Thursday, April 15, 2010

Increasing your credit score

On August 7, 2008, I paid ($1) to found out what my score was, 761 at the time and recently on April 11, 2010 I did it again and I found out something horrible! It's gone down to 737! Okay, so maybe it's not that horrible, but I am a little disappointed at it. However, I’m still in the “very low risk” category, which is good.

So, here’s how you can increase it with some examples. I recently moved from NY to Texas so coming here, I had to get new car insurance agent, bank, etc which resulted in me getting a couple of hard inquires, 2 to be precise. Luckily for me, in 2008 from August to October were the other 4 inquiries, so by the end of this year, those will be erased and my score should go up approximately 9 points. Below are some rough limits for when your score will change and how my credit score would change if they were moved into that category:

Available credit using:
0-15% (no change - I'm at 7%)
16-29% (-3 pts)
30-50% (-13 pts)
51-64% (-19 pts)
65%+ (-24 pts)

Hard Inquiries:
0 (+31 pts)
1-2 (+9 pts)
3-4 (+9 pts)
5-6 (no change - I sadly have 6 inquiries)
7+ (no change)

Open Installment loans:
0 (+5 pts)
1-2 (+5 pts)
3-4 (no change - I currently have 4 loans which account for my debt)
5+ (-9 pts)

Declared a new bankruptcy?
No (No change - Thank goodness!!!)
Yes (-169 pts)

Delinquent accounts?
No (no change - Always pay off everything each month)
Yes (-42 pts)

Getting a mortgage?
No (no change - Currently don't have a mortgage)
Yes (+10 pts - This really surprised me)

There are obvious things that will increase your score:
Pay on time,
Vary your types of credit and limit unnecessary credit accounts,
Don't max out your credit card,
Don't go on an account-opening binge,
and Don't apply for too much credit.

Another one I found was having 2 revolving credit lines to every installment. So in my case I have 4 installments (my student loans) which would mean I need 8 credit cards. However you want to be careful also to not apply for too much credit.

No comments:

Post a Comment

Your name and email will never be sold, distributed, or revealed to the public by any means.