Ways to increase credit score | TigerDroppings.com
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The Calvin
New Orleans Saints Fan
Member since Jun 2013
5240 posts

Ways to increase credit score

I just turned 24 and have decent credit score but only have barely 2 years of open credit accounts--my parents helped me stay away from credit cards while I was young

Will the lack of time on open credit lines deter me from getting a good deal on a purchase? Or if they just go by score and lack of derogatory marks like late payments?

Also do I need to get a gas card and pay like 100 bucks a month on it to help inch my score forward?

Sorry I am naive in this area, thought y'all could help


LSUtigerME
LSU Fan
Walker, LA
Member since Oct 2012
1244 posts

re: Ways to increase credit score
Time will help the most.

What are you trying to buy? A house, or a car (or similar)?

If you have some CCs, you shouldn't need anymore right now. Maybe request a limit increase if it's low now. Important things to score are negative marks, debt/credit ratio, and credit history/length. Just focus on making timely payments and no negative marks.


The Calvin
New Orleans Saints Fan
Member since Jun 2013
5240 posts

re: Ways to increase credit score
I'm looking at trading in for (and subsequently paying on) a vehicle sometime next year and was hoping I could get a decent rate--maybe even a 60 mo. Term?

I know it to have at least some credit history so I will open a card or two right away, albeit not making big purchases(maybe the gas card like shell)


Chris Farley
Maryland Fan
Regulating
Member since Sep 2009
3823 posts

re: Ways to increase credit score
Get a couple credit cards, pay for all of your normal expenses with them and pay it off monthly. Request a credit increase on each card every 6 months.

This is better than using a debit card for multiple reasons:
1. Helps your credit
2. If your card is stolen/hacked, you can take it up with the cc company and not be out any cash
3. Gives you a month of breathing room in some kind of emergency situation where you need cash quick (car repairs, hospital bills, etc)
4. You can gain better rewards on a cc. I pay a $75 annual fee on my AMEX and took home about $600 in cash rewards last year, only by using it for my normal expenses.


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ZereauxSum
LSU Fan
Lot 23E
Member since Nov 2008
10176 posts

re: Ways to increase credit score
quote:

Sorry I am naive in this area, thought y'all could help


Never apologize for trying to gain some knowledge

Like you suspected, the main thing working against you is the low average age. Only time can fix that.

The next thing is your mix of credit but you shouldn't worry about that. Just use your cards, never ever ever be late and pay them off completely to avoid fees/interest.

You'll be fine when you go to buy the car


The Calvin
New Orleans Saints Fan
Member since Jun 2013
5240 posts

re: Ways to increase credit score
Thank you all for the responses


I'm learning


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bayoubengals88
Wisconsin Fan
LA
Member since Sep 2007
5302 posts
Online

re: Ways to increase credit score
quote:

Just use your cards, never ever ever be late and pay them off completely to avoid fees/interest.


It's best to leave a 5-10 percent balance when trying to boost your credit score.
On Sunday I searched through every credit card/Roth/savings/down payment thread on this board in the past three months.

A ZERO balance drops your credit score.

ETA: once the balance exceeds 10 percent your credit score drops incrementally.
This post was edited on 3/20 at 9:54 pm


ZereauxSum
LSU Fan
Lot 23E
Member since Nov 2008
10176 posts

re: Ways to increase credit score
quote:

A ZERO balance drops your credit score.

ETA: once the balance exceeds 10 percent your credit score drops incrementally.


Do you have a link for this? Not flaming I've just never heard this before.

It's counter intuitive because lower credit utilization (total balance/total available revolving credit) actually helps your FICO score.


bayoubengals88
Wisconsin Fan
LA
Member since Sep 2007
5302 posts
Online

re: Ways to increase credit score
Like I said, I probably looked at 100 threads, and it seemed to be a consensus. I do remember a graph. The sweet spot was around the 5% range for best credit scores.
I'll look for it.


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bayoubengals88
Wisconsin Fan
LA
Member since Sep 2007
5302 posts
Online

re: Ways to increase credit score
From a myfico PDF
quote:


In some cases, having a very small balance without missing a payment shows that you have managed credit responsibly, and may be slightly better than carrying no balance at all.


Found it. Image: http://blog.creditkarma.com/wp-content/score_graph.png
This post was edited on 3/20 at 10:15 pm


LSUtigerME
LSU Fan
Walker, LA
Member since Oct 2012
1244 posts

re: Ways to increase credit score
Carrying a balance does not mean having to pay interest. You simply want a small balance reported to the bureaus.

I offset my 100% payment about 10 days. That puts my statement balance (what gets reported) only around $500, where my monthly balance may be $4000.


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ZereauxSum
LSU Fan
Lot 23E
Member since Nov 2008
10176 posts

re: Ways to increase credit score
OK I'm with you know. Like LSUTigerME said, showing utilization doesn't necessarily mean keeping a balance, there just needs to be a balance (preferably a small one) when the CC company reports to the credit bureaus, which they usually do regularly once a month.

So if your CC company reports on the first, you may want to pay your card off around the last week of the month so that you have a small balance to show when the first rolls around.


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mglsu21
LSU Fan
Prairieville
Member since Jun 2012
889 posts

re: Ways to increase credit score
quote:

From a myfico PDF


Yes, having a reported 1-10% balance:limit ratio does give you a slight bump, but not nearly the difference that is being shown in that graph. There have to be other factors with the 0% that have to be bringing the 0% scores down....like derogs, dormant cards, etc.

All the simulations I've run on my credit show about a 5-10 point (from 740-750ish) jump from 0% utilization to 9% utilization. I mean saying 0% utilization gives you the same score as someone with 40% utilization? C'mon Credit Karma, that's just ludicrous.
This post was edited on 3/21 at 6:55 am


htownjeep
LSU Fan
Nassau Bay, TX
Member since Jun 2005
6514 posts

re: Ways to increase credit score
quote:

The Calvin

How is your parent's credit? If it's good, ask your Dad if he has an old credit card that has excellent payment history that he could add you on as an authorized user. That will help you with your length of credit. Just make sure it doesn't have anything like late payments on it or it won't help that much. I've got my 19 yr old son up to a credit score over 750 by doing just that.


LSUChamp06
LSU Fan
Lafayette
Member since Nov 2007
2418 posts

re: Ways to increase credit score
When my wife and I bought our first house years ago, she had a a credit score of 600. Meaning she had no credit, not bad, not good, just none.

Our finance lady had her get a credit card, buy a blu-ray, pay half of it one month, and then pay it off the second month. In two months the score went from 600 to 640.


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JonTheTigerFan
LSU Fan
Central, LA
Member since Nov 2003
4898 posts

re: Ways to increase credit score
quote:

All the simulations I've run on my credit show about a 5-10 point (from 740-750ish) jump from 0% utilization to 9% utilization. I mean saying 0% utilization gives you the same score as someone with 40% utilization? C'mon Credit Karma, that's just ludicrous.


I think I was the one who posted that graph originally to show that there is a hit to your score when you have the zero balance. I agree with you that it's not as pronounced as that graph shows on your FICO score. I think this graph shows what your Credit Karma score does with different utilization.

I played around with mine a LOT while having my house built and monitored it via ScoreWatch at MyFico.com. I got the highest score when I left a very small (less than 10%) balance on ONE card while having zero balances on all the others.


mglsu21
LSU Fan
Prairieville
Member since Jun 2012
889 posts

re: Ways to increase credit score
quote:

I played around with mine a LOT while having my house built and monitored it via ScoreWatch at MyFico.com. I got the highest score when I left a very small (less than 10%) balance on ONE card while having zero balances on all the others.


Exactly. 1 card with less than 10% and the others with no balance yielded the best score.

Of course like we have both said it is such a small difference. If you are doing the right things like spending responsibly, paying off balances each month, keeping good average age of credit, and never missing payments then your score will be where it needs to be to get credit at a great rate.

Sometimes people put too much emphasis on a score and not the good habits that get you there. I mean 750-760 almost always get you the same rate as 800.


Ace Midnight
LSU Fan
Between sanity and madness
Member since Dec 2006
38923 posts
Online

re: Ways to increase credit score
quote:

Sometimes people put too much emphasis on a score and not the good habits that get you there.


A good credit score is the result of good credit habits, not the goal.


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ZereauxSum
LSU Fan
Lot 23E
Member since Nov 2008
10176 posts

re: Ways to increase credit score
quote:

Sometimes people put too much emphasis on a score and not the good habits that get you there. I mean 750-760 almost always get you the same rate as 800.


I agree with this

If you use your credit responsibly and are neither reckless nor overly cautious you usually will have an excellent score within a few years' time.


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