Here's the deal. I work a full-time job but haven't had any raises or anything in a while due to the economic conditions. Creditwise, not doing so hot. I have one major card, but that card is about 3/4 full. Plus I have a couple of school loan defaults from being stupid a few years ago that are still on record for another couple of years, including one that is a charge-off (what a pain in the a$%!) So, you guessed it, my credit availability is in the tank. A buddy of mine that works at a bank in town was talking to me about the importance of debt ratios...credit amount you carry versus the credit line you have. He said either pay down or extend your lines to help your credit score. On the flipside, I do have a condo that I'm paying a mortgage on but that's at 6.5 percent. I can re-fi for 4.75 if I can get my credit score up. Getting that condo payment down is key because my income is running REALLY tight. I was told by my broker that I was not too far off but those credit issues are hurting me. I have about 50-60 points to go with a 590 at present. So I've looked around for credit cards, no go. Secured ones, nah...my bank won't give me a huge line at all, a few hundred bucks and it costs too much for something so small. My best friend had different credit issues a while back but tried out this place online for shopping that extended a pretty large line of credit to him for next to nothing. He's used it to increase his credit availability and reduce his ratios down to boost his score. In fact, it's a place online called Enchanted Attire. So my question is...yes, I'm paying my credit card I have now down, and I'm working around those defaulted school loans through re-consolidation. Now that i'm doing that, I just need a quick way to boost my score. My best friend said that using his account at Enchanted Attire had a positive impact on his score (something like 60 points in 8 months). What do you guys think? JG
The first thing you have to do is pay down the balance on your existing credit card to 10% or less. If you can pay it off completely and keep your balance at zero, then that's even better. Do whatever you can to pay that down, since as your banker buddy was telling you, your credit utilization ratio accounts for a large chunk of your FICO score (about 30%). Of course, keep paying your mortgage on time as well. Payment history is the only other factor that has a larger impact on your credit scores. I would steer clear of online shopping sites that promise large lines of credit. If you're worried about fees for secured credit cards, these types of cards often have huge up front fees and big monthly fees as well. I'm not familiar with enchanted attire, but I keep a close eye on the credit card market and I've never heard of them before. My guess is the fees will be worse than secured cards and you usually can't even use their card anywhere other than their website to make purchases. They may not even report your payment history to the credit bureaus. Do you have a spouse/relative/close friend that would be willing to add you as an authorized user on one of their oldest cards with a high credit limit in good standing? That, coupled with knocking down your CU ratio under 10% may give you the 50-60 points you need.
