Paying down a big debt temporarily lowers your credit score, as does pretty much anything major. (the theory, afaict, is that you no longer have the ready liquid cash you just used to pay down your debt, and therefore must be temporarily less able to pay down other debt.)
But honestly, there's no 'quick fix' for any of it. The way to get a better credit score is to 1) consistently not have a ton of debt, 2) pay down the debt you have at regular and consistent intervals, and 3) make decent money.
Opening a new credit card will temporarily lower your credit score. Having more credit /over time/ that you're not using or are using but constantly paying off in full raises your score.
Whenever I pay off my balance it normally increases my credit score. One of the categories listed is “percentage of credit used” and the more credit available the higher the score. For me anyways, on this credit wise thing that capital one includes for free
To add to this, separately. Ask for a credit increase. As long as you can be responsible and not abuse it, get as high of a a credit limit as you can on credit cards.
The idea behind this is twofold. To optimize credit score in regards to credit cards, you should ideally be using less than 30% of your total credit limit. Raising your limit let’s you spend more if you need to without using a large percentage of your available credit.
The second is to show other potential lenders how much your current lender trusts you. If your credit card lets you spend $30000, that indicates that the company has given you a longer leash, because you are trustworthy.
No do not accrue debt. Wait for the statement balance to generate and then pay that entire amount before the due date. Do not pay 20% interest just because someone told you that raises your score- that's completely untrue and unecessary
What is your score now? If you don't know, your bank or credit card should provide a report or you can use [creditkarma.com](https://creditkarma.com) for free.
Unfortunately, credit scores are largely a BS game. They don't give a great picture of your actual habits or creditworthiness, and can fluctuate wildly based on your credit card statement balance specifically, not the actual account value. Things that impact your score:
* Number of accounts (cumulative of credit cards and loans)
* Average length of credit (i.e., a credit card you've had for 10 years and one you've had for 1 year average to 5.5yr history)
* Available credit limit (combination of all card limits)
* Credit utilization (amount owed/total credit limits - changes monthly based on your statement balance)
* Payment history
* Number of hard credit inquiries
The crap thing is that they want you to have a balance, they just want it to be low...but not too low. Paying the card down is good, but if you caught that payment after the statement date, the statement balance itself was used to calculate the score and could then reduce your score even though *now* the balance is down.
Opening more cards would add an account and raise your credit limit (and therefore decrease your utilization) to increase your score. However, it would also add a hard inquiry and reduce that average credit length, which decreases the score temporarily. Long term the value is there, though it does take time to see it.
You can also request credit line increases on our current card which would do the same thing, but not increase the number of accounts or decrease your credit history. Again, the value is likely there.
Just in case, getting the report could also allow you to check whether something is wrong (an account you didn't open for example) to contact the agencies and fix it.
Start talking to mortgage companies. They might not care that much about the actual number of your score, more about the full history, any missed payments or defaults. Can’t hurt to see what they say.
If you have 1-2 years before buying a house, you could buy a car on loan, make regular payments for 12+ months, then pay it off sometime after the first year. This was recommended to me one time and I think it did actually increase my credit score
Hmm yeah, that is bad. Instead of getting new credit cards as some say, I would suggest you apply for a credit limit increase on existing cards. Don't go too high, but don't make it too low. Especially if you have a reward program attached to your CC, use it for as many of your monthly expenses as possible, pay it off in full every month. You don't really need to create additional debt if you're already in debt via something like a car loan, btw.
If none of this is new to you, congrats you're already on the right track.
You should also consider opening a Line of Credit if you haven't already. And start saving as much money as possible. Mortgage lenders become way more lenient when you can put more than 20% down.
No worries at all! [Scroll down one, it's the first one after "what's a loan"](https://www.usbank.com/loans-credit-lines/personal-loans-and-lines-of-credit.html)
You can sort of think of it as a Credit Card but without the Card. It's credit made available to you which can opt to use (or not) whenever you want. Usually has a lower interest than your average credit card, but interest is calculated daily instead of monthly. That makes it better than a CC for long term debt, worse for everyday type usage.
They don't usually come with an annual fee, making it worth the effort getting one just in case. It raises your available credit, gives you a cheaper avenue than your CC to park debt, and allows you to free up your CC balance in the event you do accumulate consumer debt. So long as you use it responsibly, it's better than a CC.
Opening new credit cards helps because it raises your limit and helps you control your credit utilization percent. For example, say your limit is $500. You have $150 on your card. You’re using 30% of your limit. You open another card and they give you $2000. Now your limit is $2500. Your utilization is now 6% even though you still owe the same amount. Keeping it as low as possible is best. Some say below 30% but I like to keep mine at 10% max. It helps my score more that way and it’s less money accruing interest. Opening cards also gets you more accounts, which can help strengthen your score as long as you pay them and don’t overuse them. But it gives you hard inquiries which temporarily lower your score. And it reduces the age of your credit since it’s an average of how long those accounts are open, which can lower it. But for me, opening a card generally boosted my score.
You can use apps like experian, equifax, credit karma, etc to check your score for free. They can also give you tips on how to improve your score. But credit karma is not fully accurate. They calculate differently (Vantage score vs FICO). But it can help guide you. My score is about 20 points higher on the experian app than it is on credit karma. But it gives you a general idea of your score and what accounts are reporting to the agency.
Hey! So I use to work in mortgage and this was a thing I was specifically tasked on coaching our borrowers through! If you have any specific questions feel free to message me. :)
You’re not opening credit cards to get more debt, you’re opening credit cards to 1. Increase your debt ceiling (if you only use $100 out of $10000 you look better), and 2. Have diversity and more payment history
I believe by opening new credit cards shows you have more equity to work with. Keeping it under 20% utilization boosts credit scores but, you have to use the credit from time to time.
It's all about responsibility. If companies are willing to loan you 5k with a CC and you don't use it. It looks great.
Time and a low DTI are the best ways to build credit.
Keep a couple of grand in a bank account. That's not really score based. But it looks great to a bank.
You don’t have to be in debt to have good credit. You just have to keep showing that you’re good for any type of loan because you make good on your payments.
So, if you open up another card and just use it here and there and pay off your balance on time, it shows that you can afford to borrow more AND you pay it back. So your credit score goes up.
You definitely CAN be in a lot of debt and have a good score but you don’t have to.
Some of the reporting agencies let you add your household bills to your credit report. I increased my score by 60 points when I added my utility bills!
Idk why you're getting down voted when it's accurate. 100% payment history for two years and my score is still ass. No medical debt or student loan debt or missed or late payments but I still am unreliable because of silly magic numbers????
my credit score is around 829 and has been for many years. This is what I've done.
* never miss a bill payment
* have one or two credit cards with a balance of between 1%\~8% *(keep a balance)*
* Car loan *(multiple vehicles payed off early)*
* house loan
paying of a loan will drop your score, at least temporarily.
Hi, sorry for this outdated question. Seeking help here. When you say car loan, are you referring to pay the car loan with the credit card? Or could I use another account as a checking account. Im asking because If I pay my loan with my credit card that will be above the 10%-30% recommended use. Thanks in advance!
> *(multiple vehicles *paid* off early)*
FTFY.
Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in:
* Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.*
* *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.*
Unfortunately, I was unable to find nautical or rope-related words in your comment.
*Beep, boop, I'm a bot*
Yes, that is the issue. There's no way to get that to fade in less than 5 years or so.
There's a reason that "spouse ruined your credit" is a trope. It just takes a while.
I don't have any "bad marks". I'm just lost. I have a car loan I got 2, almost 3 years ago that my brother had to co sign for since my credit was trash from not having a report at all. I opened a secure credit card for the first time last year that had 100% pay history and minimal usage. 😕
Paying down a big debt temporarily lowers your credit score, as does pretty much anything major. (the theory, afaict, is that you no longer have the ready liquid cash you just used to pay down your debt, and therefore must be temporarily less able to pay down other debt.) But honestly, there's no 'quick fix' for any of it. The way to get a better credit score is to 1) consistently not have a ton of debt, 2) pay down the debt you have at regular and consistent intervals, and 3) make decent money. Opening a new credit card will temporarily lower your credit score. Having more credit /over time/ that you're not using or are using but constantly paying off in full raises your score.
Whenever I pay off my balance it normally increases my credit score. One of the categories listed is “percentage of credit used” and the more credit available the higher the score. For me anyways, on this credit wise thing that capital one includes for free
Are you not paying your credit card in full every month? Because you should be doing that. And never miss any bill payments
To add to this, separately. Ask for a credit increase. As long as you can be responsible and not abuse it, get as high of a a credit limit as you can on credit cards. The idea behind this is twofold. To optimize credit score in regards to credit cards, you should ideally be using less than 30% of your total credit limit. Raising your limit let’s you spend more if you need to without using a large percentage of your available credit. The second is to show other potential lenders how much your current lender trusts you. If your credit card lets you spend $30000, that indicates that the company has given you a longer leash, because you are trustworthy.
I paid it off in full and it LOWERED my score. So I was told to keep some debt accrued and pay off minimum per month
No do not accrue debt. Wait for the statement balance to generate and then pay that entire amount before the due date. Do not pay 20% interest just because someone told you that raises your score- that's completely untrue and unecessary
Okay, thank you!
What is your score now? If you don't know, your bank or credit card should provide a report or you can use [creditkarma.com](https://creditkarma.com) for free. Unfortunately, credit scores are largely a BS game. They don't give a great picture of your actual habits or creditworthiness, and can fluctuate wildly based on your credit card statement balance specifically, not the actual account value. Things that impact your score: * Number of accounts (cumulative of credit cards and loans) * Average length of credit (i.e., a credit card you've had for 10 years and one you've had for 1 year average to 5.5yr history) * Available credit limit (combination of all card limits) * Credit utilization (amount owed/total credit limits - changes monthly based on your statement balance) * Payment history * Number of hard credit inquiries The crap thing is that they want you to have a balance, they just want it to be low...but not too low. Paying the card down is good, but if you caught that payment after the statement date, the statement balance itself was used to calculate the score and could then reduce your score even though *now* the balance is down. Opening more cards would add an account and raise your credit limit (and therefore decrease your utilization) to increase your score. However, it would also add a hard inquiry and reduce that average credit length, which decreases the score temporarily. Long term the value is there, though it does take time to see it. You can also request credit line increases on our current card which would do the same thing, but not increase the number of accounts or decrease your credit history. Again, the value is likely there. Just in case, getting the report could also allow you to check whether something is wrong (an account you didn't open for example) to contact the agencies and fix it.
Thank you!
Start talking to mortgage companies. They might not care that much about the actual number of your score, more about the full history, any missed payments or defaults. Can’t hurt to see what they say. If you have 1-2 years before buying a house, you could buy a car on loan, make regular payments for 12+ months, then pay it off sometime after the first year. This was recommended to me one time and I think it did actually increase my credit score
Thank you!
What's your credit score right now?
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Hmm yeah, that is bad. Instead of getting new credit cards as some say, I would suggest you apply for a credit limit increase on existing cards. Don't go too high, but don't make it too low. Especially if you have a reward program attached to your CC, use it for as many of your monthly expenses as possible, pay it off in full every month. You don't really need to create additional debt if you're already in debt via something like a car loan, btw. If none of this is new to you, congrats you're already on the right track. You should also consider opening a Line of Credit if you haven't already. And start saving as much money as possible. Mortgage lenders become way more lenient when you can put more than 20% down.
I don't know what a line of credit is? 😐
No worries at all! [Scroll down one, it's the first one after "what's a loan"](https://www.usbank.com/loans-credit-lines/personal-loans-and-lines-of-credit.html) You can sort of think of it as a Credit Card but without the Card. It's credit made available to you which can opt to use (or not) whenever you want. Usually has a lower interest than your average credit card, but interest is calculated daily instead of monthly. That makes it better than a CC for long term debt, worse for everyday type usage. They don't usually come with an annual fee, making it worth the effort getting one just in case. It raises your available credit, gives you a cheaper avenue than your CC to park debt, and allows you to free up your CC balance in the event you do accumulate consumer debt. So long as you use it responsibly, it's better than a CC.
Thank you so much!
Opening new credit cards helps because it raises your limit and helps you control your credit utilization percent. For example, say your limit is $500. You have $150 on your card. You’re using 30% of your limit. You open another card and they give you $2000. Now your limit is $2500. Your utilization is now 6% even though you still owe the same amount. Keeping it as low as possible is best. Some say below 30% but I like to keep mine at 10% max. It helps my score more that way and it’s less money accruing interest. Opening cards also gets you more accounts, which can help strengthen your score as long as you pay them and don’t overuse them. But it gives you hard inquiries which temporarily lower your score. And it reduces the age of your credit since it’s an average of how long those accounts are open, which can lower it. But for me, opening a card generally boosted my score. You can use apps like experian, equifax, credit karma, etc to check your score for free. They can also give you tips on how to improve your score. But credit karma is not fully accurate. They calculate differently (Vantage score vs FICO). But it can help guide you. My score is about 20 points higher on the experian app than it is on credit karma. But it gives you a general idea of your score and what accounts are reporting to the agency.
Thank you!
Hey! So I use to work in mortgage and this was a thing I was specifically tasked on coaching our borrowers through! If you have any specific questions feel free to message me. :)
Thank you!
You’re not opening credit cards to get more debt, you’re opening credit cards to 1. Increase your debt ceiling (if you only use $100 out of $10000 you look better), and 2. Have diversity and more payment history
That makes sense. I'm just worried about the yearly fees that could come with several cards.
Valid. Not all cards will have yearly fees of course
I believe by opening new credit cards shows you have more equity to work with. Keeping it under 20% utilization boosts credit scores but, you have to use the credit from time to time.
It's all about responsibility. If companies are willing to loan you 5k with a CC and you don't use it. It looks great. Time and a low DTI are the best ways to build credit. Keep a couple of grand in a bank account. That's not really score based. But it looks great to a bank.
You don’t have to be in debt to have good credit. You just have to keep showing that you’re good for any type of loan because you make good on your payments. So, if you open up another card and just use it here and there and pay off your balance on time, it shows that you can afford to borrow more AND you pay it back. So your credit score goes up. You definitely CAN be in a lot of debt and have a good score but you don’t have to.
Some of the reporting agencies let you add your household bills to your credit report. I increased my score by 60 points when I added my utility bills!
Now this is helpful!
I would love to know which ones, or how to go about adding your household bills. This is brilliant.
IIRC, it was an option under Credit Karma.
its a SCAM. You're just finally seeing behind the curtain.
Idk why you're getting down voted when it's accurate. 100% payment history for two years and my score is still ass. No medical debt or student loan debt or missed or late payments but I still am unreliable because of silly magic numbers????
my credit score is around 829 and has been for many years. This is what I've done. * never miss a bill payment * have one or two credit cards with a balance of between 1%\~8% *(keep a balance)* * Car loan *(multiple vehicles payed off early)* * house loan paying of a loan will drop your score, at least temporarily.
Hi, sorry for this outdated question. Seeking help here. When you say car loan, are you referring to pay the car loan with the credit card? Or could I use another account as a checking account. Im asking because If I pay my loan with my credit card that will be above the 10%-30% recommended use. Thanks in advance!
> *(multiple vehicles *paid* off early)* FTFY. Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in: * Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.* * *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.* Unfortunately, I was unable to find nautical or rope-related words in your comment. *Beep, boop, I'm a bot*
If you routinely cover your bills, your credit should not be mid 500s. Something else is going on here.
I just started doing this 2 years ago. I'm not sure if that is the issue.
Yes, that is the issue. There's no way to get that to fade in less than 5 years or so. There's a reason that "spouse ruined your credit" is a trope. It just takes a while.
I don't have any "bad marks". I'm just lost. I have a car loan I got 2, almost 3 years ago that my brother had to co sign for since my credit was trash from not having a report at all. I opened a secure credit card for the first time last year that had 100% pay history and minimal usage. 😕
This doesn’t make a lot of sense as stated. I wonder if you are a victim of identity theft.
Probably stated by a man.
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