Credit Score

[jyl]

I have a few questions about credit scores. I figure some of you know about this stuff.

1. What is the level of credit score that is high enough that it makes zero difference at all to have a higher score?

2. If you are 10 or 20 points below that Nirvana and you want to get your score higher, how can you do so? (Assume that there are zero negatives on the credit report, so the question is, I imagine, how to get more positives.)

I’ve never paid the slightest attention to my credit score. Never needed to. Don’t apply for credit much, never had any problem getting it. Somehow I got a CreditKarma account, and now I’m being reminded every week “your score is X, congrats, apply for this or that” and I’m starting to get competitively interested in it.

[wildthing]

760 I think, or 780. Might be dependent on the provider.

[Pazuzu]

Yes, basically everything above 740-750 is the same, "highest rating".
If you're looking to go from, say, 650 to 750, either get 2 new cards, or dump everything on one and pay it off monthly for 5 or 6 months. Get to just around 30% of the credit limit, let it sit there and stew for 2 or 3 weeks, then pay it off. Rinse and repeat.

[pwd72s]

Should I care? Everything paid for. No need or desire to borrow. Credit cards paid off monthly.
Haven't a clue what my rating is. Always hated debt, considering money paid in interest was money wasted. Paid cash for both cars, mortgage was paid off decades ago.

[Steve Carlton]

From what I recall seeing, I think the highest Tier 1 requirement I've seen is 780. Scores go to 900 now. You can pull one of each bureau once a year through the bureaus themselves at annualcreditreport.com . Look at all three bureaus- see if they still list the top 4 reasons your score isn't higher. It could be not enough open accounts- more often than not it's too many open accounts. The thinking is your score is highest when your credit usage is 5% of the limit, but that info is a secret, like what triggers an audit on your tax return.

The balances on your accounts are the balances on your monthly statements. If they're too high, pay them down a few days before the statement date.

Inquiries run down your score a bit.

[Crowbob]

The only way I can improve my score is to get an installment loan.

I might be forced to buy a car or something on credit for the first time in at least 15 years.

[ltusler]

If you're not going to apply for any loans or new CC cards, lock you credit at each bureau to help prevent hacking.

[rfuerst911sc]

My Capitol One credit card gives a daily credit score update . It currently is 817 . My wife and I have zero debt so the score doesn't mean as much as it used to . I do use my CC to purchase almost everything only to gain points . Balance paid in full every month .

But our situation being retired is different than a young couple with a family . Juggling needs and wants vs income is always a balancing act . And then trying to add $$$ to savings/401k is additional stress on the budget . Congrats to those that do it successfully 👍

[KFC911]

Originally Posted by ltusler

If you're not going to apply for any loans or new CC cards, lock you credit at each bureau to help prevent hacking.

Freezing one's credit at the three is prudent for many folks ... and easy to do & temporarily lift it for when you want someone to access... also cuts down on some other bs too. Mine's been frozen for probably 2 decades.

I've only checked my credit rating once .... posted about it here. Just a curiosity check .... I knew it was dang good and it has almost no impact on me....

It was 825 (out of 850) back then .... probably a LOT lower now tho'... but no dings .... none.

I don't care what mine is still ... the actual number.

I'm good with that....

[Cairo94507]

A total scam these days with all these companies artificially increasing borrowers' credit scores for no reason. I have 0 debt and laugh at all of the commercials to increase a credit score. These companies took a valid way to evaluate if someone is a reasonable credit risk and have compromised that system so people who do not pay their bills have good credit scores. Typical.

[tdw28210]

Originally Posted by ltusler

If you're not going to apply for any loans or new CC cards, lock you credit at each bureau to help prevent hacking.

^^^^this^^^^

[Alan A]

Originally Posted by pwd72s

Should I care? Everything paid for. No need or desire to borrow. Credit cards paid off monthly.
Haven't a clue what my rating is. Always hated debt, considering money paid in interest was money wasted. Paid cash for both cars, mortgage was paid off decades ago.

You didn’t ask. So probably not. The OP otoh does…

Tier 1 is 750 or so using the latest scoring methodology (FICO 8) which goes 250-900. If you are down a touch, pay your bills on time and keep your individual card and total debt load under the threshold where it matters. It’s about 25-30% utilization iirc. Spread the load across cards if necessary.

Edit some one else said 30, which seems about right.

Counterintuitively cancelling cards can hurt your score - it reduces the total available amount and can increase your utilization.

After that read this:

https://www.experian.com/blogs/ask-experian/what-is-fico-bankcard-score-8/#:~:text=The%20FICO%20Bankcard%20Score%208%20is%20 a%20FICO%C2%AE%20Score,range%20of%20300%20to%20850.

[asphaltgambler]

Your score is roughly divided into 1/3's: 1) length of time having credit. 2) length of time with on-time payments to those accounts 3) balance on those lines VS limit. Then there's deductions for inactivity on open lines of revolving credit, inquiries from creditors with ( possible) new lines of credit, cancelation of existing lines of credit, reduction in limit on revolving lines credit.

If you're looking to increase your score quickly, ask all your creditors to increase your limit which immediately positively impacts #3 above.

[Por_sha911]

Originally Posted by pwd72s

Should I care?

One reason to start: your insurance rates are higher if you don't have a good credit score.

[Por_sha911]

The amount of debt to total available credit will affect your score if you owe too much. Not having enough a credit history will affect your score.

[Steve Carlton]

Originally Posted by asphaltgambler

If you're looking to increase your score quickly, ask all your creditors to increase your limit which immediately positively impacts #3 above.

The same effect can be accomplished by paying down the balance before the statement date. Also, if you do that, ask the creditor to only do it without a hard credit pull.

[wdfifteen]

A trick that might be helpful.

I have my credit card set to auto pay the minimum balance every month. That way even if (ok when) I forget to pay the bill I'm always in compliance with the TOS. Last month for the first time in years I paid the bill a week late. It cost me a few bucks in interest, but no penalties and no report to the bastages at Experian, etc.

I hate Experian. My wife responded to one of their "Credit Alert" come-ons. It scared her, she did something, and somehow as a result they started charging her credit card $17 a month to monitor her credit score. Their cancellation procedure was so convoluted she ended up having to cancel her credit card to get them to stop charging her.

[GH85Carrera]

Originally Posted by wdfifteen

A trick that might be helpful.

I have my credit card set to auto pay the minimum balance every month. That way even if (ok when) I forget to pay the bill I'm always in compliance with the TOS. Last month for the first time in years I paid the bill a week late. It cost me a few bucks in interest, but no penalties and no report to the bastages at Experian, etc.

I hate Experian. My wife responded to one of their "Credit Alert" come-ons. It scared her, she did something, and somehow as a result they started charging her credit card $17 a month to monitor her credit score. Their cancellation procedure was so convoluted she ended up having to cancel her credit card to get them to stop charging her.

I have two credit cards. One I use for my business expenses, and one for my personal expenses. Bot are set to automatically pay whatever the statement balances is on the day it is due. The credit card company takes care of it all, so never an issue. In the last 15 years or more since I got those cards, I have paid a grand total of ZERO in interest.

The tough part was getting them to understand that yes indeed, we might start the day with $200 in gas, and several hours later need another $225 in Colorado, and later $175 back at home on the same day. Cars can't do that but a Cessna 182 sure can suck some gas. We finally got them to just let any self serve gas at an airport to be approved all the time.

[john70t]

I've supposedly got 'good' credit but haven't played the game and probably won't until the latest JetStream is released(j/k).
Not a financier here but this is my understanding.

Increase- Buy something on credit interest and pay it off in regular installments without being late. Supposedly the higher balance carried the better. Have multiple loans but no greater than 1/3 allowed credit. Show them doggy can jump through the hoops.

Decrease- Every time a company does a credit check it counts as a hit and lowers score. Anyone can run a report and there is nothing to stop them.

IDK. The rules are opaque but they should not be.

[FA-18C]

The greatest impact on credit "history" is age of credit, followed by utilization. We have been hovering at around 850 for years, and after paying off a car loan, and a HELOC in the same month went down 15 points. Average age of credit decreased, and utilization as % available went down significantly. The credit scoring is for the lending industry, not consumer. Your score goes up when you use credit, responsibly.

We learned this early, and in HS put our daughters on our Credit cards, did student loans that we paid off with zero interest, car loans and leases that we paid off early, etc... As a result, both mid-20 year old kids have 805+ credit scores and have had zero issues getting leases etc...

Credit scores no longer go down if a company does a soft inquiry if you are considering a loan. Usually goes down a little if you add a credit card, installment loan, or new loan - but that is due to average age of credit dropping, and % utilization. Usually if payments are made, the score recovers quickly.

The rest is voodoo.