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I have been trying to improve my credit the past year and have a question

dcll

Banned
I don’t plan on buying any big purchases as I have a couple vehicles and a home but I am just wanting to improve it for no particular reason. It has been going up each month a point or two but the last time I looked it jumped 40 or so points. I have did a cd loan which is basically taking money out of my own account and using it to buy my car which I pay back the bank at 2% then get my money back when done. I also have been buying furniture at a local place that has a same as cash 3 month option and that has been going well.

My score still isn’t great but it has come a long way, at what point should I get a credit card or should I? I won’t be buying a house or any vehicles so I don’t know what else to do
 
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StreetsofBeige

Gold Member
Youre score will improve even if you dont use it as your profile will show a smaller ratio between going on credit vs. max capacity.

Get a no annual fee credit card with as much perks with it as possible like 1-2% cash back. Dont use it except once in a while or else the card will go dormant. Then you got to call them to reactivate it. Or to keep it active get a couple things on it as auto-payment like $100 worth of utility bills. That will keep it active, show you pay off bills every month and your credit will improve.
 

dcll

Banned
At what score do I need to have to start applying for like Amazon, Lowes etc? Or a card to use to put my monthly gas on then pay off each month
 
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bitbydeath

Member
Are you renting or have a mortgage?
You can use a credit card to offset your mortgage by putting everything onto it during the month and paying it off at the end.

You should talk to your bank directly about it for more info because they made need a specific account type in place.
 
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dorkimoe

Member
Believe it or not if you pay off your mortgage and have no other open lines of credit your score will start going down.
yup

I had 3 CC's open and I closed one and my score went down lol. I use my CC for everything instead of debit then just pay it off at end of month
 

Rival

Gold Member
yup

I had 3 CC's open and I closed one and my score went down lol. I use my CC for everything instead of debit then just pay it off at end of month
Yeah. I closed my southwest rapid rewards and opened a sapphire to get the 100k bonus point offer and my fico dropped from 852 to 836. I pay my balances in full every month. About 6 months ago I also had a small drop after not using any cards for a couple months.
 

StreetsofBeige

Gold Member
Yeah. I closed my southwest rapid rewards and opened a sapphire to get the 100k bonus point offer and my fico dropped from 852 to 836. I pay my balances in full every month. About 6 months ago I also had a small drop after not using any cards for a couple months.
Your score will drop when institutions inquire about your score (ie. checks for more credit). Also, when your debt/max capacity ratio gets bigger your score goes down too. Also, even if everything stays the exact same, your score may slightly fluctuate.
 

RoboFu

One of the green rats
Get a few credit cards and keep them low. That’s pretty much it and time.
my score hovers over 800.

a credit score is all a ratio of credit to debt.
 
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AJUMP23

Gold Member
Why do you need your score to increase and why do you need a credit card. Your score is basically your ability to repay debt. Quit relying on debt to do things. Save and purchase. I would wait to get a card until your score is better so you can get a better rate, or if you do use it pay it off immediately.
 

RoboFu

One of the green rats
Why do you need your score to increase and why do you need a credit card. Your score is basically your ability to repay debt. Quit relying on debt to do things. Save and purchase. I would wait to get a card until your score is better so you can get a better rate, or if you do use it pay it off immediately.
When you go to buy big purchases like houses and cars your score matters a lot.
 

AJUMP23

Gold Member
Not Everyone can pay 300k for a house and 50k for car out of pocket 🙄but people with good credit can get 0% apr or close to it.
Listen here you green rat.....bootstraps. :messenger_tears_of_joy:

I am not suggesting you should all be able to do cash with a house. But the OP has a house doesn't need a home loan. Also if you have credit issues and buy a 50k car you are an idiot in matters of money. Most of my vehicles are used and around 20k.
 

Ron Mexico

Member
So every financial situation is different and every financial institution will prioritize differently so YMMV (I've been in banking for 20ish years and do a lot of BI work now involving the credit landscape of our client base):

Generally, your primary FI will be more motivated to get you that credit card as the more you have with them, the less likely you are in theory to leave. That and you already have a secured loan with them so they can see your payment history in addition to your FICO.

Having a decent breadth to your credit, the length of time you've had history, your payment history, etc all play in to your FICO. Having a credit limit with low utilization (so keeping the outstanding balance low in relation to the available credit) will all help. Goes beyond just paying everything on time though that certainly helps.

Bottom line, it's not something where a "perfect" answer would fit in a forum post but this is just a quick outline.
 

zeorhymer

Member
The easiest way to improve your score is to literally open a credit card account. Then you put that away and don't use it again. They have a really silly calculation on credit scores. I only use 1 credit card because I'm grandfathered into the rewards system. I had an Amex card, but since I haven't used it in over 10 years, they decided to kill my account. I have a Citibank card that I had longer, but they haven't done that yet. Companies are weird.
 

Ron Mexico

Member
The easiest way to improve your score is to literally open a credit card account. Then you put that away and don't use it again. They have a really silly calculation on credit scores. I only use 1 credit card because I'm grandfathered into the rewards system. I had an Amex card, but since I haven't used it in over 10 years, they decided to kill my account. I have a Citibank card that I had longer, but they haven't done that yet. Companies are weird.
They want you to use the card as they get a cut from the merchant every time you swipe the card (a rate that Amex at least used to be significantly higher than Visa/MC) plus the potential for interest, etc etc. Been a while since I used to prospect to sign up merchants for CC processing.

Length of credit is a factor in the score. I have a card from BoA that I absolutely can't stand but I've had since college. I use it once a year to buy a coffee and move on with my life. Plus, it makes BoA waste the resources on sending me new plastic every couple years so win/win.

In my case, there was a long period of time from that BoA card to whenever I opened my next one so I make it a point to keep it open. Again though, every individual scenario will have its own wrinkles.
 

p_xavier

Authorized Fister
The best ratio for your credit card is to have a less than 10% total used at your invoice date. Closer to 10% the better, higher will decrease your credit rating. Also keep your main card as the one to use for life. My credit rating is 879.
 

DGrayson

Mod Team and Bat Team
Staff Member
The best ratio for your credit card is to have a less than 10% total used at your invoice date. Closer to 10% the better, higher will decrease your credit rating. Also keep your main card as the one to use for life. My credit rating is 879.

Shit I thought 850 was the highest. I was at 840 for a bit but mine goes up and down. I dont really care I dont need it for anything just fun to try to figure out what drives it.
 

dem

Member
Please excuse me while I whip out my big credit score hog.




Get a credit card. Pay your shit.

I don’t pay attention to my ratios. Just pay off the statement balance every month.
 
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StreetsofBeige

Gold Member
The best ratio for your credit card is to have a less than 10% total used at your invoice date. Closer to 10% the better, higher will decrease your credit rating. Also keep your main card as the one to use for life. My credit rating is 879.
Yup. As long as everything is paid off with a low ratio, its not hard to get a good score. I had a perfect 900 at one point and then t dropped to 893 some reason. (I think Canada is on a 900 pt scale and US is on an 850 pt scale).
 

SafeOrAlone

Member
Yeah, having a credit card is wonderful, if you're a responsible spender. I wish I'd gotten mine sooner.
I simply use it to purchase everyday items, pay off the bill that very day (+ a little extra as "allowance" for later), and collect the small cashback rewards, which I redeem every few months (2% back on gas & restaurants, 3% back at Whole foods, etc.).
All the while, my credit score improves.

There is no downside if you're smart about it.
 
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StreetsofBeige

Gold Member
Yeah, having a credit card is wonderful, if you're a responsible spender. I wish I'd gotten mine sooner.
I simply use it to purchase everyday items, pay off the bill that very day (+ a little extra as "allowance" for later), and collect the small cashback rewards, which I redeem every few months (2% back on gas & restaurants, 3% back at Whole foods, etc.).
All the while, my credit score improves.

There is no downside if you're smart about it.
100% agree. I got a similar kind of pay back card.

Even better, I use it for all my business expenses including travel and sales dinners when we did this before covid. I'd get back like $600/yr. I could use the corporate card if I wanted to, but forget it. I'd get nothing. It works out with the company too because using my own card, I'll pay it off asap. People using corporate cards on company dime dont claim expenses half the time or do it like 8 months later pissing off the clerks handling company expenses. So a win win.
 
Not Everyone can pay 300k for a house and 50k for car out of pocket 🙄but people with good credit can get 0% apr or close to it.
300k for a house!?

Dude, where can I get that? Where I live 300k barely gets you a closet, let alone a whole house 😂

(I'm exaggerating of course but I live in a very expensive region...)
 

Mistake

Member
If you get more than one credit card and split expenses between them, your credit will go up faster. Multiple lines of credit help, but be prepared to take a small hit if you close one.
 

Ron Mexico

Member
Shit I thought 850 was the highest. I was at 840 for a bit but mine goes up and down. I dont really care I dont need it for anything just fun to try to figure out what drives it.
FICO 8 is the most common metric for lenders these days and still tops out at 850 (stateside). Typically, anything above ~740-750 is just a buffer as that range will qualify for any top tier offers.

You'll see other scores on other scales because the bureaus will always have a new algorithm to monetize.

As for what goes in, utilization has been mentioned at length. That, time of oldest trade, breadth of credit, recent inquiries, payment history, etc all factor in.

Especially for a gaming forum, there's going to be the desire to min/max but at least for as opaque as the scoring algorithm remains, there's at least a large-ish range that defines a top tier borrower.
 
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StreetsofBeige

Gold Member
Having a good credit rating helps you get best loan rates, but it only goes so far. My mortgage guy told me (I'm renewing mine soon) that anything above 750-ish (Canada is on a 900 pt scale.... at least my report is out of 900) will get you the same rate. I didn't know the range was so large. You'd think someone at close to 900 would get a better rate than someone at 750, but according to him banks consider that close enough to offer the same rate.
 

Maiden Voyage

Gold™ Member
Shit I thought 850 was the highest. I was at 840 for a bit but mine goes up and down. I dont really care I dont need it for anything just fun to try to figure out what drives it.
It depends on the agency. 850 is common in the US:



I'm above 800 now but stopped caring after 750, since I'm already getting the best rates. Had the Mrs and I not paid off our house our scores would likely be higher since we have more diverse debt. But, I wanted flexibility in terms of employment in the future in case we wanted to have kids or encounter other significant life changes.

The best method to impact your score is always to pay off your debts on time. If you have bad marks, the only reliable cure is time.
 
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