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Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308470  
Subject: Re: How to fix credit score? Also why is it so l Date: 8/15/2003 11:00 AM
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The credit card with the late payment should not be closed. A late payment will age out faster on an open account than a closed account. It is not clear if the Truck and Jeep are the current car payments. The car payments are probably lower rates than the credit cards so they should be paid after the credit accounts have been paid off. Some car loans are not simple interest and there is an implicit penalty for paying off the loans early.

Credit inquiries for new credit will affect your credit score. "Soft" inquiries such as your requesting a credit report or marketing requests are treated differently and should not be lowering your credit score.

FICO is somewhat black magic. Late payments are significant. The more recent the more significant. The late payment is 2003 counts more than the older late payments. The credit used to credit available per account and overall matters. The normally recommended quantity of credit cards is 3-4. The age of the accounts also matters.

You have stopped using the accounts. Hopefully, you have already made a plan and budget on how the debt will be paid off.

FICO score is important for more reasons that availability of credit. Many other items such as insurance rates and job applications can be affected.

1.) Make certain all payments are made on time.

2.) Keep the credit card with the late payment open. At least, until the late payment ages out. Late payments on closed accounts are reported for 7 years but only the last couple years of payment is reported for an open account. The late payment on the credit card should age out next year.

3.) Consolidation can hurt your score. Your credit limit is mostly on 4 cards. It is not clear if the quantity of smaller accounts is hurting your score more than they are helping lower your overall percentage of used credit.

4.) Since all of your credit card rates are similar there is no high priority in the cards based on rate.

5.) The card with the highest balance and highest balance to limit is the one with $6,800 balance.

6.) Store credit cards frequently carry the highest interest rates.

The recent late payments may make it difficult to immediately obtain lower rates from the credit card companies or obtain low interest balance transfers. It would be worth the effort to try.

As long as you have your use of credit under control, asking for a credit limit increase on the account with the $6,800 balance would immediately decrease the credit used/credit limit rate for that account. The store credit cards could be closed to compensate for the inceased credit limit.

Debra







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