Quick Question on Credit Scores

[bcobb]

I have a couple quick questions about credit scores.

1. I enrolled in PG and got my scores from all three CRAs. I know those are not the true ones. Are these scores higher or lower than your true FICO scores?

2. I understand that 30% of your score is utilization of credit. Does that also apply to a closed account? For example, I have a VISA card from my former credit union, but they have closed the account and the card is no longer active. I pay the minimum every month and the account is current and paid as agreed. The balance is $930 and the limit is $1000. If I paid the card down below 30% or so of the balance, would that raise my credit score considerably? Or does it not have any effect on a closed account? I've read some threads on here of some individuals who have paid high balances down and their credit score went up like 100 points. The only card I have that's still open is my Target Guest Card and that I owe $174 with a $200 limit. I have the PG trial and I did the "What if" Simulator. I put in if I paid the target card off and it only raise my score 1 point. What's up with that?

Anyone who could provide these answers would be greatly appreciated. Thanks!

[morrow]

1. I enrolled in PG and got my scores from all three CRAs. I know those are not the true ones. Are these scores higher or lower than your true FICO scores?

Cant really say. Sometimes theyre higher, sometimes lower...other times they're right on the money. It various for each individual. The only way to get your REAL FICO is from myfico.com and that will set you back a few bucks a pop.

2. I understand that 30% of your score is utilization of credit. Does that also apply to a closed account? For example, I have a VISA card from my former credit union, but they have closed the account and the card is no longer active. I pay the minimum every month and the account is current and paid as agreed. The balance is $930 and the limit is $1000. If I paid the card down below 30% or so of the balance, would that raise my credit score considerably?Or does it not have any effect on a closed account?

Either way, closed or open, paying down the balance will be good for your score. How much I cant say cause its different for everyone.

I've read some threads on here of some individuals who have paid high balances down and their credit score went up like 100 points. The only card I have that's still open is my Target Guest Card and that I owe $174 with a $200 limit. I have the PG trial and I did the "What if" Simulator. I put in if I paid the target card off and it only raise my score 1 point. What's up with that?

Keep in mind...thats just PG. And its just a simulator....not the real deal. Cant always go by what it says.

[Ahntara]

The closed account will factor into your score until you pay it off. Then it has no activity (since it closed and you can't charge on it anymore), so it won't be a factor anymore. I hope you still have two revolving accounts with this one closed. All consumers need two revolving and one installment account, that are paid on time. The revolving accounts need to be used every month, with the balances kept under 30% of the credit limit. The length of time they have been open is also a factor. It is better to open the minimal two and keep those for the rest of your life. Closing accounts can not only change your debt-to-available-credit ratio, but also shorten the time frame you have had credit (only currently open accounts are factored into the score). So, I hope closing this one works out for you.

[bcobb]

Thanks for the responses. Actually the only open revolving card I have is my Target Guest Card. All others where closed by the creditors themselves. Should I try to get a secured card with a low limit?

I do have an installment loan that is in good standing and always has been. My scores are going up slowly but surely. I've been working the credit repair and I usually get some deletions each time. I did notice that EQ is hard though. Haven't had much luck with them. But have had quite a bit of luck with EX and TU. Any suggestions with EQ?

Now I'm working on my husband's. He only has 6 negative accounts and 14 positive. His scores are in the upper 500s. His EX one from Myfico.com is 596. It's right at the 600 mark. I am disputing 3 of the six with each CRA.

We're trying to get his cleaned up so we can move from the apartments we're in now cuz they're getting shady to some that were just built. They are really nice and only $45 more a month then we are paying now, with a sunroom!! And of course, they will do a credit check. Then eventually we'll try for a home loan.

[Ahntara]

*here goes*

Yes, open a minimum of two (all-purpose) revolving accounts. You need to use them every month. So don't get a department store card. You would have to buy something you may not need. You want a VISA, MC, Discover or AMEX; the type of account you can use everywhere. All consumers need between two and four, so I suggest two.

You will take a hit to your score for the inquiry and a hit for having a new account. But everyone has to start somewhere. Just make sure you don't do this with some major purchase pending. You are gonna keep these two revolving accounts for the rest of your life, cuz length of time you have had credit is a factor, the longer the better.

Charge something on each card every month. What you MUST do is keep your balance below 30% of your available credit. What I SUGGEST you do is make a nominal purchase, like one tank of gas, every month. Life happens to everyone. It is so easy to get in trouble with even the minimum charged on CC's. Don't let that happen to you. The vast majority of us will be able to pay off two tanks of gas every month.

Most important: Pay the accounts in a timely manner. Don't wait until you get a bill. Send money. NEVER, EVER EVER let the accounts get paid late.

If you are not able to get unsecured credit cards, start with secured. Start and maintain these accounts. This strategy, along with controlling and limiting inquiries and paying all accounts on time is the way you get credit scores high.