Credit score HeLp!

[Cheryl Nordby]

Nick posted about a credit card being offered to Nachi members.YAY!
I am a person who used to have good credit, but with kids needing school clothes...cars needing repairs, well my credit got so it wasn't great any longer. Now my kids are grown and moved out and my payments are always on time but..I wonder how long it takes to get your credit score back up to 690 or above? So....Nick said to start a post about how to get your credit score up. I need help. thanks Nick!

[W. Michael Chris]

One thing I was told is if you have several different payment to credit cards, car payment, etc. pay extra on one, pay minimum on others, get one totally paid off, start on the next in line, get it paid off and so on.
Check your credit scores yearly, also, contact your back, credit union, they should have someone who could advise.
Good luck.

[Nick Gromicko]

FICO is changing its formula in response to the big three credit agencies creating their own formula VantageScore. They did it of course so that they could stop paying FICO a fee for using the FICO score but they also made some real life improvements. Basically banks don't give a rats wazoo about what happened 3 years ago. Banks are all about, how's it goin' wit ya now. Unfortunately the FICO score was almost evenly biased in that a late payment 3 years ago hurt as much as one last month. This is nuts. VantageScore, and now FICO are coming around to thinking like banks do and so are putting heavy weight on what is going on with you now. So here is the Nick trick, you won't read anywhere else, and I know for sure it works as I manage the credit scores of quite a few people:

Under the old scoring system, which was time neutral, your score was heavily affected by the total amount of debt you were carrying relative to the total amount of credit available to you. This made no sense as many carry a high but consistent percentage over decades and pay their bills on time. This also revealed nothing about what is going on lately in the applicant's financial life. So when banks started complaining that they needed information about what is going on in the applicant's life today, VantageScore, without screwing up the whole infrastructure of credit information collection, figured out a way to reveal this sought info, and then weighted the credit score heavily with it, using just the data they had on file. You will notice on your credit report that there is a number often titled "High Balance" which is the highest balance you ever had on the card. There is also an "Existing Balance" number for each card or debt. Instead of giving weight to Existing Balance/Total Credit Line, they started giving weight to Existing Balance/High Balance. You see, if your Existing Balances are near your High Balances it means that you are carrying as much debt as you ever have. However if your Existing Balance/High Balance ratio is low, it shows that you are carrying less debt than you normally do (a sign that you are financially healthy). Of course you can make this ratio small by lowering your numerator (Existing Balance), but that takes money. However, like any fraction, you can diminish it by increasing the denominator (High Balance). Do this by running up a credit card to near its max, leaving it there for 2 months so you are assured it gets reported to the credit agencies, then paying it off (or at least down to what it was originally). Do it for every card. It costs nothing. All you do is max out one card at a time and don't use the other cards, your total debt is the same and your payments overall are the same. Your just shifting the debt from one card to another to log a one-time High Balance on each. What this does is makes your Existing Balance/High Balance ratio on each card, small and indicates (falsley I might add) that you are currently carrying less debt than you normally do. Hee hee. The "currently" is the part that is now given much weight in credit scores.

[Nick Gromicko]

For those of you trying to follow, a person's current financial health is best indicated not by the amount of debt he/she is carrying relative to the amount of credit available to him/her, but rather the debt he/she is carrying relative to the amount he/she typically carries, if that makes any sense.

[Carl Pennick]

Hello Cheryl,

Try giving this person a call his name is Dan O'Connell his company is PBS & Associates they specialize in helping people with there credit scores and how to improve it. His office number is 813- 490 6380 his cell phone number is 407- 923 1250 We both belong to the same network group I'm sure he can help you just mention my name

[John McKenna]

Originally Posted by gromicko

does is makes your Existing Balance/High Balance ratio on each card, small and indicates (falsley I might add) that you are currently carrying less debt than you normally do. Hee hee. The "currently" is the part that is now given much weight in credit scores.

Nick,

Did you ever sell used cars?

No really, if this is the system, you might as well learn how to
survive. I see nothing illegal in this method... but I would
never buy a car from you.

[Cheryl Nordby]

thanks for the help gentlemen. I know I am slowly getting my card balances down and it is a great feeling. However it would be nice to have a major credit card too. I got rid of mine 4 years ago but kept the small cards like Lowes, Macy's and Les Schwab for when I need a hot water heater, clothes or tires. I will have to check my credit score. thanks again!

[bdoles2]

I've learned first hand that credit is one of THE most important things to maintain. In July I quit my factory job of 14 years to move here to Atlanta and take on Home Inspections full time. I figured it would take me awhile to own a home again, seeing I don't have a steady income, or the fact it's not proven yet since I only have lived here 3 months. I was able to get a mortage through Bank of America and never set foot in the door.

The reason it was all so easy, is because I had a pretty good credit score.

Good credit is SOOO important in this day and time.

[Nick Gromicko]

I think VantageScore has a good chance of knocking FICO off its thrown next year. People like the ABC thingie. We'll have to see.