How to make our credit better???

[daisy1234]

Our credit score dipped down 100pts in a years... WE oly had 2 late bills which were 1-4 days late. and we opened some new cards? we have a Home equity line of credit still opened for 52,000. What should we do...close cards or will we get dinged for that????

 

[Crystal824]

Never close credit cards. It lowers your debt to avaliable credit ratio, which is bad. To improve your credit score, you should always pay the bills on time and try to get some debt paid off.

 

[minnie1928]

My guess is that the thing hurting your credit is the age of your credit, since you opened several new cards this year.

Continue to pay your bills on time, don't open any new cards and your score should bounce back just fine.

 

[disneysteve]

Our credit score dipped down 100pts in a years... WE oly had 2 late bills which were 1-4 days late. and we opened some new cards? we have a Home equity line of credit still opened for 52,000. What should we do...close cards or will we get dinged for that????

As noted, average age of credit matters. By having new cards, you've lowered your average. It could actually help to cancel the newest card as it would increase your average age, though it would also change your credit utilization ratio.

The best way to improve your score is to pay your bills on time. Having "only" 2 late payments is 2 too many. It wrecks your score and increases your interest rates.

Also, if you carry a balance on your credit cards, keep the balances below 30% of the credit limit. So if you have a $5,000 limit, don't ever charge more than $1,500 to that card.

 

[girli565]

Don't close cards. That will just drop you down more points because you will have less available credit. Just pay on time and maybe charge and PIF (pay in full) a few times to show usage. I find that when I stop using my cards for a few months my score seems to waver 20-50 points. But when I started charging my satellite, cell phones and Blockbuster monthlies on certain cards and then PIF my score would jump 10-30 points.

 

[sbell111]

Why are you guys that fixated on your credit score? Why is it not a good idea to get rid of those credit accounts and use actual money that you own to buy stuff?

 

[minnie1928]

Why are you guys that fixated on your credit score? Why is it not a good idea to get rid of those credit accounts and use actual money that you own to buy stuff?

Because your credit score isn't simply for credit anymore. Employers, landlords, prospective insurance companies, etc. They all look at credit scores as a reflection on how you handle your finances as a whole.

I agree that actual money is definitely a good thing, but you can't ignore your score either.

 

[disneysteve]

Why are you guys that fixated on your credit score? Why is it not a good idea to get rid of those credit accounts and use actual money that you own to buy stuff?

Because your credit score isn't simply for credit anymore. Employers, landlords, prospective insurance companies, etc. They all look at credit scores as a reflection on how you handle your finances as a whole.

I agree that actual money is definitely a good thing, but you can't ignore your score either.

True. Also, there can be situations where even though you are paying cash, having a high credit score is to your advantage. Example: A few years ago, one of our vehicles was totaled in an accident. We went to buy another one. We planned to pay cash for the vehicle using the insurance proceeds and some of our own money to make up the difference, but we didn't have the insurance check yet. The dealer checked my credit, found it to be excellent, and let us drive home that day with no money down. It was 2 weeks before we got the insurance check and went back to the dealer to pay for the car. Had we had lousy credit, they probably wouldn't have let us drive that car off the lot without paying a penny.

 

[clarabelle]

I can be a bit disorganized about the bills sometimes. Let me tell you online banking is my friend!!
I pay off my balances monthly -but just in case I get scattered I have an automatic payment of 50.00 (which will usually cover my minimum) on my cards in case I am a day or so late with my full balance. If you can swing something like that -I highly recommend it!

 

[secretpantssam]

I can be a bit disorganized about the bills sometimes. Let me tell you online banking is my friend!!
I pay off my balances monthly -but just in case I get scattered I have an automatic payment of 50.00 (which will usually cover my minimum) on my cards in case I am a day or so late with my full balance. If you can swing something like that -I highly recommend it!

I agree about online banking. It makes all my bills so much easier to view and pay. I also make a list on each month of my calender on my desk which bills need to be paid and I check them when I schedule the payment. That way I never forget or make a late payment!

 

[mmexpress]

Having credit cards and NOT using them will not help your score.
Use a card for some purchases like gas for the car and then pay it off every month, that way there is no interest.
Also alot of companies are closing accounts due to non-use now.

 

[SandrA9810]

When you got the new cards. It hurt you, but give it time and it'll help you.
If you ever make a late payment, call the card company. They'll usually do 2 or 3 "forgiveness" in a rolling year. Once they take that off, it won't reflect on your credit score. But make sure you take care of it immediatly before they have time to report it to the credit agencies.

Bill payment is my friend as well. I set it up at the beginning of each month. I can't do the monthly thing because each thursday is a different date each month, and that's payday.
But the process takes 3 days total. So I set it up for wens, processes on thurs, and friday morning the money comes out. If I set it up for thursday it won't come out till monday because of the weekend.
But it's a total lifesaver, and it keeps me from paying late fees. The bank has also set up e-bill, which they'll recieve a copy of my bill, with balance, min due, and date. So I don't have to check every credit card website.
For me, as long as I don't see the money, I don't want to spend it. That's why FSA with the insurance is great and so is 401k plan, they already get the money before I even see the paycheck.

So many banks are offering free online banking... less work for them. For us it saves us about 10$ a month by doing it all online. So if your bank doesn't do it, try to find another one that does it all.

Ohh and more than the min payment definatly helps, even if you can't pay the balance in full.
We've shredded several high balance cards just to get them paid off, and when they send you a new one when the old one expires, never activate it. It'll also help prevent fraud.

 

[girli565]

Why are you guys that fixated on your credit score? Why is it not a good idea to get rid of those credit accounts and use actual money that you own to buy stuff?

Credit scores are not just for credit cards. A lot of things are based on credit. My firefighter DFi had his credit run twice before he was hired. Landlords run your credit. It's not just for getting lines of credit to buy things people can't afford. Some of us like to have credit available even if we don't use it and pay cash for most everything, like I do. I don't carry balances from month to month. I pay in full but use my credit to my advantage!

Added: I also pay with my CC because I get rewards! Free money for just using a CC?! I'm in!

 

[chemysterygal]

Honestly, the best place I have found for advice on credit is myfico.com. I hope it's alright to post the link here! There are message boards where all they do is discuss how to improve scores, what factors affect scores, etc.

I am a little scared to look at my credit right now as I just opened a new Visa card (to get free shipping through LL Bean - ). I know I will get dinged for the new account, but we haven't opened anything new since our Disney Visa three years ago or so, so how much can it hurt, right?

Good luck, and BTW, what others are saying about credit scores pertaining to a whole lot more than credit, checked with your insurance company lately? Bad credit may cost you more to insure your home, your car, etc. Good credit can save you money on those things. When I checked my credit report, I found that our insurance company was keeping an eye on ours every six months or so!

 

[lisaross]

My Fico Score is pretty high - its 785 is that very good? what is the highest?

I actually open lots of credit cards - just to get the discounts at new stores etc. 99% of the time i pay in full! If by chance i am a day late w/a bill i always call the credit card so they don't charge me a late fee!

Also, i just Closed a bunch of credit cards that i had and don't use - i usually close them after i get my discount - perhaps i should stopand get my credit rating better?

lisa