installment loan than is directly debited from my paycheck, so that will help. This is a newer line of credit.

Finally, I'll be sure to use my credit cards a few times a month for lunch and pay off immediately. That's good advice. Ever since I paid down my CCs, I've stopped using them.

I'll be sure to research some of the credit score optimization strategies I find online.

[Anonymous]

There is a company that you can hire to bombard the credit agencies with letters asking them to remove the bad stuff. If they don't respond within a certain amount of time, they they have to remove them. I don't recall the name, but you can Google.