improving credit score?

[pinknic38]

Okay so I have asked about everyone I know how to work on my credit score and I get a different answer from everone, so I thought I might post my dilemmas on ehre and see what you kids have to say.

My credit score is less than desirable to say the least. Shit I am 22 years old and when I was in college I treated my credit cards like free money. This is a bad idea.

Anyway I've got everything more than under control, paid stuff off closed some stuff down but I think my student loans are killing my credit score. I don't pay on them, they're in deferrment until I am out of the military completely but still show up on my credit score.

I have a car which I've financed and I pay on... I started paying about $75 more than the minimum payment each month thinking that might increase my credit score. I've kept one credit card open, which I have had since 2003, just for emergencies, but I have only a very small balance on it.

When I come back from Afghanistan in March-April I will have enough money to pay my Jeep off, but I don't know if that will help my credit or not. I have the means to keep paying on it no problem if I need to, but I don't know if making the payments helps the credit more or paying it off completely.

I had one late payment in the past year, last October, but I dunno how long these things stay on your score... Really I am concerned because I want to be able to rent an apartment when I move to Columbus next summer, and I know they run your credit to be elligible or whatever.

It's not horrible but it leaves much to be desired I guess, and I want to do all I can here to fix it so when I get back I'll be set... so in ya'll experience/knowledge, what works.... closing accounts with zero blance, or leaving them open? pay of car or keep making payments? spend some on credit card and pay it off each month?

there isn't anything I can do about the student loans, that's just the way it goes. I'm planning on paying about 1/3 of them off when I get back though, despite the deferrment, that way when I do have to start paying, it's not some asinine payment.

late payments aren't even an issue, I have online banking set up with automatic bill pay so everything is set up so all my bills are paid on time.

okay anyway, let me know!

thanks!
nicole

[TheJake]

shit, im more screwed than you! I am at a point now where I can't get a credit card unless I pay an annual fee. Totally jacked myself on that..

[Sijuki]

The late payment will effect it, and will stay on there for 3 years'ish.

When you get back, I would pay off your Jeep, that will be the biggest boost. My credit was terrible and I paid off my car and my credit bounced back enough so that I could actually get a credit card (my car was co-signed by my mother).

On your credit card, if it's possible to charge something small and pay it every month, do that as it shows that you use your credit which is good. Just don't maintain a high balance.

Your FICO Score is based off many many factors. But the big ones are the length of long term debt. i.e. Car/House. If you can finance something and pay it off early you are good. Credit Cards you need to use, but maintain a low balance. Don't pay it off every month, occassionally keep a balance for a month or two, the finance charge you pay is worth the points you earn on your FICO Score.

The only way the loans will count against you is open debt. But being backed by the federal gov't they should not effect you that much.

A big help will be to pay off your car loan. Hope it helps.

[joe7f]

Originally Posted by TheJake

shit, im more screwed than you! I am at a point now where I can't get a credit card unless I pay an annual fee. Totally jacked myself on that..

As long as you are paying the annual fee you might try to get a card that gives you miles or hotel points

--Joey

[TheJake]

find one that does that bro... no such luck

[joe7f]

http://www.continental.com/web/en-US...e/default.aspx

I was thinking of something like that. I think the annual fee is something like 75 bucks a year (I believe I recall you saying you had some Continental miles right?)

--Joey

[lost in texas]

I had a friend (who's a banker) keeping up with my accounts while I was out of the country, and he helped me a lot with getting my credit score up. Part of your situation is similar to what mine was when I came back.

Paying off the vehicle definitely will improve your score. It shows that you were able to pay off a big loan, and also reduces your debt to available credit ratio, both of which are important.

As long as the student loan is deferred, don't pay anything on it (other than a minimum) unless you're completely out of debt already. Student loans have the lowest interest you can get, and it doesn't make sense to pay them down while you have credit card debt or anything else. Actually, making payments (on time) over the longer term is better than paying it off quicker. And although they may consider it in your debt-to-credit ratio, just having it won't hurt your score. Open lines of credit like that can be good.

As far as the credit cards go, having three or fewer is good for your score. If the balances are above 30-35% of your available credit, that will bring down your score. Once you get below that point, you'll see an improvement. Paying off cards completely is OK, but generally it's better to keep a small balance. That shows that you're a "good customer."

If you have late payments on your report, nothing is going to fix that but time. Like Sijuki said, it usually takes 3-4 years.

I'm not an expert by any means, but I've gotten a little experience by taking care of mine. If you have any specific questions or anything, feel free to PM me, and maybe I can help you out or point you in the right direction for better information.

The good thing about being young is that you have plenty of time to get it right. Assuming you handle everything well from here on out, you can be in really good shape within a few years!

[expatben]

part of me thinks being a backpacker will mean having bad credit In all seriousness I am currently getting my credit score rated because I am going for a job at a bank...eep!

[pinknic38]

thanks for the good info guys! how much can my score improve over like 9 months? I just don't want to be unable to rent an apartment because of my credit, but I don't think my score is like THAT bad... I dunno. and I ran my credit report through a mycreditreport.com type deal and like my credit card hadn't updated my info since like spring 2006 which is like... bull shit... so maybe that one isn't right.

is there an "official" place to run your credit score?

[jengt]

There's a site that allows you to view your credit report through all 3 major credit reporting agencies in the US once a year for free.

www.annualcreditreport.com

I've used it a couple of times. You have to pay to see your FICO score, but you can see all of your creditors & what they're saying about you for free.

[lost in texas]

I'm using truecredit.com. You get all three reports and scores for $15. It's a monthly service, so it alerts you when your score or something on your report changes. If you just want to get the scores you can just cancel after the first month.

IMO, the free sites aren't worth it. They tell you what info is on your report, but don't give you the actual scores- which is really all that matters when people run your name.

[pinknic38]

doesn't it ding your credit every time you run it?

[joe7f]

^I think so, but people are checking it all the time (every unsolicited credit card offer) and that dings it too.

--Joey

[marc873]

Yep, every inquiry shows on your credit report. You should always keep them to a minimum. As for credit cards, I have always heard that if your balance is too low, like 1500.00 on a card with a 5000. limit, the amount of availble credit can hurt you too. I always "try" to keep my C.C.'s at the middle ground balance. The best thing I have heard, is to keep the accounts with the longest amount of time open. That shows your history. And proves your ability to make payments on time etc....

[maracle]

Checking you credit will not decrease your credit score, they fixed that a while ago. Only credit checks from people who are considering giving you credit can reduce your score now. So when you check your own credit or someone checks your credit without you asking it will show up on the report but it doesn't matter at all towards your score (which is really all that matters anyway).

If you pay a few bucks to get your FICO score it'll also tell you the three biggest negative factors in your score. Its not always what you would think so knowing the biggest negatives might help you improve it. Since everyone's score is for different reasons its hard to give general advice, this is a great way to find out exactly what is the problem for you.

One way that can really help your score is to have a long history, if your parents have good credit you can get added as an authorized user on their credit cards and it'll help your score. I did read a few weeks ago that they may try to adjust their formula to account for this but so far it should still work.

Also, you might want to check out boards.fool.com. They recently became free and their board "Credit Cards and Consumer Debt" has a lot of people that really know their shit. They can offer really good advice on improving credit, getting credit, paying off debt, etc.

[Sijuki]

As stated above, there are two different types of inquiries into your credit report. There are those that do not show up on your report (except for you to see): When you check it, an unsolicited offer, or when a current creditor does a review. Only when you ask for credit do they show up. These should be kept to no more than 3 in a year.... more preferably 1 or 2 a year.

If you google for credit report sites and look for one of the more credible ones, those will usually give you all 3 reports, scores, and monitor.

After 9 months, if you pay off the vehicle and pay down a fair amount of debt it should improve a decent amount. Once I paid my car off I went from like a 515 to a 570 in a matter of a couple months.

[lost in texas]

Just wanted to confirm what maracle and sijuki said, the only time a score request is marked on your account is when it's something you initiate, like applying for a new account or renting an apartment. Checks other people do without your knowledge, or checking your own credit through one of the official bureau sites (like truecredit.com) does not count against you.

Talking to one of the managers at your bank could be helpful too. There's a lot of misinformation that gets passed around about how things work, it's always better to hear it from the pros then amateurs like us. :D