How Can I Improve My Credit?

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How Can I Improve My Credit?

Postby rossmo » Thu Jul 26, 2012 9:22 pm

Questions for all the Awesome Folks:

1a) I just had a Hard Inquiry done in early May to get my Secured Capital One credit Card. Approximately when will it be "safe" to apply for another credit card in order to raise my overall credit ceiling and decrease utilization? 4 months after initial inquiry? 6 months?

1b) When the time comes, which credit card should I apply for? Would really like to get higher credit limits. I make approximately 50K a year (not sure if this is a factor).

2) How long does a loan affect your credit score? I finished paying off a student loan in December 2011 (fairly certain no late payments ever). Is it currently a positive factor on my score?

2b) If I were to take out a car loan (and make payments on time), would it affect/diversity my credit in a positive way even if I were to only be paying around $100 a month?

3) And of course...How can I improve my credit?! I'm hacking away at the current balance on my Credit Union CC. Should be paid up in 2-3 months if all goes well. Just finished paying down those store cards to $0 balance. What are my next steps? How long do I need to wait before I see significant change?

Many thanks for any/all suggestions!

[U]Credit Summary:[/U]

Federal Credit Union Visa: $2000 Limit / $1700 Balance (8.9% APR) Opened in April, 2011
Capital One Secured Platinum MasterCard: $200 Limit / $0 Balance (22.9% APR) Opened in May, 2012
Banana Republic Card: $460 Limit / $0 Balance (24.99% APR) Opened in May, 2011
Express Card: $840 Limit / $0 Balance (24.99% APR) Opened in June, 2011

Paid off student loan in December, 2011: $14,000 (no late payments)

FAKOS (as of July 11, 2012):
Experian: 626
Equifax: 669
TransUnion: 639

NOTE: There was a small balance on both store credit cards when this FAKO report was generated.

Once again...Thank you for any/all suggestions!
Credit Union Visa: $5000 (4/11)
Discover IT $1750 (10/12)
Chase Freedom $1500 (3/13)
BofA Credit Card: $18.7k (1/02) (Authorized User)
Secured CapOne Visa: $300 (5/12)
Banana Republic Store: $1200 (5/11)
Express Next A-List: $1340 (6/11)

FICOS (as of 3/15/12):
EQ 762
EX 731
TU 747

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Postby MemberSince99 » Fri Jul 27, 2012 4:41 pm

1a. Typically after 6 months most lenders do not put much weight on an inquiry. If you only have one, I know of few lenders who would be at all bothered by that.

1b. Without knowing your scores and how long you've had your credit union CC, it's really hard for anyone to tell you what to go for next. All we could do is take wild guesses with little to go on. If you want to find out your scores and let us know and your history with the credit union card we might be able to make more intelligent suggestions.

2. Your paid loan will report positively on your credit reports for 10 years.

3. Initially getting a car loan will lower your score, both due to the inquiries and opening a new installment loan. However in time you will get that initial hit back, and assuming you make all your payments on time, your score will surely increase.

About your score, it's really not that difficult. There is no magic way to great credit that I know of, or everyone would do that. You just have to pay your bills in full on time, every time. Apply for credit you really will use, and take care of it. With time if you do this, your score will go up. To get the highest score you will have a few major credit cards (2 or 3 anyway) and as your score gets better you will replace your secured card with higher limit better cards which will also boost your score.

Having a mortgage in good standing will also give you the highest possible score.

If you want to know a "trick" that will help you getting an Amex Zync charge as soon as you can will allow you to backdate later if you go for one of their revolvers (or other charge cards) and give you a score boost that way.

But in general there are not many tricks to bypass just being responsible. If anyone tells you that there are, don't walk, RUN!

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