How to improve my scores?

Discussion in 'Credit Talk' started by jenners, Jun 20, 2012.

  1. jenners

    jenners New Member

    I am at a loss as to what to do do improve my credit score. Right now I am at about 648. And I monitor it regularly and it has gone up over the past year but not by much. I feel like I am doing everything right but my score is not budging. I am not sure how to proceed..

    Right now all that is on my credit is two medical bills, totaling $400, that I am going to get completely paid off this week. My student loans which are being paid on as agreed and I have never missed a payment on. The new car we just bought in December, and a store card that I got last year. I got the store card thinking that having a bit of revolving credit on my account would help. The credit limit is low but it just went up a few months ago and that increase is showing on my reports. It also has no balance on it.

    Many years ago when I first pulled my report there were more medical bills on there. Nothing major, just a few medical bills totaling around $800. I paid all of those off years ago but they are still showing on my report, but as closed accounts with no balance. I know I need to pay off the two new medical bills that are currently showing on my report. But I don't know what else I need to do to improve my score. My loans are all in good standing and I make my payments on time. Does the amount of my debt negatively affect my score, even though those accounts are in good standing? With the car and my student loans, I owe about $32,000.

    I guess my question is, am I doing something wrong or should I just continue to make my payments on time and pay down my debt? I would really love to work on my credit scores in hopes of refinancing our new car eventually to get a lower interest rate. I thought I was doing everything right but nothing seems to be helping.. Any advice would be greatly appreciated.
  2. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    How are the old medical bills showing up on your credit reports? Are they listed as collections, charge-offs, both? Based upon the information you've given us, those are most likely what's holding your FICO scores back in the mid 600s. It sounds like you're doing everything else right at this point.

    The student loans and auto loan should be doing nothing but helping you, as long as you continue to make payments on time. Don't worry about the size of the loans either, as that amount doesn't really matter. What matters is that you continue to build positive payment history by making on-time payments.

    I would also consider adding another non-retail credit card to the mix as well. Check out some credit cards for fair credit like the Capital One Cash Rewards card, which is quite popular and has a pretty low annual fee of $39. Use it sparingly for 6-12 months, keeping your credit utilization low, and it should help give your FICO scores a boost in the long run.
  3. jenners

    jenners New Member

    Both of the medical bills are in collections.

    Before we got this new car, I had another car loan that I was paying on for 3 years. So I feel as if I have been sitting on these loans, paying them off like I am supposed to for years now and my credit is still not considered "good". I had considered getting a credit card but was unsure if that would help or hurt my credit. I got the store card and financed our wedding bands with it because I thought it might help. The balance was paid off within a few months and has not been used since. So would having a credit card that actually got used monthly be more beneficial? I just worry about having too much on my credit.
  4. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    The main problem with financing things like a wedding band on a retail card is it generally does major damage to your credit utilization ratios. What happens is they offer you a credit limit that's basically equal to what you will be spending for the ring. That maxes out your card as soon as you buy the ring, and then it can take quite awhile before you're able to get your CU ratio down to an acceptable level again.

    Having a regular credit card on hand that you would use for monthly expenses and then pay off in full each month will definitely have a positive effect on your FICO scores. There's no need to worry about a few credit cards being "too much". That's just not the case.

    Also, regarding the medical collections, see if you can find out whether the debts have been assigned for collection or actually sold to the CA. If they've only been assigned/transferred, you may be able to convince the medical provider to pull your accounts back so you can work out payment directly with them.
  5. jam237

    jam237 Well-Known Member

    Another thing to consider, in how are the medical records showing in your CR.

    Are they properly annotated as MEDICAL records? If not, you have a potential HIPPA violation that you could use to get the OC to be more cooperative.

    Even though HIPPA violations aren't individually actionable under HIPPA, you may be able to use other sticks, and the threat of administrative enforcement for HIPPA violations can be a major stick!
  6. jenners

    jenners New Member

    Thanks for the advice. My credit has gone up since getting the store card, so so far it has not harmed me. But it doesn't seem to be helping like I thought it would. Would a secured credit card be as beneficial as a regular credit card? Or would it be worth trying for a regular credit card. As I am not sure if I would qualify for one.
  7. cathyG

    cathyG Well-Known Member

    your credit score is right on the border of bad and fair credit, so it may be easier for you to be approved for a secured credit card. a secured card shouldn't affect your fico score differently than an unsecured card, but underwriters or potential employers doing manual reviews (like if you were applying for a mortgage) may see that you have a secured credit card (could cause hike in APR).

    if you have the funds to set aside as collateral and you'd rather not risk getting denied for an unsecured card, i'd apply for a secured card and use that for a year or so. by then, with good payment history, you should be able to apply for an unsecured card for fair credit.
  8. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    A secured credit card can be as beneficial as a regular credit card, as long as it's used properly. As mentioned, you are right on the cusp of fair credit, so it's tough to say if you could get approved for a fair credit credit card at this point. The safest route would be to use a secured credit card for 6 months or so, and then your FICO scores should be in a better position to secure a regular unsecured credit card.
  9. 007 Credit Agent

    007 Credit Agent New Member


    Don’t expect the credit score to jump up within a day or two. It generally takes 6 to 12 months at the very least. If you wish to get your credit score on your own, here are a few steps you need to follow:

    • Pay attention to your credit report: Now that you know why the credit report is so important, you understand why it is important to ensure that it is error-free. What you need to do is to check it regularly. Once you do so, you can easily find the errors to rectify them. In case the errors are severe yet disputable, you can always approach the concerned credit bureau for rectification.
    • Clear all missed payments: Missed payments mar your credit score considerably. You’d want to remove this blemish as soon as possible. This you can do by clearing all current payments.
    • Gets disputes resolved: If you have any disputes on financial matters, credit report errors, missed payments, etc. get them resolved. Once done, ensure that your score does not get tarnished by these instances again.
    • Get a secured credit card: If you want to build your credit score, one of the most effective ways to do so is by getting a . To get this, you have to make a security deposit. All activities on the card affect your credit score.

    Hope this help you!
  10. jshimmer

    jshimmer Well-Known Member

    I know this is an 8 year old thread that someone else dug back up, but this statement is largely incorrect. If you have a credit card and it never shows activity (always a zero balance because you pay it off every month), that's not an indicator that you've taken on debt and repaid it "as agreed". Believe it or not, carrying a reasonably small balance on the card is BETTER for risk scoring than having month after month of Balance = $0.
  11. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    I know this is a few years old now, but this is really a credit scoring myth that continues to live on for some reason. Carrying a small balance won't give you any kind of extra boost to your FICO scores. It's always best practice to pay credit card balances in full each month.
  12. Sophia Varney

    Sophia Varney New Member

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