1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.
Dismiss Notice
You must be a registered member in order to post messages and view/download attached files in this forum.
Click here to register.

What is the best way to increase your credit score?

Discussion in 'Coffee Break and Community Discussion Forum' started by Nikki, Aug 12, 2015.

  1. Nikki

    Nikki Well-Known Member

    Joined:
    Jul 31, 2015
    Messages:
    268
    Likes Received:
    141
    Trophy Points:
    42
    Location:
    Maine
    Hello All -

    I've been working hard on my credit in order to get a home loan.

    After sending letters to all three credit bureaus, clearly away debt by doing it the right way and paying it, I am still left with a pretty low score.

    I do have a few more small items to remove, but I've been 100% on-time with my payments for my car loan.

    It clear that I need more revolving credit - I do not have any credit cards and I do not qualify to get one. Would a secured credit card work? Would this help me bring up my score?

    I have a small personal loan through my credit union, which again I am 100% on-time with the payments. Although, I do not see the loan being reported on my credit report yet. Should I bug my bank and ask them to report it?

    Right now, I am using Credit Karma (I've heard good and bad stuff about this app, but it does seem helpful and its free).

    You're thoughts are much appreciated with this :)

    - Nikki
     
  2. PaulJSmith

    PaulJSmith Well-Known Member

    Joined:
    Jul 30, 2015
    Messages:
    107
    Likes Received:
    113
    Trophy Points:
    42
    Location:
    Midwestern USA (STL area)
    On of the dirty little secrets of credit score ratings is that every time someone runs a check it depletes your score a little. A co-worker of mine just went through this while looking at several houses through several banks and realtors. While they were all busy checking and rechecking his score, it was decreased significantly. Be careful with this.
     
  3. Eric Twiname

    Eric Twiname Well-Known Member

    Joined:
    Jul 31, 2015
    Messages:
    329
    Likes Received:
    232
    Trophy Points:
    42
    Location:
    Northeast USA
    No expert here...so take these as things to consider, not facts.
    Even with that, I've been out of that industry long enough that some of what I write may be outdated.

    Things to consider:
    1. The amount you COULD borrow (credit limits) counts against you.
    2. If you have open lines that you don't use...close them.
    3. revolving credit behavior counts for you...your question about the secured card...yes, and use it..and pay it off in full every month.
    4. exception to #3...make the minimum payment one month...then pay it off. the amount you revolved over the month counts for you.
    5. every time someone looks at your credit report...it counts against you (including you looking at it yourself through credit karma)

    The credit score is a measure of risk...
    do you pay your bills on time?
    How many bills to you have, and how well do you pay them on time...the more paid on time, the higher the score.
    Can they make money from you?
    If you don't revolve credit, the lender didn't make money off you...your score goes down.
     
    Jennifer Kirley, PaulJSmith and Nikki like this.
  4. Beachman

    Beachman New Member

    Joined:
    Sep 1, 2015
    Messages:
    2
    Likes Received:
    2
    Trophy Points:
    2
    Location:
    Indiana
    Jennifer Kirley and Nikki like this.
  5. Eric Twiname

    Eric Twiname Well-Known Member

    Joined:
    Jul 31, 2015
    Messages:
    329
    Likes Received:
    232
    Trophy Points:
    42
    Location:
    Northeast USA
    Good info from Beachman...

    All the same, the idea that your credit score determines your credit-worthiness is in itself a myth. Credit score is one of many tools that can be used to determine if a loan is made, and at what rate.

    It may indeed be that "soft inquiries" do not affect the numerical score anymore...I don't know...they used to.

    I have personally turned down a credit application (25 years ago) because there were 20 self-inquiries. When you look at your own report that many times, you're typically trying to hide something and are therefore higher risk.

    In the same manner, multiple inquiries from anywhere that do not have a matching credit line open on the same report begs the question, "Why did THAT company turn them down?" and raises your risk. {Think "timeshare" promo meeting...any time you give your name and address during a sales pitch, they are running your credit report}

    Keep firmly in mind that credit is a statistics game...good credit scores can default on loans, and bad ones may pay on time...when it comes to applying for a loan, you cease to be a person, and become a statistical risk/reward scenario. Arrange your behavior prior to application in light of that.
     
    Nikki and Candi1024 like this.
  6. MCW8888

    MCW8888 Well-Known Member

    Joined:
    Aug 17, 2015
    Messages:
    642
    Likes Received:
    198
    Trophy Points:
    42
    Keep up the good work. And be patient.
     
    Nikki likes this.
  7. Candi1024

    Candi1024 Well-Known Member

    Joined:
    Jul 30, 2015
    Messages:
    129
    Likes Received:
    83
    Trophy Points:
    27
    Location:
    Pennsylvania
    And remember that it just takes time as well.
     
    Nikki likes this.
  8. Nikki

    Nikki Well-Known Member

    Joined:
    Jul 31, 2015
    Messages:
    268
    Likes Received:
    141
    Trophy Points:
    42
    Location:
    Maine
    Thanks everyone. I truly appreciate your feedback and advice. I am currently creating a budget - attempting to stick to it as much as possible - and I should be able to pay off these debts little by little. In a couple months I have a plan to get a secured credit card - I plan to use it only for gassing up my car and yes I will pay it off completely each month.

    I've been digging into this credit stuff for a number of years now and have learned a lot. And even more lately with all of your help.

    Thank you so much.

    Hopefully within the next 6 months or so I will be showing you all pictures of my new home :) *fingers crossed*
     
  9. Emmyd

    Emmyd Member

    Joined:
    Jul 31, 2015
    Messages:
    38
    Likes Received:
    38
    Trophy Points:
    17
    Location:
    Tennessee
    One other thing to consider, if you are in a small town, forge relationships with 1 locally owned bank. Once they get to know you, they may be more willing to work around the issues with your credit score. Also, credit unions are good places to go as well. Keeping my fingers crossed for you!
     
    Andy Nichols and Nikki like this.
  10. Tom Waite

    Tom Waite Member

    Joined:
    Aug 3, 2015
    Messages:
    45
    Likes Received:
    33
    Trophy Points:
    17
    Location:
    Grand Rapids Michigan Area
    Best way to increase your credit score that I have found - don't have credit. Reduce the availability of credit and this will improve the score - too much available revolving credit will work against you. Get rid of the CC and close store accounts etc.
     
  11. Nikki

    Nikki Well-Known Member

    Joined:
    Jul 31, 2015
    Messages:
    268
    Likes Received:
    141
    Trophy Points:
    42
    Location:
    Maine
    So a quick update and question on this - so I got myself a secured credit card - and holy smokes - a month later and my score has jumped 15 points!

    So my question.... Is it possible to get approved for a home loan if you still have a little debt in collections? If you have the required credit score, and you have the employment history needed... can you get approved for a mortgage?
     
  12. Andy Nichols

    Andy Nichols Moderator Staff Member

    Joined:
    Jul 30, 2015
    Messages:
    5,086
    Likes Received:
    2,553
    Trophy Points:
    112
    Location:
    In the "Rust Belt"
    Probably, but rates won't be favorable. I used to arrange car purchase financing and banks charged higher % interest rates on those with "hiccups" in their credit history... After the financial meltdown, getting a mortgage has become tighter without some equity being brought to the table.
     
    Nikki likes this.
  13. Candi1024

    Candi1024 Well-Known Member

    Joined:
    Jul 30, 2015
    Messages:
    129
    Likes Received:
    83
    Trophy Points:
    27
    Location:
    Pennsylvania
    My experience has been no, but I didn't shop around either.
     
    Nikki likes this.
  14. Nikki

    Nikki Well-Known Member

    Joined:
    Jul 31, 2015
    Messages:
    268
    Likes Received:
    141
    Trophy Points:
    42
    Location:
    Maine
    Thanks Guys... That's what I thought... The debt isn't much... Maybe $2,000.00 total.. But I really want to get the ball rolling on this so I thought I would ask.
     
  15. Andy Nichols

    Andy Nichols Moderator Staff Member

    Joined:
    Jul 30, 2015
    Messages:
    5,086
    Likes Received:
    2,553
    Trophy Points:
    112
    Location:
    In the "Rust Belt"
    If you are in some remediation program, like "Take Charge America", that can also help. They negotiate a better CC interest rate and payment over time to get "out from under" and that's viewed favorably.
     
    Jennifer Kirley and Nikki like this.
  16. Nikki

    Nikki Well-Known Member

    Joined:
    Jul 31, 2015
    Messages:
    268
    Likes Received:
    141
    Trophy Points:
    42
    Location:
    Maine
    Thanks Andy!
     
  17. Jennifer Kirley

    Jennifer Kirley Moderator Staff Member

    Joined:
    Jul 31, 2015
    Messages:
    1,071
    Likes Received:
    722
    Trophy Points:
    112
    Location:
    USA
    Nikki likes this.
  18. Nikki

    Nikki Well-Known Member

    Joined:
    Jul 31, 2015
    Messages:
    268
    Likes Received:
    141
    Trophy Points:
    42
    Location:
    Maine
    Yeah I checked out every program under the sun. I didn't qualify for many because of my income. At this point, I am aiming for First Time Home Buyers.
     
    Jennifer Kirley likes this.
  19. James

    James Active Member

    Joined:
    Aug 31, 2015
    Messages:
    50
    Likes Received:
    13
    Trophy Points:
    7
    Location:
    Oklahoma
    I would encourage some patience as well. I had no credit but paid off a used vehicle loan and within a couple years my score was in the 700s without even trying. Granted I didn't have debt first but the idea was similar, pay the debt off and get a vehicle paid off. I think in the long run you would be happier with a slight delay for better monthly payments.
     
  20. Jennifer Kirley

    Jennifer Kirley Moderator Staff Member

    Joined:
    Jul 31, 2015
    Messages:
    1,071
    Likes Received:
    722
    Trophy Points:
    112
    Location:
    USA