(Closed) Credit Score

posted 7 years ago in Home
Post # 3
Member
6661 posts
Bee Keeper
  • Wedding: May 2010

Mine seems to only go down (fast) when I miss a payment and never up, so I can’t really answer this well. But I did read on some site once about how to raise it and it was a little discouraging. You can do everything right for years and it only goes up a few points. Things like taking out a mortgage or loan and making payments on time raises it, but not as fast or as much as it goes down if you make a late payment. And it can go really far down, but there’s a cap on how much it can go up per ‘good thing’ you’re doing. Like if you have a mortgage, it can only improve your credit score I think less than 10 points total.

Of course, I only have a vague understanding, but that’s what I found.

Post # 4
Member
1815 posts
Buzzing bee

I was/am in the same boat. My credit got really bad because i got into some legal problems..I didn’t have credit card debt, just couldn’t make my payments on time: car, insurance, cell phone, electric, etc.

I’ve been debt free (besides my car and one small student loan) for two years, and have made all my payments on time, and my credit score is still awful. It’s only gone up like 50 points total in 2 years. However, I haven’t purchased a car, house (well my FH did), or gotten a secured credit card, so I don’t know much about what that would do to better the score. I have heard though, that a secured credit card is the quickest way to go. They can be pretty tricky, which is why I haven’t gotten one 🙁 good luck!

Post # 5
Member
2090 posts
Buzzing bee
  • Wedding: August 2010

To rebuild your credit score, more than anything else, it takes TIME. (I know, it’s frustrating).

Check out the “rebuilding your credit” forum at myfico.com – there’s a lot of good advice there.

If you have not done so already, he should obtain his current credit report. If there are any open collections items, he should deal with those immediately.
Once he has 12 months of no late payments, the old late payments are weighed less (i.e., a 30 day late 3 years ago doesn’t impact your credit score as much as a 30 day late payment 4 months ago does).

Does he currently have any open credit cards? Your score is also based in part on your available credit, so if he can get a secured card and keep the balance low (or keep it $0), that should help to improve his credit score as well.

Car financing can be tricky. There are companies out there who will finance people with score in the 400’s – but the interest is like 15%, so you can end up paying double the purchase price of the car over the life of the loan. Obviously, that wouldn’t be a very smart financial decision to make just to raise his credit score. I have no idea about furniture financing, you should ask them if they report to any/all of the 3 major credit bureaus. Good luck.

Post # 6
Member
7587 posts
Bumble Beekeeper
  • Wedding: December 2010

So FI’s credit score not so great either, so we decided to really focus on it before the wedding so that I was marrying someone with the same credentials as me! LOL. I am obsessed with finances, money, etc.

There are all kinds of things that effect your credit score. The one’s banks care about:

1.Payment History – Paying your bills on time  2. Amount of current debt  3. Amount of New Credit Your recent credit history of new loans or applications 4. Length of Credit History How long you’ve had credit. If you are younger you can’t impact this one. 5. Type of Credit The various types of credit accounts that you have. It’s good to have revolving (credit cards), installment loans (cars), and obviously mortgage accounts.

Now with that said, my Fiance had always paid his credit cards on time, but did have a car reposession on his credit. We paid down all the balances to $0 on his credit cards. Never paid just the minimum due always a lot more. We cleared up every small issue on his credt, like unpaid medical bills and such. We also made a larger payments on his car loans and things in order to lower his debt to income ratio.

Taking out financing will only hurt your credit and not improve it. However, in order to improve credit scores you have to hurt them first. If his credit score is very low applying for line of credit and getting denied will have even a greater negative impact on his credit score. So you need to improve it first. Any financing including furniture will show on his credit and if he is approved, it will hurt him until it’s paid.

Now what can you do with different levels of credit scores here they are first:

280-559 is POOR 560-659 is FAIR 660-724 is GOOD and 760-850 is EXCELLENT

You can get most high interest credit cards with a credit score over 600. You can get a car loan at 650. You can get a base homeloan at 680 and in order to get a good rate you need a 700.

Fiance started with a 540 and now has a 669. It took about 6 months to get it there.

Does that help at all or did I make it more confusing?

Post # 7
Member
11325 posts
Sugar Beekeeper
  • Wedding: February 2011

Is there any way he could call some of his old creditors? I know it might be too late. But, I’ve had the situation a couple times where I missed a payment because I just simply lost track of the bill or never got it (i used to move around a LOT and so sometimes my target bill or something wouldn’t find me). Every single time I’ve ever missed a payment I’ve been able to call the company, pay, and then ask them to take that off my credit report. The longest period I ever did it though was prob 90-120 days after my missed payment so I know it might just be too late to do that. 

Post # 9
Member
11325 posts
Sugar Beekeeper
  • Wedding: February 2011

Just to slightly disagree about the whole taking new credit is bad thing… it is true that it makes companies nervous when you open up a new credit card, but sometimes even though it hurts your credit a LITTLE to do this it can help it much more because of your debt to credit ratio. I have 3 credit cards + a few store cards and I ALWAYS call to get my lines of credit increased whenever possible because thats the only way I can decrease my debt to credit ratio right now. I can’t make my debt go down more than I already am each month, but if you make your “available” credit bigger that will help the ratio anyways. 

 

*important to note: I pay off all of my cc’s every single month so i don’t USE the extra credit… i just keep it around for the ratio. 

Post # 10
Member
1893 posts
Buzzing bee
  • Wedding: April 2011

I was in this boat too.  I made some bad financial decisions over ten years ago that STILL haunt me.  My credit was so bad in my early twenties I couldn’t even get a checking account, I had to rely on those awful check cashing places (I refer to it as “the dark times.”)  I’m 32 now, have been debt free for quite some time and was SHOCKED to find out my credit score was in the 670s!  I was fully expecting it to be in the 500s!!

Here are the things that help: debt to income ratio.  If your income is 50,000 and your debt is 30,000, you’re going to have a crappy FICO score.  The less debt, the better, which is a pretty obvious one. 

Payment history.  You’ve got to make your payments on time.  Those are what killed me.  I’ve got 30 day late payments from 3 years ago that are still dragging my score down.  You can call the individual companies and ask for them to wipe them off. 

Collections: pay anything you’ve got in collections immediately.  A good negotiating tool: tell them you’ll pay off the balance ONLY if they take it off your credit report.  Collections agencies get paid to collect money.  You’d be suprised what they’ll do to get an account paid.

Open credit: it’s important to use your cards and pay them off regularly.  Auto pay is your friend (half my late payments are prior to my autopay days.  I had the money to pay I just plain FORGOT.) Our mortgage advisor told us to make sure we use our cards, otherwise, the company might close them (this has happened to me, actually.) Closed accounts look bad on your report.  So even if it’s just a tank of gas every couple of months, make sure SOMETHING goes on there (but remember to pay the balance!)

Good luck.  Credit DOES eventually get better.  I’m still in shock that after so many years of horrific credit, I’m actually in the “good” phase.

Post # 12
Member
1893 posts
Buzzing bee
  • Wedding: April 2011

How is YOUR credit?  Another option would be to take out the mortgage alone before the wedding, then add his name to the title later.  So long as your income alone is enough to qualify for the loan..

Post # 13
Member
10367 posts
Sugar Beekeeper
  • Wedding: September 2010

@Carpie: I have to say: don’t finance furniture. Seriously. It’s such a waste of interest. If you cn get by with a few missing pieces that you add in over the course of a year or so, do it that way, and save a ton of money.

Also, depending on where you live, renting is much cheaper than buying – even when factoring in equity. Check the buy:rent ratio of the place you live. For example, at the average mortgage rate and average home value, you would have to own for more than 20 years before renting became more expensive than owning (not to mention how much more mobile you are, and having the great service of on-demand maintnence). If you are smart and invest the gap money wisely, those 20 years could possibly stretch for the rest of your life, all the while, you don’t ever have to deal with the headaches of owning.

Make sure you are doing more than “Hey, i’m an adult, that means I have to buy a house”. It isn’t always the best place to put your money – especially if you end up having to sell in a down market because of your job/family, losing a TON of money (know several people that happened to)

Post # 15
Member
1893 posts
Buzzing bee
  • Wedding: April 2011

Yeah, that’s how it is in California.  When I thought my credit was crappy my Fiance and I were in the same boat (my income, his credit.)  Looks like you’re going to have to go the long, hard road.  🙁 

FYI, I financed furniture a couple years ago and it helped my score.  Put it on autopay and had one year of perfect payments (it was also 0% APR for the first year.) I think that, along with my car payments  and income really really helped my credit score come up.

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