FAQ About Credit Score Estimator
Ken asks…
Does a Credit Score of 620 Qualify for a CITI Student Credit Card?
I guessed my credit score with FICO score estimator on the internet and it was about 620.
Can I get a Citi student credit card?
financial answers:
First you have to be over 21 to get a credit card. New laws were recently passed.
Second, it will be difficult to get a credit card with that score. If so, you’ll get one with an annual fee and high interest rates – which is ridiculous to do.
If you are under 21, get a parent to co-sign on a card for you. Just remember, carrying balances can easily destroy your credit score. So, pay in full each month for what you buy.
David asks…
Is this the best way possible to establish the highest credit score?
(I have 1 year of making my auto loan payments on time and no previous credit history.)
1) Go to my bank and take out a CD for $2,000 that pays interest.
2) Get a secured loan for $1,000 against the CD and pay it off in a year on time.
3) Take $500 to a different bank and establish a security deposit account to qualify for a secured credit card.
4) Repeat this once more at a third bank.
5) Use both credit cards but never charge more than a maximum balance of 9% of the total credit card limit.
6) Pay the minimum payment on a bi-weekly basis by splitting the payment into half.
According to this FICO score estimator my resulting FICO score would be 735-785 in 1 year.
http://www.bankrate.com/brm/fico/calc.asp
financial answers:
Sound like a plan! I would pay the total balance on the credit cards each month instead of the minimum. You have the right idea though; you have to establish a credit history to enjoy a high credit score.
Carol asks…
Unrealistic Credit Score?
I am a college student with a checking card, and a credit card that I have had for about a year but I always pay in full on time, and thus, have never carried a balance. Also, I’ve never had a loan, though I’ve never missed a payment on a bill of any sort.
I just did one of those free credit estimators and it estimated my credit between 715 and 765. These are very good scores and I find it ridiculous that I would have a rating of even 715 with so little financial history.
Would this really be a ballpark range of my score, or does the estimator do a bad job of estimating credit for people in my age group?
financial answers:
Is that an unrealistic score? No.
But the fact is that your history is considered “thin” so any score really won’t carry much weight. Most creditors and lenders like to see at least 2 years of solid history before they start to really consider your credit score.
If you just keep doing what you are doing, in paying on-time and paying off your card every month you will be just fine.
Richard asks…
Will my credit score go up if I pay a delinquent account?
I was on freecreditreport.com and it said I had a delinquent account because I missed a payment. I payed the account off the other day as well as all my other revolving credit accounts. all I have left are school loans. I’m wondering if the next time the credit card companies report if my credit report will still show a delinquent account or if it will eliminate it.
I used the score estimator on the website and it showed that by paying off my cards I should increase my score by 24 points and if I have no delinquent accounts it increases another 42 points. I guess I’m really asking, if when you get a delinquent account will it be taken off my credit score right away or do I have to wait 7 years? That’s what I have been hearing from other people.
financial answers:
The account will update to paid with a $0 balance and will not show as currently delinquent but the missed payment will still show on your payment history.
One missed payment is not really that bad. Just make sure all of your future payments are made as agreed and you will be fine.
And so you will know, it does not drop off after 2 years; it simply switches places where it’s shown.
Your last 24-months history shows in it’s entirety. The missed payment will still show for 7-years but will not effect your score after 24-months.
Betty asks…
Improving a Poor Credit Score!?
I don’t know my actual score, but I did the estimator and I’m guessing it is in the mid 500′s.
I went to college last year and got in way over my head. I was young.. still am, but I realized how important money and credit is. I opened four credit cards last year: two store and two regular. All of them have a balance. I lived off of them all year: not smart. I know!!!
Now, how long do you perceive it will take me to get my credit straightened out. I am on a payment plan and will have all of them paid off by January. Once they are all paid, I know my credit will not boost immediately, but how long should it take? I am moving into an apartment in January and want to make sure I won’t need a co-signer.
I am still in college and I do have college loans out.
I just want a 650 for starters….! HELP!
My total cost of credit debt is:
Capital One: $400 (but limit is $300)
Macys: $200 (limit is $500)
NY and Co: $400 (limit is $200.. missed May and July payment)
Chase: $900 (limit is $600… late fee’s)
I got a new job and have steady income now….
Paying as much as I can each month now, but in January I am paying all of it off completely.
financial answers:
In order to improve your score, you must first know what makes up your score:
1. Payment history – 35%
2. Total debt owed vs. Available credit – 30%
3. Length of time establishing credit – 15%
4. Types of credit established – 10%
5. Inquiries and New accounts – 10%
With that said, I don’t have to tell you that the biggest killer to your score are the late payments. Each late payment can take a chunk out your score each time. So the NY & Co. Card dinged you up pretty good.
Next, you’re more than maxed on 3 cards. Like I mentioned above, that’s the 2nd most important aspect of your score. So, with that in mind, my suggestion would be to tackle the overlimit accounts first, since they’re doing the most damage to your score.
I would pay the minimum payment on the Macy’s. Then pay as much as possible on the Chase, Capital One, and NY & Co. to get those over limit amounts down as quickly as possible. You didn’t mention whether or not if the accounts were still open. It’s important that if they are to get them back in good standing as soon as possible, as this is what’s going to help bring up your score. Depending on how quickly you get those accounts in good standing, it may take a little longer than January before your score starts going back up.
What I would do is take a 2 pronged approach. Pay all the cards off, and save a little bit here and there for a deposit. Because you just can’t rely on just your credit score nowadays. So my advice would be to be patient, start paying everything off and save up to move out.
Linda asks…
Making a store loan for furniture reduces credit?
I did a score estimator at http://www.credit.com/calculators/score/
I need to increase my mix of credit badly. Even though I have great scores with my 2 cards a mix of credit could help. I have nothing else on my credit report.
I did that calculator and realized that my score could go up by the most with a mortgage, a little less with an auto loan, and even less with a student or personal loan.
But when I input the store loan (finance accounts), my score dropped from 804 to 795 – Hypothetical.
I pay both my credit cards in full each month. I put $500 or $1,000 usage each month for the credit cards. I pay in full – but pay when I get the bill in the mail – so the credit reports show a balance.
You’ll see that even though the score is over 800 adding a morgtage (or other loan), all raised my score. But when I input a store finance loan – the score went down to 795. Nothing else was changed.
Who can tell me why a store loan would actually reduce your credit score? When all others (one at a time) increase my score?
Is it the same concept as to why leasing a car reduces your credit so much?
Is it also considered subprime by the fico?
If so, the fico scoring system needs to be disclosed so people know when they are hurting their own credit.
Can someone input their own information and see if adding a furniture finance account reduces their score?
financial answers:
A department store like Penney’s or Macy’s is fine. But if you get a loan from a used car dealer or a furniture store, it’s probably a finance company loan. Those loans are the kind people who don’t have good credit get. Not nice, but there you go.
If you dig around on the three bureau’s websites they do tell you a lot of things you might not intuitively know about credit. You can look at the site anytime you like.
Experian.com
Equifax.com
TransUnion.com
Chris asks…
Do late payments, delinquencies, defaults ever disappear from your credit record?
I’ve heard that negative things stay on the credit report for 7 to 10 years. Online FICO score estimators will ask if you have EVER been late on any bill. That suggests that some things just don’t disappear.
financial answers:
You can have all of these removed in a couple of months. Check out my 37 Days to Clean Credit review. That guide will explain how to maximizing your score fast.
Mark asks…
Credit score on renting a house? Should we be okay?
My fiance and me are looking to rent a place and we recently found one and paid the credit check price of £125. Im not sure what our credit rating is, but I found an estimator site saying its about 700 give or take.
I will give you the financial info to see if that helps my question.. We have a joint account, we earn roughly £1200 a month (although this is the minimun amount as we do a lot of overtime!!!) My fiance has £130 of commitments a month. Although we go into overdraft a little bit we always get out of it within 2 weeks max. He has £1400 debt on his credit card but never misses a payment. Thanks if you can help me.
financial answers:
The credit check shouldn’t be a problem, but affordability is something they will check.
You need to earn (before tax) 2½ times your annual rent.
If you’ve both been employed full time for 6 months, then you can add your income together to reach that. If one of you hasn’t then it’s 2½ x the one that has.
You will also need a good reference from employer and ex-landlord.
If you can’t do any of the above you will probably need someone to legally guarantee that you’ll pay your rent – they will need to be checked out too (and pay)
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