Everyone, I have basically cleaned up my credit reports and I am now embarking on phase 2 of the credit repair process: raising my credit score further. I no longer have any negatives, but my scores remain in the mid 600's due to debt/limit ratio's, length of history, etc... My question is, what in the world do I do to raise my scores beyond 700? I have some authorized user accounts on my reports, and I also have a few of my own credit card accounts and a personal loan on my reports. One thing I am doing is getting rid of as much debt as possible. Yesterday, I paid of my JC Penney and First Premier Cards, but I also closed the accounts. Should I have done this? I am now reading that this may have hurt my debt/limit ratio. I am confused as to what actions to take that will increase my scores. Should I pay all accounts off one by one, or just get each one to 50% of limit? This is so perplexing, and I am worried that I will do things that will hurt, rather than help. Any ideas?
One suggestion I have for you would be to get your ratio's below 50%. Dropping them to 50% probably isn't enough to boost your scores. Also, don't start closing accounts as soon as you get the balance to zero. Especially not if it's your oldest tradeline. Also, each time you close out a credit card, you're reducing your overall limits by the x amount of credit line you had with that now closed card. For example: Consumer has 2 c.c.'s 1 w/ $1000 limit, 1 w/$2500 limit, both have $500 charged to them each. Well, if you pay off the smaller limit card, then close it, instead of only utilizing approx. 14% of your total credit, you're now using 20%. (and that's closing the smaller line, closing the larger line would put you at 50%, yikes!) Not a HUGE difference (between 14% and 20%), however, you can see why leaving some tradelines open will help keep you from utilizing too much of your credit.
I think it was Marie who posted that if you close MORE than 2 accounts within, I believe, 6 months, that your score will take a hit. Since you just closed those accounts, if I were you, I'd call and ask them to reopen them - since it was just a few days they very well might. Then I'd leave them at $0 and just use them to boost your available credit and therefore, your score. Plus if they are somewhat old tradelines, it'll up your average age of accounts. George gave me the idea a while back of reopening an old account (10 years old). All I did was call and *poof*, they reopened the account, no cr was pulled and I had some extra available credit to boost my score. I only received a few points from it, but those few points add up. Ozzy.
thanks mindcrime.... The two accounts I closed were small accounts. Each about 250 bucks. The larger accounts are still open. I will pay them off and then leave them open. That ought to help. By reducing below 50%, are you talking about just below, or more like 20-40%? I may concentrate on taking each account down to those levels and then go from there. Also, wouldn't there be an argument that carrying debt reduces credit score? The authorized accounts I have on my reports are positive, but they also carry hefty balances. I could remove these accounts and that would instantly take thousands of debt off the reports. Would this be a good idea? I have other positive credit so that isn't a concern. Also, all of the AU accounts were opened in 2000, so they aren't that old...
Ozzy, thanks for the advice. I will call them tomorrow and see if I can't get them back open. Hope I didn't shoot myself in the foot...
What about paying off installment accounts? As soon as these are paid off, they are closed by definition. I'm assuming that credit card accounts are the main accounts taken in the credit score?
Ozzyburger, You mentioned: >George gave me the idea a while back of reopening an old account (10 years old). All I did was call and *poof*, they reopened the account, no cr was pulled and I had some extra available credit to boost my score. I only received a few points from it, but those few points add up.< i'm just starting out TU 612 before 3 deletes, now 595 and EX 613. EQ = who knows. I want to start rebuilding by attempting to reopen a JC Penney account I had for almost 30 years before I filed Ch 13 in '94 which I decided not to go through with and had dismissed. JCP was named as a creditor. The account shows up on TU as unrated under the positive section. I'm wondering if JCP would consider reopening it, even though there are other negs on my CRs. I thought about asking them without them pulling an inquiry or possibly doing a PFB thing with a low starting amount such as $250-500. Any ideas?
