Improve your credit score – too much credit?

by Tom Tousignant

in Blog, Financial Safety, Mortgages

When you got a copy of your credit report (www.annualcreditreport.com) last week, I asked you to count your tradelines.  If you didn’t get your credit report yet, read this post first on how & why.  If you have been using credit for more than 10 years and have no late payments, you are at a place where you likely want to start using less credit.

The people I see with 800+ credit scores will have  a very good, long credit history, with never a late payment, collection account, or bad debt, and they will have very few active accounts.

  • Pick 2 credit cards to keep open – usually Visa, MasterCard, or American Express, not department store or gasoline cards.  Pick the cards with the longest time open as well.
    Sample VISA, MasterCard or Discover Card featu...
    Image via Wikipedia

Closing the other cards will not impact your score as you have a strong credit history.  If you have any blemishes on your report – skip this step!  It’s only to help someone go from really good credit score to outstanding, like  a 760 to an 800.

  • Never miss a payment date.  In fact, I usually pay off both my cards in full every two weeks when I get paid to never let the balance get high.  You have to keep balances extremely low – like 10-20% of the maximum limit to have an 800 score.
  • Stop new offers from coming in.  Visit www.Optoutprescreen.com to have your information blocked from credit card offers. This reduces the chances of fraud, identity theft, and new inquiries on your credit report.

Ideally, to get an 800 plus credit score you will have:

  • Mortgage Loan
  • 2nd Mortgage (Optional if needed)
  • Auto Loan
  • 2-3 Credit Cards that have been open for many year with very low balances

In my next post, I will show ways to get to a 740 FICO if you aren’t there yet.

I am offering a complimentary review of credit this month – if you want me to look over your report, email me for more information on this free, no obligation offer.

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