Once you learn how the credit scoring system works, you can evaluate your own credit report. Here is an e-mail response to a loan officer who had asked me to review his clients credit report.
There are a few things that can be done to increase this clients credit score.
Since the balances on our accounts influence 30% of the credit score, I'll always look for account balance adjustments that are easy and will increase the credit score.
HFC FED CU
Balance: $435
Limit: $500
Pay down below 30% of the credit limit: $149.00
Also, I noticed that the balance on the other account with HFC is above 50% of the limit. This balance need to be reduced by $1261 in order to get it below 50% of the credit limit. I noticed that she has an account with AMGEN that has a huge amount of open credit. The limit is $4000 and the balance is only $465. She can take $1261 from this account and have both accounts below 50% of the credit limit.
Since the FICO scoring system only rates your "open and active" accounts, her 5 1/2 year old account with Macys is not being evaluated. The last time that she used her account with Macys was back in 12/08. I recommend that she uses the account to show activity. The limit is only $100 so ask her not to spend more than $20 or so.
Making these adjustments might allow her score to increase anywhere from 20-35 points. Removing some of her late payments will allow her score to increase much more than that. If we have even an average amount of success removing some of her late payments and she was to make the adjustments recommended above, I could see her score increasing by 50-70 points within about 30 days.
Warm Regards,
Jack B. Olson
Jack B. Olson
Account Executive
P - (866) 979-1099 ext. 205
F – (866) 979-1097
To learn more about FICO scores, read my article here: http://www.creditrepairwholesale.com/Credit_Score_Education.html
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