How do I improve my credit score with the following secnario?
Sphlinkette asked:
I have established credit however, currently the only items that are open on my credit are my mortgage, student loans, and a credit card with a SMALL limit! All other items are either paid off or charge offs. Other than paying my open stuff on time what can I do to improve my credit score?
Rodney
I have established credit however, currently the only items that are open on my credit are my mortgage, student loans, and a credit card with a SMALL limit! All other items are either paid off or charge offs. Other than paying my open stuff on time what can I do to improve my credit score?
Rodney
Tags: Credit Loans, How Do I Improve My Credit Score, Improve Credit
March 25th, 2011 at 2:51 pm
There are several factors which effect your score. Another big area is paying your bills on time…
March 28th, 2011 at 1:45 am
Looks like all you have to improve is your credit card usage.
Mortages are installment loans – ok for credit – so are student loans.
Credit cards are revolving debt – you have to make sure you don’t reduce your rating.
Things to remember:
Any time you use more than 30% of your available credit limits you are reducing your score.
Ex: $500 limit – never use more than $150 a month.
Money Magazine had this number at 20% (last month’s issue).
Some people believe that carrying balances on a credit card is good for you.
Nothing, but nothing could be further from the truth.
To get those top 800+ scores (eventually) – you must pay in full each month.
Credit card companies make money from your purchases.
They don’t need your money from the interest you pay.
Every time you charge something the merchant pays 2% to 5% of your transaction to the credit card company.
So if you use your card for the things you need – you keep the card company happy.
Credit cards report to the bureaus on the closing date.
The date they send out your statement in the mail.
If you think your balance is going to be more than 30%, make an extra payment before that closing date. Note that you can always overpay a credit card if you think you will be spending a lot the next month.
After paying in full for 6 months, ask your credit card company to give you a credit limit increase. You will get approved.
Go get those top scores – these charg offs and other items will be off your reports in less than 7 years. You could easily see yourself with top scores if you play the credit card game right.
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March 31st, 2011 at 3:27 am
Pay off your smallest balance charge offs first. Charge offs really hurt your credit, but when you pay them off they show up as a paid charge off, which helps your score a lot. And if you have a $100 dollar charge off it hurts your score almost as much as a $5000 so pay the little ones off first.
April 2nd, 2011 at 11:28 pm
Make sure you never max out your card, that’s the best thing in your situation. High balance to limit will lower your score.