Comment on Anon tries to understand credit scores
sp3ctr4l@lemmy.dbzer0.com 6 days ago
Its a very complex system of math and rules, but it isn’t impossible to … raise your credit score.
Closing a loan or credit line actually often lowers your score because it lessens the total amount of credit you theoretically could be using, if you maxxed everything out.
Your ‘Credit Utilization’ is what % of your total maximum possible credit you are using.
So, when you finally pay off a huge loan of some kind… well, that account closes, and now your relative credit utilization probably goes up, because the system is now only looking at say your credit cards, not them + your big loan.
So basically, you should actually never close down a credit account of any kind, after you fully pay it off. Just… use it sparingly, or put the card in a safe, destroy it, who cares, as long as the account still exists.
(big asterisk on that: unless it has some kind of regular due payment just to even have the account, even if you’re not using it at all)
Thats also true because another big factor in credit scores is how long you’ve had the accounts you have.
It literally does just take time to build up that element of it, time of you making regular payments and never leaving a balance that rolls over into the next month.
Number of regular payments made on time vs number of missed payments is another big factor of credit models.
I’m not trying to defend this system, its horseshit, truly evil.
I’m trying to summarize useful advice.
I was homeless for 2 years.
When I finally got a bit more stabilized, I had scores around 520, because yeah, I spent money I didn’t have so that I could eat, and not sleep outside in blizzards and heatwaves.
Its now been about 2 years since that point, and I’m up to between 670 and 710, the 3 agencies still considerably disagree as to which accounts I even had… as I got mugged and had my identity stolen multiple times, and I was only able to convince different agencies of different amounts and extents of that… and also crippled by those muggings…
But the point is, its not impossible to rebuild your credit, even while you’re living off of only SSDI as I now am.
Its exceedingly dfficult to do so, but not strictly impossible.
BanMe@lemmy.world 6 days ago
So what do you do when you pay off a CC to improve your utilization, and they close the card without warning, and your score drops?
damnedfurry@lemmy.world 6 days ago
No CC gets instantly closed when you pay it off. I pay my CCs off every single month.
sp3ctr4l@lemmy.dbzer0.com 6 days ago
If they close your card without warning, well, then you can’t really do much about that.
There’s probably some other factors that went into them deciding to do that, late or missed payments, something lile that.
So… I think Kikoff and Kovo both offer variations on this idea, but I’m familiar with the Kikoff one:
You pay them $10 bucks a month. For a year. At the end of that, you can eithet renew it, or l, they just give you $120 bucks, they give you your money back.
While for most people this is probably pointless, if you’ve missed a lot of payments, doing something like this can help chip away at improving your on time payment record.
Kikoff also has another thing where you can pay them various amounts of money a month, there are multiple tiers, the highest is $35… and they basically set up what appears to credit agencies as a credit card, but you can’t actually use it as a credit vard.
But, it significantly increases that ‘total available credit’ number, and the various tiers also give you differing levels of access to challenging items on your credit record you think are fraudulent or wrong in some way, gives you access to something lile Aura or DeleteMe, where it periodically checks for and tries to delete your data from data brokers.
That also takes a while to complete, but the point is that you can do this setup too, and it boosts your total available credit, and of course also counts towards your count/percentage of on time payments.