Maureen Megowan's Blog

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Tip on How to Improve Your FICO Score

I just read an article that has a good suggestion on how to improve your FICO score if you use your credit cards as a convenience only and pay off your balances each month.  If you make your payment just before the cutoff date for the preparation of your monthly statemnet, then the outstanding balance shown by lenders to the credit agencies will be very low.  This helps in two wasy, not only showing low balances, but the ratio of your outstanding balances to your total lines of credit will also be improved.

It is important that you also make a payment fully paying off your reduced statement balance by the due date so that you are not charged late fees or interest.

For more information about Palos Verdes and South Bay Real Estate and buying and selling a home on the Palos Verdes Peninsula, visit my website at http://www.maureenmegowan.com . I try to make this the best real estate web blog in the South Bay Los Angeles and the Palos Verdes Peninsula. I would love to hear your comments or suggestions.

Comment balloon 10 commentsMaureen Megowan • April 13 2010 10:10PM

Comments

Maureen, that is correct. You are right about the ratio of open balances to credit limit on the cards. Another method is to call and ask them to raise your limit. That is another way to reduce that ratio

Posted by Eric J, Dream Home Financing (Eric J - Dream Home Financing) about 9 years ago

Maureen - that is a good idea especially if you are planning on borrowing money.  The required payment becomes very low and allows for a higher monthly payment.

Posted by Iris Shamas (ITS Realty) about 9 years ago

Here's a fun twist from Trans Union. Broker holding deposit because sale did not happen, buyer and seller fighting over it and courts have to decide. The courts ruled fork the deposit over to the buyer but the broker who held it as the escrow agent gets a ding on his credit for the judgement even though it's Joe Broker not the individual. Two and a half years later still working on removing what should never have been placed on the credit record which makes a 100 point drop. $500 deposit, was paid, settle, court records to prove and still Trans Union keeps it parked there. Brokers should worry if this happened just once a year in the many deals you handle, and if that judgement stays on for 7 years, by 7 years you won't have much of a credit score with a 25 or worse in the negative numbers assuming you are usually 825. Beware..you were warned. Work on your state legislatures for credit fairness in reporting, removal, restoration of your good credit which affects rate you get on refinance, anything. Kick in the head for someone that never, never carries a balance on the plastic and it's work related.

Posted by Andrew Mooers | 207.532.6573, Northern Maine Real Estate-Aroostook County Broker (MOOERS REALTY) about 9 years ago

Hi Maureen-

There is a lot that can be done to keep credit scores up and keeping balances low will keep your morale up, too.

Sara

Posted by Sara Woolford & Steve Golson, ALHS (iTexas Realty Co.) about 9 years ago

Great post on  credit scoring....Andrew...that is rather disturbing information!!!  Yikes!!!

Posted by Deborah Byron Leffler BzyBee Real Estate Lady! (Keller Williams Realty Boise) about 9 years ago

Interesting concept - and yet another way to raise your credit score while doing pretty much what you would do anyway, just structuring the timing differently. Thanks for sharing.

Posted by Sharon Alters, Realtor - Homes for Sale Fleming Island FL (Coldwell Banker Vanguard Realty - 904-673-2308) about 9 years ago

The trick is to always make a payment also.  Don't just have the card sitting idle in your wallet.

Posted by Mike Wilbur (Guild Mortgage Company and Oregon Homes For Heroes) about 9 years ago

Thanks for the tips Maureen.  Just a few painless adjustments can raise my credit score, that's great.

Posted by Gary Swanson (Century 21 Harris & Taylor) about 9 years ago

Maureen, many posts. you hit a nerve. thanks

Posted by Bryan Watkins (LRA Real Estate Group) about 9 years ago

In these times it is so important to keep the FICO up....as it could impact a job search as well.  Thanks for the excellent post, Maureen.

Posted by Marcia Hawken, Naples Luxury Specialist (WILLIAM RAVEIS ) about 9 years ago

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