I am 31 years old and I guess up until the last year I have never really been concerned with my credit. I make pretty good money and have no real issues with paying my debts that I have accumulated over the years. However, I am attempting to buy a house so i figured now was the time to check my credit and get it cleaned up. I checked it on Credit karma and it shows my score as 610. I have one delinquent cable bill totaling $218 from a year ago that I had forgot about. Also, i have 2, 30 day late payments from about 6 months ago, one for a installment loan on $44 and the other for a credit card bill. Other than that, everything is showing as paid, i do have a high credit utilization amount (60%) but I am paying that down big time and have not used credit in probably 6 months. My question is, it it better to pay down credit card debt (i have about $6000 in debt) or pay off my installment loan of $1900. I am looking to buy in the next year and VA loans require a 640 or better. Thanks for the help
Welcome to Creditnet! Pay down your credit card balances as fast as possible. Getting your CU ratio under 10% will have a much greater positive effect on your FICO scores than paying off the installment loan. Also, just keep in mind that the Creditkarma score is a "FAKO". It's not your real FICO score, but it should be somewhat close.
Pay down your credit cards instead of the your auto loan for sure. Keep the balances at 10% or less of the credit limit just like Josh said. There is another way to increase your credit score as well. Ask a family member or friend to add you as an authorized user to one of their credit cards. Just make sure they have a perfect payment history and can maintain a low balance on their credit cards (10% or less of the credit limit). The longer the payment history and the higher credit limit the bigger the boost your will see from the card. Thanks! Heather with BoostMyScore.NET
You could try to talk the Cable Company into a "Pay for Delete" on the past due bill and try to talk the Credit Card and Installment Loan into "Good Will" Removals since you have been current for the 6 months since. Never hurts to ask.
Thanks, i did attempt a pay for delete with verizon but they said they didnt do that. I guess the reason for my confusion is why my credit score is sooo bad. I always pay all my bills on time, just those 2 little discrepancies about 7 months ago. Other than that, everything is paid on time and shows as such. I recently got a credit line increase from Barclays from $1000 to $2000 without requesting it so i feel like im on the right track just wishing I could do something about it. I make over $135k a year so my income to debt ratio is neglible. Any thoughts?
Income doesn't always get reported to the CRAs, so the credit report doesn't always comprise of the debt:income ratio.
As jam mentioned, income is not a factor in your FICO scores. Also, the Verizon bill, 2 late pays, and a high credit utilization ratio is more than enough to really hurt otherwise good credit scores. Unfortunately, it really doesn't take much.
Pull your real credit reports and purchase your score. My creditkarma TU score was 622 and when it was pulled by the bank it was 685. There could be a big discrepancy there.
