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.

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.

Thank you all for the responses


I'm learning

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.

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.

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.

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.

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.

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.

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.