Best credit card to up score?

[ezbtr]

My lender told me I need 3 more points for a loan, whats best cards to get, I need more debt, LOL

 

[Brewman61]

Re: Best credit card to up score?

Assuming you already have pretty good credit, and are not over extended,
I'd go with a major bank card, like Visa or MC, that has no annual fee.
Then charge a balance, but absolutely no more than about 20% of the credit limit. Make payments, on time, for a couple months. That may tick up your score by a few points- not sure how long it'd take, though.
Then once you get your loan, pay off the card and just let it sit empty.
You get points for having credit, but not over utilizing it. I suggested a major bank card because they tend to grant higher credit limits than typical department store cards. It may take a few months for all that to impact your score.
Applying for credit can have a short term negative impact on your FICO score, as the credit card company will pull your credit report, and depending on how much other credit you've applied for recently, it could be looked at as a negative.

 

[WIMUSKY]

Re: Best credit card to up score?

I've always heard that gas cards were good to up your score.

 

[kenmyfam]

Re: Best credit card to up score?

Can you pay something small off ???

 

[ezbtr]

Re: Best credit card to up score?

i dont owe a dime, just trying to get 2 more cards with decent limit, will only use them to up score, its 637 and I need 640, so Id pay off each month before due date.

 

[kenmyfam]

Re: Best credit card to up score?

Bank credit card then.
My 2 cents.

 

[bruceb58]

Re: Best credit card to up score?

This a lender for a home loan?

 

[ezbtr]

Re: Best credit card to up score?

yup, just to get my score up 3 points for a home loan

 

[geeco1]

Re: Best credit card to up score?

I have heard (don't know if it is true), but to increase your score, go to a bank and take out a small loan ~$1000. Then the following month, take a second loan from another bank for the same amount. Pay off the first loan and then make payments on the second loan for a couple of months. This is supposed to show that you established credit, payed off credit, and make payments on time. After 2-3 months pay off the second loan. Interest on both loans should be under 50 bucks.

 

[Mark42]

Re: Best credit card to up score?

Go find a new lender. This one does not seem willing to work with you. Just smacks of future issues.

 

[Philster]

Re: Best credit card to up score?

Call an existing company you do business with and up your credit limit.

 

[bruceb58]

Re: Best credit card to up score?

Curious why your credit is so low in the first place. You have late pays or defaults on there? Anything on there that shouldn't be on there?

Problem with scores below 700 is that you are going to be paying a bunch of points to get a loan

 

[korygrandy]

Re: Best credit card to up score?

Steps I took to raise FICO:

1. Obtained Credit Union $1000 credit builder loan and paid off over 12months.
2. After credit builder loan Obtained $1000 insured line of credit and paid off in 3 months instead of alloted 12 months
3. Signed up for overdraft protection on checking (which appears as a line of credit on report) and make sure I always have this above 80% of this balance paid.
4. Took out a recreational vehicle loan for $5000 when I bought my boat and have been paying that. My interest rate was lowered after 2 motnhs of paying on it which was nice.
5. I just received my first credit card ever this month...it had 0% interest for a year but the plan is to use it for gas and smokes only and pay it off every month.

The results:
My medium (middle of the 3 equifax, transunion, experian) was at 550.
Over 1 1/2 years after taking out the 2 small loans and the line of credit the medium was at 620.
After 2 years and the addition of the boat loan the medium is now 700. With the addition to the credit card, and the VA loan I'm working on getting it should slowly climb from there.

That's a 150 point difference in my FICO in 2 years. When I started this process I didn't have faith but I am not afraid to air my dirty laundry out there to show people it is possible to repair credit.

My whole problem was I had lack of credit and had outstanding collection judgements from bounced checks way back in the day. I was spending money I didnt have.

 

[jkust]

Re: Best credit card to up score?

Curious why your credit is so low in the first place. You have late pays or defaults on there? Anything on there that shouldn't be on there?

Problem with scores below 700 is that you are going to be paying a bunch of points to get a loan

Was thinking the same thing. 637 is crazy low. Which rating agency is the 637 with? I know rating agencies (according to a recent kiplingers article) are ceasing the use of FICO and have created their own system to directly compete. I don't recall the specifics any longer but I do recall they got rid of some of those illogical things that FICO used. I was always annoyed that if you have had say a mortgage for 5 years no other debt and make $1M your credit score could technically be dinged because of the fact you haven't paid the mortgage down yet and because one whole side of the equation (income) is ignored. Some of the parts of the FICO credit scoring to me just make no sense. Another one that I thought was just dumb was taking a ding for closing a card. I won't even use credit any longer (other than a cc for traveling)...If I can't pay for it with funds in the bank I don't buy it.

 

[WIMUSKY]

Re: Best credit card to up score?

I have heard (don't know if it is true), but to increase your score, go to a bank and take out a small loan ~$1000. Then the following month, take a second loan from another bank for the same amount. Pay off the first loan and then make payments on the second loan for a couple of months. This is supposed to show that you established credit, payed off credit, and make payments on time. After 2-3 months pay off the second loan. Interest on both loans should be under 50 bucks.

Works the same for credit cards if you do a balance transfer to another card say with 0% interest for a year or a lower interest rate. Looks like you paid the 1st card off way early, which you did and increases your score. In your case, you don't have a balance to transfer.

 

[WIMUSKY]

Re: Best credit card to up score?

i dont owe a dime, just trying to get 2 more cards with decent limit, will only use them to up score, its 637 and I need 640, so Id pay off each month before due date.

Maybe that's part of the problem. You haven't had enough loans/credit balances to establish credit.... When trying to establish credit, it isn't good to pay off cards each month. Creditors need to see a payment history to see if you pay on time each month.

 

[ezmobee]

Re: Best credit card to up score?

As I recall ezbtr had some money issues following a divorce which is probably the reason for the low score. He has since kicked major butt in getting himself debt free and able to buy a house.

 

[JRJ]

Re: Best credit card to up score?

I don't know anything about credit scores or loans, but we use our Costco American Express card a lot. The cash back is great. I like it and my Cabelas Visa.
As with any credit card, don't charge more than you can pay each month.

 

[bruceb58]

Re: Best credit card to up score?

When trying to establish credit, it isn't good to pay off cards each month. Creditors need to see a payment history to see if you pay on time each month.

I don't think that is true. I have never had a balance on my credit card in my entire life as I pay them off every month(I am 52) and my credit score is over 800. More important to have low amounts as a percentage of your limit.

http://www.myfico.com/crediteducation/improveyourscore.aspx

By opening up a credit card your credit gets searched. Too many searches in a short amount of time will also lower your credit score.

Closing existing credit cards can lower your score. When you do that you remove credit that is available to you and they want to know the ratio of used vs available credit. That is why when a card lowers your limit, it adversely affects your credit score.

 

[Summer Fun]

Re: Best credit card to up score?

Yep, Bruce is right on this. . Credit is a difficult thing to deal with at times.