Boosting My Credit Score

I recently paid off our home equity line only to see that my credit score dropped from 777 to 769. I have no other debt, pay off my credit card each month, have never had any negative info reported on me and pay bills on time every time! How can I boost my credit score which I believe should be 800+!

Any advice or suggestions would be greatly appreciated!

Credit scores will fluctuate depending on the data that changes in your credit reports -- so an 8 point difference from last month isn't unusual. Paying off the HELOC didn't lower your score. Something else in your credit reports had to have changed. From the sounds of it, it may even have been the balances on your credit cards. Even if you pay off your cards each month (which is great), the balance would have to be reported at the credit bureaus for it to be reflected as a 0 balance in your credit reports. Typically, your credit report will contain whatever was reported on your last statement and the only way to get your balance to reflect 0 is to pay off the card and stop using it for a month or two until the credit card issuer reports the update to the credit bureaus. This is a smart strategy if you're planning on applying for a loan - plan ahead a 2-3 months so that you can go in with the highest score possible.

As far as your scores go, you are in great shape and obviously are doing an excellent job at managing your credit. And I have to be honest, when your scores are over 750, trying to finagle the system to get to that 800 mark usually ends up backfiring and you could end up causing more damage than good -- so keep that in mind. My advice? Keep doing what you've been doing and be confident in the fact that you have excellent credit in an environment when you need it most. If there were ever a time to have excellent credit, now is it.

Having said this, if you ordered your scores through myFICO, the reports are returned with score factors or reason codes that explain where you lost the most points in the score calculation. If you're determined to reach that 800 spot, go back to your reports and read through those explanations. They are listed in the order of most importance and are different for everyone depending on the data in your credit reports. So what may be good advice for someone else, might not be good advice for you.

Hope this helps!

My credit score is 694. I would like to know if it would improve, or hurt my credit score, if I closed a couple of credit card accounts or should I leave them open? For the at least the last three years, or so, I have made all payments ahead of time and paid extra on the credit card accounts. I have automatic payments set up for the home mortgage, boat, both vehicles, phone, electric, water, etc. We have four or five credit cards, with credit limits ranging from $5000 to $8500. I guess I should correct that number to three or four credit cards...After receiving a letter from Capitol One earlier this week, advising they would be raising our interest rate to 22+%, I paid off all of the card balances yesterday and emailed Capitol One to tell them to close that account as soon as the online payment posts. We have been with them for several years. I told them, in the email, that I refuse to do business with a credit card company that would raise our interest rate to 22% when we have always paid early and always paid extra. Should I close the other accounts or leave them open? We also have three debit cards but I don't think they showed on the credit report and I also noticed that the bank that both of our vehicle payments are financed with do not report that the payments are made on time. The bank is listed on the credit report but I was disappointed to see that they do not reflect our on-time payments. We have been paying on the Prius for 15 months and the Jeep for a year longer than that. I wondered if I should call them (the bank) to ask about it. I also thought about going online to see about advice on setting up a budget. Any advice you can give me would be greatly appreciated.

Thank you,
Mrs Howdy

Ouch! I wish I had caught you before you sent the letter of to CapOne requesting they close your account. Don't close any more of your credit card accounts! Closing them could have a detrimental impact on yours scores!

I know it's frustrating but even though your first reaction might be to close an account, it's not the best strategy for your credit scores and can actually backfire and lower your scores. This is because a large percentage of your scores is based your revolving utilization percentage - in english, this is the proportion of your balances to your credit limits. When you close an account, your amount of available credit decreases, which could cause a spike in your revolving utilization and lower your scores. I know it's frustrating but the best thing to do to protect your scores is to pay off the account and simply stop using it - don't close it.

If it helps, you're not alone and CapOne isn't the only credit card issuer that has increased rates on their customers. Over the last few months it's happened to almost all of us - myself included.

As for your other questions, I've answered them in order:

The reason you aren't seeing your debit cards in your credit reports is because they are like checking accounts - and checking account information isn't reported in your credit reports.

If your auto loans are not showing up in your credit reports, you might want to call the bank and request that they report them for you so that you get the positive credit for the accounts. However, credit reporting is completely voluntary so legally the lender doesn't have to report the loan. This is also why in some cases you'll see a lender report to one bureau but not all three.

Setting up a budget - our learning center has some great tips and information to help you get started with a budget. You should be able to find what you're looking for here:

Create a Family Budget
Do-it-Yourself Debt Reduction

My credit score right now is 605, I have one item that's current and that is my monthly car note which I've never been late paying. I want to try and boost my credit score, I was wondering if I should apply for a dept. store charge card or will doing that impact my score in a negative way? I'm very leary of having inquiries on my credit report since I know too many can have a negative impact as well. currently I have 2 inguiries, 1 in the early part of this year (Jan) and 1 in Jun of last year. Would it be beneficial for me to get a store card or just stay with 1 item I'm paying on right now and let my score build gradually