How Can I Raise My Credit Scores?
I just had a credit check for a loan approval and was shocked that my previous score of 720 fell to 560 while my husbands remaind the same! It was due to two missed payments on our credit line that my husband was responsible but was off in Maui and did not make, along with another payment to wells fargo for same reason. I am so mad. The only other difference is that I have put a few big ticket items on my cards so there is less available credit. Would this cause this. Oh and once I accidently paid my husbands Banana republic card online instead of my own and was 30 days late. Help. How long does it take to raise a score????
Depending on how long ago your late payments were, I'd guess that the balances on your revolving lines are what is hurting you the most. If you can pay them down, you should carry no more than 30% of your available line as a balance but do not pay them off entirely! This actually hurts your score. (long story) The other lates can be disputed to the credit bureaus, put the burden of proof on the lender to verify the entry. You may get lucky and some may not respond and the entry comes off.
Paying off your lines and on time payments will raise your score dramatically over the next 6 months.
Thank you so much for the great info. I will get right to work on all of your suggestions.
What a great board!
Excellent description Nathan!
[addsig]
My lender said a good way to dramatically raise your score is to open an American Express card , use it very little and pay the balance off every month.
Have any of you tried this?
destina:
I've personally never witnessed an AMEX card significantly raise a FICO, and I'm not sure exactly how it could do so JUST by having it. AMEX has a few different types of credit cards. Their original "charge card" which allows their customers to charge anything with no pre-set limit as long as they pay it off in the same month. Having this account has no more value than having a Citi, or Chase account. They are all three top tier companies looking for A - type credits. The only attribute I know of this card to help credit, any more than the other companies, is by reporting the high limit you've charged on the card, while it has no limit.
I know a guy that charges $50k per month on AMEX for his business inventory and because of that, he has very nice ($25,000+) limits with ALLthe other major C.C. companies.
As for paying it of in full each month, your Experian CBR will report ZEROs anytime there is NO balance on a credit card (ANY C.C.) at the date of your closing statement. I've actually witnessed my score improve significantly (15ish pts) due to periodically using some cards! I'm not sure this is a real AMEX credit benefit though, since it can be done with any C.C.
As far as a one of AMEX's other products and how they could help credit more than a Chase, or Citi account, I couldn't even guess.
From my experience, AMEX is not easy to get an approval from. On the other hand I know people that have many AMEX's, lots of C.C. debt, and AMEX keeps sending them special offers. Maybe they've declined me so many times over the years because they don't like my name?
If your lender has another reason how AMEX will dramatically increase your score, I'd really like to know, please post it if you can. Maybe getting an AMEX worked wonders for him individually and he's relating his own experience to you?
Curious.
Thanks.
Thank you Nathan14 for all the great info. I do believe that my score was hurt by two large purchases on two different cards thus limiting my available www.credit.I will pay them down immediatly and really watch this in the future.
And as for AMEXCO being helpful I can only offer that I have two, a gold account that I use for Everything and pay off monthly, and a green that I have had for over 20 yrs and use monthly for small purchases but also pay off monthly. My other cards are a citibank visa and a mastercard and a Bank One visa. I hate citibank!
credit is affected by a couple of things I am a Loan Officer, I see this everyday.
1) length of time with same credit card
2) debt ratio of credit card ex: What you owe compared to the limit of card
3) Lates on a mortgage, credit cards www.etc.etc
4) Collections,carge offs,bankruptcys, Court judgements,tax leins.
The Rule of thumb is: The 50% and below ratio keep your balances below the 50% mark. EXAMPLE lets say you owe $1,000 and your limit is $1,500 you would be over the 50% rule, so keep your balances below that and your score will start going up, if you go the other way then your score will start togo down.
I appreciate all the replies. I consider myself credit savvy, unfortunatly my situation being far from home and on my own money wise has injured my credit. I was more interested in what options I have owning investment property with my dad. If we did a LLC or limited partnership, or something along those lines. What are my best options? Thanks again for the replies...this site is extremely helpful