A Reader On The Cusp Of A Great Credit Rating

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!

Trent Hamm

Founder & Columnist

Trent Hamm founded The Simple Dollar in 2006 and still writes a daily column on personal finance. He’s the author of three books published by Simon & Schuster and Financial Times Press, has contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and his financial advice has been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.