Beyond your credit score

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Beyond your credit score

Whether you're flying high with a credit score in the 800s or laying low in the 600s, you aren't alone. Credit Karma compared the credit profiles of over 200,000 consumers with similar credit scores and found that the average Joe and Jane in the credit score ranges share more than three digits in common.

Credit Karma Infographic

The wrong conclusion

When it comes to credit scores, many people assume that correlation is causality. For example, the infographic here shows that people with a high credit score generally also carry a large amount of debt. It's easy to assume that you need excessive debt to have a good credit score. But that isn't the case at all. The truth behind that conclusion is that only people with good credit - to qualify for credit cards with high limits, loans, and a mortgage - can accumulate large amounts of debt. Consumers with credit scores that need work don't have a lower credit score because they don't have more debt; they simply don't have the credit score to even access those kinds of financial opportunities.

The right conclusion

The infographic shows what kind of financial doors and credit habits consumers in each credit score range has, but again, correlation here isn't causality. Here's a short guide to why consumers in the 800+ range have a lot more in common than consumers in the 600+ range:

Open accounts. Having more open credit accounts is good for your credit. You should always consider this credit aspect before closing your old accounts, which can damage your credit score.

Total debt. It's credit myth that you need to take out loans or have lots of debt to have good credit. That simply isn't true. You will notice that people with 800+ credit scores actually have less debt that those with 700-799 credit scores. There is no exact correlation that more debt equals better credit, but the reality is that only people with good credit can accumulate debt.

On-time payments. Paying on time is one of the top drivers of a great credit score. Whether you have a few credit lines or many types of credit, paying all of them on time is almost a guarantee for a good credit score.

Number of credit cards. Credit cards are an easy way to build credit. Contrary to popular belief, carrying a balance or paying interest isn't what benefits your credit score. Simply using your card once a month and paying on time is the key to building good credit. There are many people who have never paid a single cent of interest and still have pristine credit by properly using their credit cards.

Total debt and utilization.People with good credit actually use a much smaller percentage of their total available credit. Similar to the way they handle debt, good credit consumers know how to manage credit responsibly. For example, people with a credit score in the 800+ range are only using 5% of their credit limits, whereas people with a score in the <500 range are using over 100%.

Lastly, it is important to mention that all of these numbers are averaged and there are still differences across all metrics.

Editorial Note: The opinions you read here come from our editorial team. While compensation may affect which companies we write about and products we review, our marketing partners don't review, approve or endorse our editorial content. Our content is accurate (to the best of our knowledge) when we initially post it, but we don't guarantee the accuracy or completeness of the information provided. You can visit the company's website to get complete details about a product. See an error in an article? Use this form to report it to our editorial team. For questions about your Credit Karma account, please submit a help request to our support team.

Advertiser Disclosure: We think it's important for you to understand how we make money. It's pretty simple, actually. The offers for financial products you see on our platform come from companies who pay us. The money we make helps us give you access to free credit scores and reports and helps us create our other great tools and educational materials.

Compensation may factor into how and where products appear on our platform (and in what order). But since we generally make money when you find an offer you like and get, we try to show you offers we think are a good match for you. That's why we provide features like your Approval Odds and savings estimates.

Of course, the offers on our platform don't represent all financial products out there, but our goal is to show you as many great options as we can.

All Comments

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1 Contribution
1010 People Helped

Helpful to 1010 out of 1056 people

I have been using Credit Karma.com to help me get my finances in order.  The one mistake I made was closing out a long time account, transferring the balance to a 0%, and then in July 2013, it will go to 7.74%.   My other card, even though I never missed a payment was raised up to 10.9%.  So I still see it as a win-win for me because of the lower rate.  I have been doing the Dave Ramsey method to get to the debt free crowd, although I am running out of time due to retirement a year off.  Cancer played a big roll in debt, because even though I had insurance the doctors and the hospital wanted percentage payments upfront.  Before that, a heart attack slowed me down, and before that, my car burned up and I had to start all over with another car.  So, life storms happen, you pick yourself up, dust yourself off, and get at it once again.  My lifes' lesson to the young, don't go into charge card debt....save your money up for what you want, because its not fun not having any options, and when you are in debt, you are a slave to paying off that debt. 

Reply by
mawon4

2 Contributions
162 People Helped
Helpful to 159 out of 178 people

thank you. that was very helpful just reading it. I'm new to Credit Karma, been around the block with credit issues but now that I'm 8 years from retirement, Ineed to get on the stick and keep it in front of me. Thank you again, and wishing you the best of health.

MW

Reply by
airraid1999

2 Contributions
271 People Helped
Helpful to 269 out of 294 people

very true life will throw you curves,, but just get back up and go at it again... PAY OFF THOSE HIGH % FIRST!

Reply by
Jarol

2 Contributions
16 People Helped
Helpful to 9 out of 10 people

Your story  is helpful. Keep old credit card accoounts open with a zero balance. Get debt-free, set aside money for emergencies and you will be living the dream.

Reply by
Jarol

2 Contributions
16 People Helped
Helpful to 7 out of 9 people

Thank you for sharing your story. You are on target. Keeping your old credit card accounts open with a zero balance, getting debt-free, saving up money for the next emergency, and you will be living the dream.

Reply by
Propellerhead

1 Contribution
0 People Helped

Great post! And thanks for being a stand-up guy and paying all of those bills!

Reply by
Seffhaven202

1 Contribution
0 People Helped

You DO need to take out loans to get top credit.  My auto insurance company notified me I was paying more because of good but not great credit rating and the only negative was "no recent installment loans".  It hurts your rating when you have your mortgage paid off and pay cash for a car.  So I took out a $10,000 loan from my credit union, put it in the savings account and paid it back monthly over 6 months using automatic transfer from the savings ccount.  With a hold on the savings account, the interest rate was very low.  I never saw that money, but it brought my credit rating up to excellent.

You tell me how that improved my likelyhood of paying my credit card bills. 

Reply by
Jiminewjersey

2 Contributions
0 People Helped

I hope your health is now excellent. Thanks for the tips and excellent advice. I am 7 years from retirement but have $144000 in student loans at 9.5% interest and unable to refinance because the Republicans killed senator Warrens bill. It would cost the Government too much money that they collect in wage garnishment so, pension and Social Security offsets and tax liens. So I am trying to pay them down as much as possible. Not easy, but when I retire, a huge chunk of the sale of my home will go to pay the evil bankers. Good luck to you and God bless you.

Reply by
safety1srt

1 Contribution
0 People Helped

So sad that u have medical issues,just stay strong and GOD will bless u.

Reply by
artsandattitudes

1 Contribution
1 Person Helped
Helpful to 1 out of 1 people

Thanks for your words of wisdom,.. I know what you mean about medical expenses holding you back for a while, we went though the same experience,.. plus the Nations's ecomony problem all hit us at once,.. What really burns me up is even with hospital insurance we paid dearly,..

Reply by
ernhrtbige

1 Contribution
0 People Helped

Although i have already have been doing what you suggest, it is good for younger crowd to read this. Also a Divorce can mess up your credit if you let it. After My Divorce my credit was bout 600, in bout 4 years I am up to 756, So there can be a happy ending. I Retired in May.

2 Contributions
501 People Helped

Helpful to 501 out of 515 people

My husband of 32 years died in August 2013. I didn't realize that my husband's death would affect my credit score. One of the things that caused problems was having an insurance on our credit card, when his death was reported they canceled the card, and told me the balance would be eliminated and I wouldn't have to pay it. What they don't tell you is this kills your credit, I mean it took my credit from 700 something to 500 something. I can't believe it! If I had known this I would have paid the credit card off. Don't pay for the death insurance, save that amount and put it towards your credit card debt. The second problem are the medical bills, even though I lost over $2000 in income I still paid on the medical bills, but couldn't make the minimum amount, so it was $5 on each bill each month. The interest came to more than I was paying each month, which meant these bills are actually higher than before I started paying. Now I've found they are taking me to collections which lowered my credit score too. Ladies if your reading this you'll need to continue working after you've had your children. I made the mistake of taking off a few years for each child, two, and now only make half of what my husband made. I wish there had been someone to have advised me when I was younger about continuing to work, and how those years off would affect my retirement amount.

Reply by
pinkismysigcolor

1 Contribution
88 People Helped
Helpful to 88 out of 109 people

Very nice.  I feel your pain regarding credit scores dropping overnight...mine was a 25 year divorce.  All the best...

Top Contributor

Reply by
bluedog2384

14 Contributions
573 People Helped
Helpful to 44 out of 48 people

I would very much like to know why/how the 'credit card insurance' scenario dropped your score by almost 200 points.  Was it because a long time card was closed? (doesn't make sense)  Was it because records show account was paid by 3rd party? or was account marked as 'debt written off' ?   Could additional factors have come into play to cause your score to be so significantly affected?   This is a very interesting subject for me since I"ve been considering taking out the insurance in case of unemployment or death.  It seems to make smart sense on the surface but in reality, is it really a good thing?   Does CK have any comments about this that would be helpful?

Reply by
forpeople

1 Contribution
4 People Helped
Helpful to 4 out of 7 people

I hope you were able to file for bankruptcy to eliminate those medical debts. Often credit score will go up after filing.

Reply by
prepcook52

1 Contribution
0 People Helped

thank you for the advice. I lost my husband in June od 2014 aqndnow I am responisble for his medical bills srtuggling to pay my own. I grateful to anyone for their help and this has been very helpful. Still have to work to survive.

3 Contributions
294 People Helped

Helpful to 292 out of 301 people

       I am 74 years old and pretty well educated (about 25 years of schooling of which 7+ is college) and have paid like clockwork, unless I had a senior moment, then was still within the penalty time limit on those very few times.  But I am mystified by the lowering of my Credit Score when someone makes a Hard credit inquiry.  I refinanced my mortgage 18 months ago and have not sought credit since, Yet I see inquiries and thus a lowering of my score.  Makes NO SENSE whether I did (or did not) seek credit situations that MAY mprove my monetary out-flow and then get penalized for making such inquiries.

       I also wonder, what gives ANY private company (eg: Equifax, Trans Union, Experian or anyone else) the right to hold information on any private citizen and hold those arbitrary and often erroneous files, over our heads?  Most of the time these "reports" are made without our knowedge and they are accepted by these agencies as true and factual.  I have one for which I have significant paperwork, from the complaining company, that PROVES their negative report is dead wrong.  I have filed the disclaimer with all 3 agencies and have turned away three credit collection agencies and at least 4 law firms and yet all three Agencies have ignored my communications and kept this error in my record.  Maybe I need to litigate?  Maybe we all need to file a Class Action suit to challenge these agencies existence and ability to function as they do.      

Reply by
SanzSez

1 Contribution
134 People Helped
Helpful to 134 out of 139 people

Scuba1961's.  I am so totally on board with you.  I have had the same thoughts over the years.  It seems opposite what we value you so much in America - that we are innocent until proven guilty.  Not, we are guilty until we hopefully, can prove we are innocent. 

I've also wondered how secure their information is - how much is leaked or whatever.  And what gives them the right to have the details about me and my life?  It seems contrary to my right of privacy.  You just may be on to something!

Reply by
cgd9607

1 Contribution
8 People Helped
Helpful to 8 out of 9 people

Count me in on the lawsuit, mdraveski@gmail.com

Reply by
bretviola

1 Contribution
8 People Helped
Helpful to 8 out of 9 people

I'm in for suit as well if you are willing

Reply by
KABTexico

3 Contributions
0 People Helped

Because it's a game. There is no logic to it. They do what they want to keep themselves employed by creating paperwork.

Reply by
BSmith9569

1 Contribution
105 People Helped
Helpful to 105 out of 107 people

You can got out www.optout.com and this stops creditors from running your credit to see if you qualify for additional deals just because you have credit with them.

Reply by
Jiminewjersey

2 Contributions
0 People Helped

I agree. It is absurd and totally unfair. We all should file ion suit gat these perpetrators..  I wish I knew how.

Top Contributor

Reply by
ANT289

60 Contributions
179 People Helped
Helpful to 1 out of 1 people

If you have the paper work, keep disputing the matter,over and over again. I thought they had to respond and not ignore you. You need to contact the consumer protection group, which name escapes me now. Do a google search for that particular agency, it is government sponsered.It seems like it is a .gov address, virtually speaking. Maybe someone will read this and give an answer. I know for a fact that they cannot ignore your valid complaints.

Reply by
Pawzy

3 Contributions
0 People Helped

I feel your pain, and feel the same way.  It's a crime in my opinion.

Reply by
LibertyIsNotFree

1 Contribution
6 People Helped
Helpful to 6 out of 6 people

I'll join the class action...the credit reporting firms only care about negative comments whether ot not the reports are accurate or not.  They can't sell YOUR information if it is correct and it is dubious whether they can sell YOUR information legally at all.  The class action should include the fact that they resist correcting inaccurate info.  Its about time we took action to not let a third party market our info about us without recourse to malfeance and errors.

1 Contribution
224 People Helped

Helpful to 224 out of 239 people

I think the simulator is broken. I said I would not have a missed payment for 24 months and lower my credit balance by $1000 and credit score didn't change. Then I said I would have a foreclosure and it went up by 15 points! Wtf. So point is people this is just a tool, use your brain when it comes to advise. All websites need to advertise to make money. Just because you read the ads doesn't mean you have to do them to make your credit better. Make your payments on time, have a good credit/debt ratio and you'll be fine. ❤

Reply by
schnealy

2 Contributions
60 People Helped
Helpful to 57 out of 63 people

This is a true story. I input what my score would be once I have 100% on time payments and it lowers my score. This could not be correct.

Reply by
dlp711

1 Contribution
15 People Helped
Helpful to 14 out of 14 people

Very True. I pride myself in paying down my debt and paying on time and now my credit debit ration is looking better and I feel good for having a lower balance on all five of my credit cards. Now its time to reduce some of these credit cards.

Reply by
myar2004

1 Contribution
1 Person Helped
Helpful to 1 out of 3 people

Enter Your Reply on my credit report it says that i have applied 13 times in two years for loans and credit cards and i have not it not far that my credit report is low because these credits cards company check my report i have not the only loan i have apply for was with swineford national bank and i got the loan please stop all these credit cards company stop looking at my credit report if you can. thank you for your help myar2004

Reply by
rodne

1 Contribution
0 People Helped

I am tired of credit scores . all it does is if you get credit you have to pay a very high interest rates... 

2 Contributions
96 People Helped

Helpful to 96 out of 102 people

One of the places that Credit Karma reported to be a good source of rebuilding credit is Lexington Law Frim. Is that an effective way?I've read comments about them and most were favorable. How do they get to eliminate the negatives off one's credit report so efficiently? I'm confused because I thought that it was something that we could do ourselves without having to pay such high fees for this firm to handle it for you. Is it worth the $99/month?

Reply by
Vaudy2000

2 Contributions
298 People Helped
Helpful to 298 out of 307 people

Lexington law firm has done great at getting negative information off my CR....yes, you can take the time and do it yourself, unfortunately for me, I don't have the time and patience....when I signed up with Credit karma it gave me a 558 score..this was back in jan (2013)...same score in feb.....I signed up with Lexington law firm in March....they have removed 11 items off my reports....easy to get ahold of and answer questions....I even signed up for the (scoresense.com) that is recommended by Lexington Law, that give ALL 3 scores...and monitor and alert to changes.....so I have Credit Karma monitoring and supplying the free Trans score....I have Lexington law disputing all negatives on my reports and removing, and I have scoresense supplying me with all 3 scores....anyway, since all of this my score has jumped to 673.....

P.S. I should mention in Nov (2012) I got a 1000 secured CC and have been making ONTIME payments (in full) every month....automatic withdraw......I've also since May (2013) applied for the Amazon store card and Amazon visa debit cards, and approved for 800.00 credit limits...not bad for being denied my whole life for mistakes I made at a young age....well....Good luck in all that you do!!

Reply by
1bad636r

1 Contribution
120 People Helped
Helpful to 120 out of 125 people

I used them I tried everything I could to get old things off my cr and u can do it you're but it does take time and a lot of phone calls and letters with Lexington law I paid 75 a month and they did twice the work I did and got things removed that I tried myself and no luck if u have the extra money and need your score to go up as fast as u can make it I would use them again they did everything I needed and wanted in six months I think it was well worth it hope that helps u 

Reply by
angelreader

1 Contribution
7 People Helped
Helpful to 7 out of 8 people

I have found Lexington Law Firm cery helpful. They tackle it quickly. It is a lot of work to do what they do very effiecianly. They helped raise my score over 60 points so far. Very happy with them. 

Reply by
Ltd7900

2 Contributions
0 People Helped

I used Lexington Law. They did remove some items from my report. Most items still want to be paid though. I only used them for 6 months

Reply by
aaliyahtony

1 Contribution
0 People Helped
Helpful to 0 out of 1 people

Yes it is worth the money. I've tried doing it myself couple times they got it done in 4mths. 

Reply by
LoveLoveLV

3 Contributions
4 People Helped
Helpful to 2 out of 2 people

I did it myself! It took me like ten mins to dispute the stuff on my credit report.They have links and instructions to do so.I did all mine on annualcreditmreport.com (i think that's the website...it's the one where you get your annual free credit report. Not the websites where you get you "free" report only ending up having to pay) I personally wouldn't pay for this service. I've raised my score almost 200 points! 

Reply by
Kowkow70

1 Contribution
0 People Helped
Helpful to 0 out of 1 people

I signed onto them. Back I November.   My score has gone up. 100 points already.   It was well worth the 200 I have spent so far.  

Reply by
Synders

2 Contributions
0 People Helped

It's worth the money, but you don't have to keep it. Let them help you for two or three months and they can wipe out some hard inquiries and some old accounts that shouldn't be on there at all. They seem to know just what to do. After a year or so, if you see your credit score drop, hire them again. You don't need to keep the service but if you can't work on your credit report (it does get confusing) then they are a great source to call.

Reply by
Muath21

1 Contribution
2 People Helped
Helpful to 2 out of 2 people

I had Lexington law frim for 2yrs. Paying $99.99, a month they never did anything good, my score was the same as the rest of my credit report!

Reply by
cdarg

1 Contribution
0 People Helped

They charge a ton of money a month and u never know how long it's gonna take them! I wouldn't do it!!! 

Reply by
FLMom26

3 Contributions
0 People Helped

Nobody can repair you credit score except you!!!  All counties offer credit help for FREE!!!  That is where some of our tax money goes . . . to pay county services.  I am reading this in 2014 so I'm hoping yu haven't been paying anyone $99 a month for all this time when the service is free.  

Reply by
ApoloCreed

1 Contribution
0 People Helped

I'm using Lexington Law and they brought my scores up within 3 mths:) you can drop them anytime after you feel your score is high enough. I know several people who has used them and even got a decent intrest rate for a mortage, I would recommend them highly.

Reply by
Iceman71374

1 Contribution
1 Person Helped
Helpful to 1 out of 2 people

Lexington Law firm is a bad choice.  I used them and then tried to buy a house and went thru 6 months of credit restoration and repair because of lexington law firm.  The do get results but anything they do they do not complete and I was stuck cleaning it up after they pulled the plug and left me holding the bag.

Reply by
sugahnot2

1 Contribution
0 People Helped

Please don't pay anybody to fix your credit.  It is true you can do it yourself.  One of the things I find with Credit Karma is they are not accurate at all.  They are still showing some accounts for me that I paid off in February.  We bought a home and the broker told me that I should pay off these bills and close the accounts.  I did this but Karma shows them still open with balances.  My score was to go up not down.  I kept a few accounts and have low balances but plan to get the three of them down to $100 balances and keep them open.

As for helping you correct your problems, write a letter to Equifax and tell them you want them to contact the other two bureaus on your behalf.  First, get a free credit report from them (you are allowed one per year).  Equifax will do the job but you got to send in a copy of your DL and SS Card which is to protect you.  They will get the other two to send you a copy as well.  Go over each one with a fine tooth comb and take a highlighter and highlight any errors or mistakes.  Then draw up a letter to Equifax and state what you found and the reason for what you believe is wrong.  They have to contact the party and get back to you.  If they do not remove it, write another letter to them and tell them you are disputing the charge.  If it still remains put a fraud alert on your account with a message saying you are disputing the problems and say why and the CB will not remove it.

It took me three months of determination and I finally got them to remove the items as there was not one stitch of documentation supporting the error.  A few accounts were not even mine.  I went as far to call them personally to get more information with the persons name and called Equifax and told them that persons name and was told it was put on my account in error.  So all that finally got off my report.

Continue, even if it means a letter a week.  But keep a copy so if it still remains down the road you have proof that you contaced the Bureau and they refuse to remove the charges that are wrong or not even yours.

Hope this helps.

Reply by
dleadinglady66

1 Contribution
0 People Helped

Kev, no it is not worth it at all.  After working for a mortgage comp for the last 3 years, i have come to find out a lot about credit and how to get the scores down. If you don't keep an eye on it yourself you will be surprise what kind of junk they put on it. If you want help, real help to get incorrect info off your report, you can always get in touch with NFCC (National Foudation for Credit Counseling). They are free of charge and will help you get your budget in order, help you file for incorrect info, they are free of charge,will lower your monhtly payment with creditors, very confidential and did i tell you that they are free of charge??

Get in touch with them and they will then direct you to the closest one in your area if you want to deal with them in person, but they can also handle all info with you over the phone or through email, it is all up to you: NFCC- 18003882227, website is ww.nfcc.org. Give them a try and you will be surprise how they will help you with your credit...... 

Top Contributor

Reply by
bluedog2384

14 Contributions
573 People Helped
Helpful to 1 out of 1 people

As I understand it, you can choose to remove the negatives yourself or have Lexington Law do it for you.  Last year I tried to have an  account -that was not mine- removed from Experian credit report.  The account in question was my mothers. We share the same full name. The effort was a total failure and waste of time.  I received a stock form letter informing me that yes the CC was mine. Total hogwash! A second effort also failed.  After investigating and asking around I found that was the experience of most everyone I asked.   Lexington Law is like your personal pit bull against the credit reporting agencies.  They will stay on it until the credit agency does what they're supposed to do and won't be brushed off by form letters.   However, please be aware they will not be able to remove negative information that is correct.   They can only have information removed that has been reported incorrectly.  Lexington Law's value is they do the seemingly impossible leg work for you.   Good luck!

Reply by
Hurt100points

4 Contributions
1 Person Helped

Lexington Law  did nothing for me except take hundreds of dollars and flood my e-mail with useless info. Then when I cancelled their service they tried to charge me more money for the next months service. I wish I could say something good about them but can't.

Reply by
barbr316

4 Contributions
10 People Helped

Yes, I would highly recommend this firm Iv'e been with them for only a week and they have removed 10 collections already and my score went from having a 588 to a 615 my score went up 27pts already. I've heard they are slow but will get the job done very efficiently. I've tried doing it myself with little response. I am looking forward to working with this company its very worth the money. I have family who have hire this company and as of today are home owners,but everyones case is different for me I have seen growth in a short time............Way to go Lex....Law.

Reply by
TranquilPawz

3 Contributions
2 People Helped
Helpful to 1 out of 1 people

I had an acct. that I had, had for many years.  My husband passed away, I moved back to where my children live in Mich.

The weather and family situation did not work out, I called this company for 3 consecutive months, told them I was going back to Fla.  They refused to turn off the tv programing.  So I asked if they would put the acct in my son's name, they said his credit wasn't good enough to put this acct in his name. It took this company over 4 months to turn the service off.  Every month I received a bill in Fla. for this acct.  Totalling over $550.00.  I contacted Lex. Law and in less than 2 months it was off my credit report.  I did sign a contract with them but it is $59.00 per month.  And the

frustration with this tv company, it was well worth the money

\

Reply by
soonermikel

6 Contributions
12 People Helped

Maybe I missed it...but how much did Lexington Law Firm chage you for their service?

8 Contributions
133 People Helped

Helpful to 84 out of 93 people

Credit scores are tricky  I will never do business with wels fargo bank. I keep one credit card to keep my score up don't close your old credit card and open a new one its like they go by the age of your credit card the older the credit card is the better it helps your score hope this helps 

Reply by
32119

5 Contributions
104 People Helped
Helpful to 88 out of 92 people

I'm with you there. WELLS FARGO is the WORST!!! When my mother passed, (she had all her accounts there with her children listed on the account to POD- PAY ON DEATH), Wells Fargo FROZE HER ACCOUNTS and told us that once you die you can't have a SSAN and if you don't have a SSAN you can't have a bank account. It took me MONTHS To get it released with our Estate Attorney!

Reply by
dizzi2cu

8 Contributions
133 People Helped
Helpful to 26 out of 42 people

that is so true! I keep one credit card it 3 years old but credit karma says it 2 years when it really over 3 years since I had this one credit card with the advise from my credit counselor I bought my credit card for 300 dollars if I close it Iget my 300 back I dont want to do that but my score has not jump yet like it should i paid all bills on time/ credit card on time everything paid off so why is this score 631? should be higher.so I just keep the card older more score stupid how the credit co work.

2 Contributions
75 People Helped

Helpful to 75 out of 88 people

I have a 789 score according CK, I feel that it should be higher and into the 800 range already. The two areas they gave me a C on was History (apparently my oldest account is only 4 and half years old). And a C on total accounts(I have a total of 8 current accounts and 6 closed accounts). I have been utilizing credit cards for at least the past 13 years, I may of closed out older accounts that I should of not, I never realized that this would impact my score though since I never research or bothered to learn about credit scores. I have a 100% when it comes to paying bills on time.

Every year or other year, I tend to take advantage of credit card offers that give tons of miles or reward points upfront. I usually use the card enough to cash in on those points, and then either close the account or just keep it inactive if it does not have a annual fee. Maybe this could be impacting my score? But those offers are so tempting since I actually make money off the credit cards, I tend to purchase things that I already would purchse with my own money. Wether its plane tickets for travel or gift certificates for electronics(iphones,ipads etc). I honestly love credit cards and what they can offer, I have just been lucky that I have been responsible to pay bills on time and not pay any interest unlike a lot of my peers and friends.

I was thinking of opening a new account to get more points and need a CC that has no Foreign Transcation fee since I have started to travel more overseas, and I hate seeing that pesky Foreign transcation fee on my current cards when I need to use it overseas. I hope this does not drop my score when I get around to opening another account or two. I have 3 accounts that I use regularly to pay my bills. I divide each credit card up to how I use it. 1 is for travel(plane tickets, hotels, gas etc).  2nd one is for groceries, food, water etc. 3rd is for entertainment or random purchases that i consider entertainment. The rest of the accounts are a retail store card that I never use but have kept open, and business credit cards used for business purposes only. This allows me to see how much I am spending per year when breaking it down. I find it much easier than just using one card for everything.

I have never had a car loan, personal loan or a mortgage. Would these things help raise my score just over 800 if I did? I just don't have the need to get a car loan when I can buy one paid in cash full(so whats the point?). And I do not plan on purchasing a home or property any time soon.

Reply by
Miniman14

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Helpful to 85 out of 89 people

If you can buy a car in cash why not just put a nice downpayment on it and let the balance automatically debit from a pre funded account? this is one of the ways to build credit easily.

Reply by
hareese86

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Helpful to 96 out of 98 people

Yes, that is probably why you aren't over 800. You have no history of installment loans like auto loans or mortgages. Creditors weight those more heavily than credit cards.

And, there are a couple of good reasons to finance a car instead of paying cash besides building your credit.

1) If you have an investment, say a money market or mutual fund, which gives you a higher APY than the nice low APR you could get the auto loan for with a 789 score, then you'll actually make money by gaining more interest from your money sitting in your investment than what you're losing on the loan.

2) You can save money on the car's purchase price. Car dealers make money from your loan. There are incentives from lenders which make a sale to a financing customer more lucrative than a sale to a cash buyer. You will have more negotiating capital if you make it clear that you can pay cash but will finance if they give you more for your trade (They're also generally more willing to add to a trade than reduce a sale price, FYI, even though it has the same effect for you). I've actually financed a car before just to get my trade up 2000$ more, then paid it off two weeks later.

Reply by
theicemanqcometh

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Helpful to 2 out of 2 people

Yes it will. Getting underwriting will increase your credit score. The way credit works is the more money you borrow and pay back on time, the more money you can borrow the next time.

Since auto loans are substainialy larger than cc cards, and home loans are even larger (and longer) they show credit worthyness for larger and longer amounts.

Unsecured lines of credit and installment loans are great ways to increase your creidt score as well as the amonut of money you can borrow.

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Helpful to 36 out of 40 people

Do NOT use Lexington Law! I was 90 days away from closing on my new home and was trying to just clean up some old mistakes when I was younger, 30 days before I closed the bank pulled another credit report, my credit had dropped so bad I had to pay more than the original interest. LEXINGTON LAW is useless and liars! When I asked for the managing attorney name and contact info (since they claim to be a law firm) nobody would give it to me... Stay far away from LEXINGTON LIARS! You can do a better job on your own and much cheaper

Reply by
cfhughes08

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Helpful to 29 out of 31 people

I agree in that you can do it on your own. I talked to Lexington to hire them but had actually already submitted some disputes to my credit report. I went through with Lexington but then a few days later cancelled since I'm not looking to need a line of credit until another year or 2. Within 30 days of my own disputes my score has jumped 34 points. Everything, except 1, that I disputed was removed from my credit file. 

So, best advice is to do the dispute process yourself FIRST. If you're not successful THEN look at hiring help. 

Best of luck everyone! 

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Helpful to 69 out of 86 people

Have you noticed that Crfedit Karma offers you a "better" card than what you have when they're "saving you Money" well I applied for them and now I have all these Inquiries that knocked my score down even more than what it was EVER! thanks credit karma.

Reply by
donlmangen

1 Contribution
59 People Helped
Helpful to 59 out of 62 people

no one said to apply for more than one.  Its common knowledge more hard inquiries will reduce your score.  Only apply for one thing at a time

Top Contributor

Reply by
takeshi74

988 Contributions
602 People Helped
Helpful to 63 out of 73 people

You only have yourself to blame for applying.  Credit Karma shows you offers but you're the one that has to make the decision based on your situation.

Reply by
ladonnare870

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Helpful to 1 out of 1 people

Yea me too! It recommended a transfere for me and hard check on my credit. Thanks for all the HELP! NOT....

Reply by
chucky430

2 Contributions
0 People Helped

This happened to me as well... Not applying for anything even if credit karma suggests it!

Reply by
chucky430

2 Contributions
0 People Helped

Same thing happened to me... Not applying for anything!

Reply by
ZxKobra

6 Contributions
5 People Helped

LOL how can you blame Credit Karma for something YOU did? Credit ratings are about responsibility. Learn the game before you play it. Just because an ad for a card comes up doesn't always mean you will get it. But sometimes it is worth the risk to try as if you get it and pay it responsibly your score will go up over time and you will get more and better credit offers.

Reply by
Pawzy

3 Contributions
0 People Helped

So true, mine dropped instantly!!!

2 Contributions
74 People Helped

Helpful to 28 out of 38 people

I have an account that shows that it is in collections but the ballance on the account is 00.00 whats up with that?

Reply by
subrosa7mm

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Helpful to 51 out of 54 people

Call the agency and tell them the debt is paid in full. Make sure you are prepared to send them proof (cancelled check or m/o, bank statement etc.). Ask for a letter confirming $0 bal and that your credit report will be updated reflecting this. If not, dispute it with the credit bureaus to have it removed.

Top Contributor

Reply by
ANT289

60 Contributions
179 People Helped
Helpful to 20 out of 21 people

It will show abalance of zero after you have paid. There is a new credit reporting law, which would remove all collections as if you had never had any  collection activity.It actually starts before end of the year, cannot remember exactly which month.

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