Updated on 06.05.14

A Reader On The Cusp Of A Great Credit Rating

Trent Hamm

A reader recently sent in this question about her boyfriend’s credit, which seems to be on the cusp of being quite good.

My boyfriend was recently denied financing on a used upright piano because of poor credit. He actually has enough cash saved to buy it outright, but the fact that he couldn’t receive financing was a wake-up call.

Neither of us had checked our credit reports in about two years, so we both ran them through the government’s free program. His score is 611 and mine is 718. So, while I’m doing OK and already know what I need to do to get a higher score (namely just continue to pay down my credit card as quickly as possible), he’s in a trickier position. The key problem is that he’s never had a credit card and just doesn’t have much credit history; he was trying to be smart and not get caught up in credit card debt. He only has one late payment noted on his account and it’s from when he was 18 (he’s 26 now). I recommended that he open an account right away, use it to buy a few things every month, and then pay it off each month. He has a car payment and student loans which he pays on-time, but that’s about it.

Do you have any tips for improving his credit quickly? The two things he’s going to do now are: 1) Sign up for a credit card and pay it off each month; 2) Look into a couple things on the credit report that don’t seem quite right. I realize that it takes a while to build credit (I’ve had a credit card for 8 years, and it still says that one factor counting against me is a short credit history). It’s very likely that we’ll be getting married and looking to buy our own home in the next 5 years, and we want to do everything we can to set ourselves up for financial success.

First of all, his credit score is likely 611 mostly because of a lack of credit history. Most people begin to build their credit report – good or bad – during their late teens and early twenties largely with credit cards. Although he has some credit (the student loans and car payments), the lack of at least a small amount of revolving consumer debt (i.e., credit cards) has prevented him from having a higher score.

Now, about that late payment: if he made the error when he was 18 and he’s now 26, it should be very close to disappearing from his credit report, as late payments only stick around for seven years. If you pull out your full credit report (you did keep a copy, I hope), check and see when the exact date of the late payment ding was. When that’s more than seven years ago (right now, stuff in 2000 is starting to vanish from credit reports), it disappears from the credit report. If that’s truly the only negative mark on the report, his score should see some sort of bump after the late payment goes away.

So, what can he do to actively raise his score? The two suggestions you gave are both great ones (check out anything odd on his report and have him get his own credit card and use it regularly for small purchases). You didn’t really specify what the “odd” parts of the report are, but if you don’t know what something is on your credit report, you need to track it down and be sure. My wife and I went through this recently before we went in to get preapproved for our mortgage, and it was a good move.

About your credit score: Yours is 718. Keep doing what you’re doing now and you should be fine. Don’t cancel your oldest credit card, no matter what. If you keep the card paid faithfully and also don’t make other late payments on other bills, it’ll all work out just fine and your score will inch upward. Honestly, though, you don’t have much further to go before housing lenders will be 100% okay with your number.

Another thing that you both should do is really understand how your FICO score works and also know ten common mistakes to avoid when trying to raise your credit score. Both of those articles should offer some great additional advice to help you out. Good luck!

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  1. Gal Josefsberg says:

    That comment about canceling cards is true only if you have no other old cards. For example, you really shouldn’t have more than 3 or 4 cards. So if you have 5 or more, and all of them have seven years of history, canceling the old one won’t hurt you that much. The key is having multiple lines of credit with many years of good history on all of them.

    Other than getting rid of mistakes, there’s really no way to improve a credit score fast. Just need to build up credit over time.

    I made the mistake of canceling my old card when I didn’t have any other cards with a long history. However, I still have a score of 780. I have three cards, the oldest one about three years old. I use two of them regularly and always pay them off on time. I also pay my mortgage on time, never use up more than 50% of my available credit card limit and never incur any other debt. Just be smart with your credit and your score will do well.

  2. Gal Josefsberg says:

    Sorry, one more thing to add. There was a recent article about jump starting your credit for those without a lot of credit history. I believe one of the items mentioned was having someone else put you as a cosigner on their card, especially if that card has a long and good history. Perhaps Trent could comment on this.

  3. Blick says:

    The post mentions that they ran their credit reports through annualcreditreport.com, the government’s free program, and received their credit scores. When I tried, I was able to get my report, but not the score. Is there a way to get the score for free, or do you still need a pay a fee for that?

  4. Trent Hamm Trent says:

    Gal: Cosigners enable you to improve your credit, but it’s at least somewhat risky for the cosigner, as they’re on the hook if the person with questionable credit makes bad choices.

    As for the offer, my guess is that they got their credit report for free, then paid for their score somewhere.

  5. Shawn says:

    Why bother raising your credit score? As Dave Ramsey loves to point out; the FICO score is nothing but an “I love debt” score. The only thing one should really worry about financing is a house and that can be manually underwritten. I know that some insurance policies are now tied to the credit score but all are not and that can be worked around.

  6. reannon says:

    Thanks for replying to my email, Trent! Blick: We got the free credit report and then paid $8 to get the credit score.

  7. rhbee says:

    I recently decided to check out the free credit report service but when I went on line I discovered that they wanted more proof of who I was than I was prepared to give. So I searched out a phone number so I could talk to a real peason. But this real person wanted the same thing, what were my present credit cards and their numbers. Since I’d already given my driver’s license and SS, I was really puzzled as to why the credit service that was issuing the report wouldn’t already have my credit card info. It really seemed to me like they didn’t actually have what they said they had. They wanted me to report to them so they could then report back to me.

  8. !wanda says:

    I agree that the current system makes it hard for some people to get their credit score. The first time I tried to get my credit report, the online form said I could type in either my last two residences or two credit card numbers. Well, I was a graduate student and had lived at my current address for 3 months, my former address for 2.5 months, and the one before that for less than a year; I was unsure which of those “counted” and had forgotten some of the details anyway! For the credit card numbers, it was lucky that I had two credit cards (one was cosigned by my mom ages ago, and I never use it). I can imagine people new to credit who move a lot and need to look at their credit history but are unable to fulfill the requirements to see them.

  9. Ted Valentine says:

    1. Never cosign for another person unless you are 100% willing to lose that money and that person as a friend. Seriously. Cosigning is just dumb.

    2. You can’t get the score for free at the website – just your report. You have to pay for the score.

    3. You can get your score for “free” if you’ve applied for a mortgage. I say “free” because the lender will charge for services.

    4. I got a mortgage with a very low credit score. I followed Dave Ramsey’s plan and had NO DEBT and no credit cards. They flagged us at first because lenders assume everyone has debt.

    5. When you go to annualcreditreport.com they will ask you test questions about your information because they want to make sure it is you. I was surprised at first, but it is a security measure to prevent someone from easily stealing your identity.

  10. Ted Valentine says:

    6. You link attached to “the government’s free program” is broken. You have a semicolon where a colon should be.

  11. Lisa says:

    It is not the “GOVERNMENT’S free program.”

    It does help consumers get the free annual reports from three nationwide consumer credit reporting companies (Equifax, Experian and TransUnion) that the law requires though.

  12. S says:

    Hard lesson learned over and over again NEVER lend money to family!!!!

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