How can I improve my credit score that was 700+ one year ago?
drivelikejoewho asked:
I had a 735 credit rating last year. Since then, I have learned a few things not to do that will effect your score. I cancelled my oldest credit account because I never went to the store that I had for anymore. It had a $300 limit and I never used it. Didn’t know closing it would drop my score or I wouldn’t have done it. Then I got an account with no interest for 12 months to buy a computer. I paid the account off already and I haven’t closed it because of the above. I did lower the credit limit in hopes that might improve my score after finding out closing it is not a good idea. I then dropped the limits on the two credit cards I have. I have about 9k in credit card debt and make about 55k a year. I have no other liens (cars etc.). No late payments or anything on any accounts open or closed. My score dropped from 730 to 640 in one year.
I had a 735 credit rating last year. Since then, I have learned a few things not to do that will effect your score. I cancelled my oldest credit account because I never went to the store that I had for anymore. It had a $300 limit and I never used it. Didn’t know closing it would drop my score or I wouldn’t have done it. Then I got an account with no interest for 12 months to buy a computer. I paid the account off already and I haven’t closed it because of the above. I did lower the credit limit in hopes that might improve my score after finding out closing it is not a good idea. I then dropped the limits on the two credit cards I have. I have about 9k in credit card debt and make about 55k a year. I have no other liens (cars etc.). No late payments or anything on any accounts open or closed. My score dropped from 730 to 640 in one year.
Help!
Albert
Ronald
Dropping the limits on your cards will hurt your score. One thing that effects your score is how much available credit you have example:
Say you have 5 cards each with $2000 limit. $10,000 total. Say you owe $5000, your debt is 50%.
If you drop all of you cards to a $1500 limit you now have 75% debt.
If it is possible I would have the limits raised and your debt % will go back down, which will make your credit go up.
Viola
There is nothing you can do but keep slowly paying off your bills do not close anymore accounts. Whatever you do at least pay your minimum on time every single month, it will work it’s way back up. Also do not apply for anything else AT ALL. Do not fret though the same thing happened to my husband and he still qualified to by a house, same income and 630 FICA, so you aren’t doing too bad.
Tyrone
You’ve made a few bad moves …. unfortunately the only thing that will fix those moves is time.
1. Don’t close out old accounts. A large percentage is based on how long your accounts have been opened.
2. 30% of your credit score is based on how much you owe as compared to what your credit limits are. Example: If you have $5000 in outstanding debt and your limits are $5,000 – that means you are using 100% of your available credit. If you have $10,000 in outstanding debt and your limits are $50,000 – that means you are using 20% of your available credit. So even if you have less debt – your score is lower.
By reducing your credit lines – you’ve increased your percentage of available credit – and hammered your score.
Even worse, with your score dropping to 640 – odds are that the same credit companies who lowered your limit at your request are probably not going to be open to raising your limits because your score is lower.
The good news is that time will fix the issue. But I know of no “quick fix” to repair this one.
Sorry for the bad news but hope this was an understandable explanation.
Scott
It really depends on what youre available credit is- if you have 9k in credit card debt and 10k in available credit line- then youre using 90% of your available. In order to increase your credit score you really do not want to be using more than 50% of your available credit line. So if you have lowered your lines- you could very well be shooting yourself in the foot.
Dolores
lowering you limits was a bad idea. A good part of your credit score is calculated off of available credit. By lowering them, you decreased your available credit. This increases our debt to credit ratio. You can try to have your credit limits restored. Also, pay off what every you may have on your credit cards as it stands right now to help increase your score.
Melinda
Well everyone said what I would have said so I will add to it. There is still a lot more you need to be aware of and the only way to learn is to keep reading about credit on yahoo answers credit and this =
Learn about credit scores =
Shannon
There is a lot of misinformation about credit. This article will disprove many of the common credit card myths and provide some tips on increasing your credit score. There is no arguing that a better credit score means better interest rates for your mortgage, auto, and all other areas where credit is used. By implementing these tips you could save hundred of dollars in interest in the long run and put cash back in your pocket in the short term.
1) Avoid using cash and borrowing from family for all your purchases. In the eyes of creditors no credit history is the same as a bad credit history. You may get away with paying cash for your car but when you buy your first home it will come back to haunt you. Even if you can afford to borrow or pay cash try opening an account to buy your furniture, automobiles, or home improvements. A diverse credit background will help with your credit score.
2) Your credit report tells all. Do not lie or stretch the truth to lenders, banks, or employers. They will easily catch you and the consequences are not worth it.
3) Do not cancel credit card accounts to improve your credit. The intended affect may be the opposite of what you expect. You can hurt your credit by canceling your credit cards; especially if you have a long history with the account. Losing a ten or twenty year credit history isn’t worth it. If you absolutely must stop using a card, try shredding it. An open account that doesn’t have a balance looks far better then no credit account at all.
4) Starting early is always better when establishing credit history. Getting a teenager or college student a credit card is a great way to get their history started. For those who don’t trust their child’s judgment yet there are many prepaid cards that report to credit bureaus.
5) Past due debts that are over 30 days late will demolish your credit score. That aspect alone makes up a third of your credit score. To be safe never go passed the 30 days late period with any late payment. One payment made passed the 30 day mark will stay on your report for a very long time. When a creditor pulls your credit they won’t care what the reason was so don’t let this happen. Read more from:http://www.credit-card-gallery.com/article/136,Seven_Must_Know_Credit_Tips