Fast ways to improve Credit Score?

[The WDW 3]

I have a credit card that I have been slowly paying down for a couple of years. Only $800 left so I will probably pay it off completely this month, that will probably get my score a bit

 

[Kingdome8]

A

 

[4luv2cdisney]

The biggest thing you can do if you already have a decent score is keep your usage of available credit at less than 30% and in general your debt low.

I have a Capital One credit card and they use Credit Wise (free to me). My credit score changes all the time by a few points. I use credit cards for large purchases frequently. When I charge something big, my score goes down as soon as the statement closes. Next month when it is paid off, the score goes back up. We do not carry balances on credit cards.

As someone mentioned, once you get above 760, it really doesn't matter anymore. We used to be at 835+ for years (late 20's - 30's) Now, we don't take out many new loans (occasional car), don't open or close new credit cards, haven't changed our credit limits, basically haven't changed much in a really long time. Our scores bounce around between 820-825 now. We don't get much "movement".

Running my simulator, if I paid off $5000 from my credit card and increased the limit on 1 of my cards by $15K, it says I'd increase my score by 8 points. If I just increase my limit, it goes up by 1 point. So, obviously, paying off balances makes the biggest difference. I must be slightly over 30% utilization this month. And even though it gets paid off every month, I do show a lot of "debt" each month because I consistently charge everything I can on my cards. So, depending on closing dates and amounts, it is not unusual for me to owe 15K or more on my cards. I just happened to look at my Chase account last week and we charged 90K on that card alone in 2020.

 

[The WDW 3]

I only have one credit card and my balance is under 30%. But I have carried a balance for years. My intent is that I will have it 100% paid off in about a month or so. I assume that that will improve my score. At that point my only debt will be a car payment which is always paid on time each month. I haven’t paid ahead and I see a couple things here that’s conflicting if you should or shouldn’t, but it is always on time.

 

[4luv2cdisney]

I only have one credit card and my balance is under 30%. But I have carried a balance for years. My intent is that I will have it 100% paid off in about a month or so. I assume that that will improve my score. At that point my only debt will be a car payment which is always paid on time each month. I haven’t paid ahead and I see a couple things here that’s conflicting if you should or shouldn’t, but it is always on time.

I don't think extra car payments will matter. Mortgage companies will often treat a car payment as "paid off" if it has 10 months or less left to go, but it sounds like you are at the beginning of the loan. That would really only help you get a larger loan anyway.

Credit tiers are not completely universal but 760 usually starts the top tier for at least a good amount of lenders. If 760+ isn't obtainable, then the next tier cutoff is is usually at about 700. So, again unless you are sitting on a 690 trying to break 700, you probably shouldn't stress. Even a score below 700 doesn't mean you won't get your mortgage, but you probably will get a crappy rate. Fortunately, rates are still very good. So, even that shouldn't stress you out too much.

Your mortgage is going to depend much more on your earnings being high enough to afford the house you want to buy, having a large down payment, if the appraisal on the house you're buying comes in at a the right #, how long have you been at your job / in your line of work, etc. (assuming your credit score isn't "bad" as you say.)

Credit score is but a piece of the big picture. Ex: My daughter has a good credit score and a lot of $ in savings for a young adult, but little credit history and she is self employed. I had to co-sign for her car even though she had a sizable down payment and dealership financing is usually pretty easy to get. The car actually increased her credit score some more, but I still have zero hope that she would get a mortgage on her own anytime soon even if she goes in with 30-40% down.

(I'm no expert, but one of my jobs is as a leasing agent. It's not the same as working for a lender, but I have to evaluate peoples credit scores and reports all the time.)

 

[The WDW 3]

I don't think extra car payments will matter. Mortgage companies will often treat a car payment as "paid off" if it has 10 months or less left to go, but it sounds like you are at the beginning of the loan. That would really only help you get a larger loan anyway.

Credit tiers are not completely universal but 760 usually starts the top tier for at least a good amount of lenders. If 760+ isn't obtainable, then the next tier cutoff is is usually at about 700. So, again unless you are sitting on a 690 trying to break 700, you probably shouldn't stress. Even a score below 700 doesn't mean you won't get your mortgage, but you probably will get a crappy rate. Fortunately, rates are still very good. So, even that shouldn't stress you out too much.

Your mortgage is going to depend much more on your earnings being high enough to afford the house you want to buy, having a large down payment, if the appraisal on the house you're buying comes in at a the right #, how long have you been at your job / in your line of work, etc. (assuming your credit score isn't "bad" as you say.)

Credit score is but a piece of the big picture. Ex: My daughter has a good credit score and a lot of $ in savings for a young adult, but little credit history and she is self employed. I had to co-sign for her car even though she had a sizable down payment and dealership financing is usually pretty easy to get. The car actually increased her credit score some more, but I still have zero hope that she would get a mortgage on her own anytime soon even if she goes in with 30-40% down.

(I'm no expert, but one of my jobs is as a leasing agent. It's not the same as working for a lender, but I have to evaluate peoples credit scores and reports all the time.)

I am exactly at 690 trying to break 700

 

[4luv2cdisney]

I am exactly at 690 trying to break 700

Gah! that's really tough! How long do you have to work on it?

 

[The WDW 3]

Gah! that's really tough! How long do you have to work on it?

Well, My girlfriend and I are in the process of splitting up after seven years. I have always rented, and we have been renting together for the past five years. For that reason I am moving and I need to move ASAP. The last thing that I want to do is to get myself into another rental. I would really like to break the rental cycle and finally purchase. I am going to stay at my sisters in the short term while I figure things out, but my goal is to own by the end of the summer. I’ve already been speaking with a mortgage lender, so I have a pretty good idea of where I stand and when I can do. My biggest challenge today is what the current housing market is. I know it’s crazy all over, and certainly in the area that I live, houses are few and far between and the costs have never been higher. I just want to make sure that I I’m able to get the best rate possible, because I’m going to be paying such a high cost right now. From what I understand, breaking that 700 credit score would help.

 

[Judique]

Well, My girlfriend and I are in the process of splitting up after seven years. I have always rented, and we have been renting together for the past five years. For that reason I am moving and I need to move ASAP. The last thing that I want to do is to get myself into another rental. I would really like to break the rental cycle and finally purchase. I am going to stay at my sisters in the short term while I figure things out, but my goal is to own by the end of the summer. I’ve already been speaking with a mortgage lender, so I have a pretty good idea of where I stand and when I can do. My biggest challenge today is what the current housing market is. I know it’s crazy all over, and certainly in the area that I live, houses are few and far between and the costs have never been higher. I just want to make sure that I I’m able to get the best rate possible, because I’m going to be paying such a high cost right now. From what I understand, breaking that 700 credit score would help.

Pay down the $800 to zero. Don't take on any more debt.

Do use your credit card and pay it in full each month and on time.

Continue to pay your car payment on time each month. If it will save you considerable interest, try to get it paid down, but, saving for a down payment is probably a better strategy.

Good luck! My husband and I bought our first house at age 21-22.

You should arrange some kind of rent agreement with your sister, to show that you are making regular housing payments. Don't pay in cash and keep records.

 

[The WDW 3]

Pay down the $800 to zero. Don't take on any more debt.

Do use your credit card and pay it in full each month and on time.

Continue to pay your car payment on time each month. If it will save you considerable interest, try to get it paid down, but, saving for a down payment is probably a better strategy.

Good luck! My husband and I bought our first house at age 21-22.

You should arrange some kind of rent agreement with your sister, to show that you are making regular housing payments. Don't pay in cash and keep records.

staying at my sisters for three reasons.
1. I don’t want to be alone right now.
2. I want time to make the best decision.
3. Save as much cash as possible.

I will certainly contribute to my share of things. I in no way want to be a burden on them, and I will cover myself and contribute, but I’m not looking to make regular rent payments either

 

[afan]

staying at my sisters for three reasons.
1. I don’t want to be alone right now.
2. I want time to make the best decision.
3. Save as much cash as possible.

I will certainly contribute to my share of things. I in no way want to be a burden on them, and I will cover myself and contribute, but I’m not looking to make regular rent payments either

It's not about paying rent per se, but documenting it. The mortgage lender very may well want to know and having had this issue myself years ago on a much simpler no docs loan, I agree with @Judique. I had been living with my parents and not paying rent, lender wanted something saying I had paid rent regularly and on time. I had to bug, and I do mean bug, and old landlord to get it done and it did hold things up a day.

So by that, have an agreement, and do pay something so you can both show that you are paying it. Ask her to save that each month for you and then once you have everything set for the new house she can give it back. But the records of you making regular payments is important.

 

[Judique]

staying at my sisters for three reasons.
1. I don’t want to be alone right now.
2. I want time to make the best decision.
3. Save as much cash as possible.

I will certainly contribute to my share of things. I in no way want to be a burden on them, and I will cover myself and contribute, but I’m not looking to make regular rent payments either

You missed the point.

It's not about free rent from family, or about being alone or any emotional needs, although I certainly understand where you are emotionally.

It's about showing the lender that you responsibly make payments each month.

 

[The WDW 3]

You missed the point.

It's not about free rent from family, or about being alone or any emotional needs, although I certainly understand where you are emotionally.

It's about showing the lender that you responsibly make payments each month.

I’ve been responsibly making payments for years.

 

[ford91exploder]

I’ve been responsibly making payments for years.

It's the break in payments which will hurt your score, There are companies which accept rent and report to the bureaus's they simply forward it to the landlord (your sister) there is nothing preventing her from giving it back to you. It's showing that you got a new rental and are making payments which count toward your score

 

[4luv2cdisney]

Well, My girlfriend and I are in the process of splitting up after seven years. I have always rented, and we have been renting together for the past five years. For that reason I am moving and I need to move ASAP. The last thing that I want to do is to get myself into another rental. I would really like to break the rental cycle and finally purchase. I am going to stay at my sisters in the short term while I figure things out, but my goal is to own by the end of the summer. I’ve already been speaking with a mortgage lender, so I have a pretty good idea of where I stand and when I can do. My biggest challenge today is what the current housing market is. I know it’s crazy all over, and certainly in the area that I live, houses are few and far between and the costs have never been higher. I just want to make sure that I I’m able to get the best rate possible, because I’m going to be paying such a high cost right now. From what I understand, breaking that 700 credit score would help.

So sorry. When my daughter and her long-time boyfriend broke up I think it was harder for me to get over it than it was for her. lol Looking back, it was the best thing that could have happened. Hope it turns out to be the same for you!

Pay off the credit card. Keep using it for random small everyday essentials and keep paying it off every month on time.

Save for the largest down payment and hopefully enough to still have an emergency fund. They don't like to see you putting every penny into the down payment.

Hope you find a great new place and it all goes smoothly! Townhouses and nice, smaller, affordable houses sell in 1 day around here. So, I understand the challenge!

BTW - If things go well at your sisters and you are both happy with the arrangement, maybe you take a little more time to get it all done and that could be perfectly ok! Basically, don't rush into anything if you can avoid it. My 22 yo lets the idea that she "should be out on her own" get to her emotionally sometimes. I understand there can be negative feelings and perceptions about moving back home (or with a relative) for some people. In our household, we are all fine with the situation and that's all that matters. She is a workaholic (definitely not being lazy!), pays her own expenses and is off to a great start with working for herself and learning to save and invest. Frankly, I encourage her to take risks that will be much harder to take down the line and I absolutely love having her here, so I'm glad to be able to help! (See, there I go explaining myself.... I shouldn't feel the need to, but others judgment can be hard!)

Best of luck to you!

 

[The WDW 3]

Ok, I just called my bank and I paid off everything that I owed on my CC. I for the fist time in as long as I can remember have zero balance on my card!

 

[The WDW 3]

So, I have a line of credit with my bank. I don’t owe them anything, and it’s been so long since I’ve used it. But, it is still open. Should I close it, or just leave it as is?

 

[ilikecarrentals]

Here is one thing you can do that I did not see mentioned - become an authorized user on someone else's credit card account who has a really old credit history, a high score and a high credit limit. This should show on your credit score without a hard pull. There are some caveats that are worth checking into before doing this e.g. some banks don't report authorized users.

 

[LYSE]

Fastest way would be if your utilization is high lower it by increasing your credit limits.

 

[MrsPete]

The system is designed to punish quickly and reward slowly

The system /the concept of credit scores is weird. Credit scores are ONLY a measure of whether you're a good credit risk /whether you're likely to pay your bills.

They are NOT a measure of your financial security -- and shouldn't that be your real goal? The long-term answer is, Live frugally, squirrel away money, avoid debt, and invest. Those things will lead to financial security, but they don't always lead to a top-notch credit score.

... My 22 yo lets the idea that she "should be out on her own" get to her emotionally sometimes. I understand there can be negative feelings and perceptions about moving back home (or with a relative) for some people. In our household, we are all fine with the situation and that's all that matters ...

She's not alone. My 23-year old is happily living at home, and we love having her here. She's not been out of college long (obviously), and she's in an entry-level job with an entry-level salary. She prefers living here and packing money into her investment accounts every month -- she has set lofty financial goals for herself and is off to a great start. She's happy, her Dad and I are happy -- yes, that's all that matters.