How do I Raise my Credit Score?

Order a copy of your credit report from all three credit reporting bureaus. It is possible that there are mistakes on there or bad loans you are unaware of, etc.

Just from what you posted, it appears your score is not correct.

The only other possibilities I see are that you need to have more of a history of revolving loans or consumer loans. But you are using your credit cards. I've been in a similar situation and was still able to maintain a score close to 800.

Seems like there’s a mistake

My score is 822 and I don’t think my circumstances are that different

You sound like you need a beefier credit history. I had a bankruptcy 8 years ago, but have 750 credit score with the bankruptcy still showing. Maybe look into opening another credit card with great rewards and signing bonuses, extended warranties, etc, and rotate usage to not only get better perks, but to "season" your credit. Buy everything on the credit card, not just bills, and pay off monthly like you are doing now.

You could always find a friend or family member with seasoned, high-limit, no balance credit cards to add you as an authorized user. You don't even have to get the card, they can get it and shred it...all you have to be is an authorized user and the card and credit history will benefit you. If they can add you to 2-3 cards, even better. The credit boost will only be for as long as you're an authorized user, though. In that time, you can secure your own credit with better rates and build from there.

Also,

Sign up for credit karma and get your free annual credit reports from Experian, Transunion, and Equifax.

You know what my credit score is? Zero.

You know what I have a lot of? MONEY.

Not a Financial Expert wrote:

I only have one credit card which I usually only charge my monthly bills to and then pay it off at the end of the month. When I bought my last car about 8 years ago I took out a 60 month loan and paid it off in less than 2 years.

If you are paying your credit card off before the statement cycles you are not establishing a payment history, The card needs to cycle with some kind of balance, then you pay that balance right after it cycles and before the due date (I assume your card has a grace period for no interest as most do) and then you will establish a payment history which will help up your score. Paying off the car loan early was great from a debt perspective but did not do a lot for your score because once again the credit bureaus want to see a payment history. I am not advising running up debt, you should still use your cards responsibly and pay the card off each month but let a small amount cycle on the card or the payments don't count toward your credit score. A credit score is a representation of how you USE credit.

On the other hand if you are letting the card cycle with a large balance that is using most of your available credit even if you pay it off monthly it will appear to the credit bureaus that you are over extended as the percentage of credit line that you use also affects your score. If this is the case, only let a small amount cycle and your score will improve much quicker. I

By law, you can get your credit report from each of the credit bureau agencies once a year (or if you are denied credit or receive a higher score). You do not need to sign up for anything. https://www.annualcreditreport.com/index.action

Hrmmm wrote:

Also,

Sign up for credit karma and get your free annual credit reports from Experian, Transunion, and Equifax.

A FICO score is an I love debt score. You improve your credit score by regularly borrowing money and paying it back on time.

How do you prove you're good at anything? By doing it. Same thing with borrowing money.

Dave Ramsey is right - chasing a higher credit score is the wrong goal. The goal is to stop borrowing money, not to get better at it.

Not a Financial Expert,

If you don't have a mistake on your credit report, then your "Fair" Credit Score is due to you not having enough of a credit history.

A credit score isn't a measure of how great you are or even how likely you are to pay back a loan. It is an "I Love Debt Score".

A "good" (I say high) credit score is achieved by not only paying loans back on time, but paying lots of loans back, and the higher the amount (to an certain unverified level) the better.

FICO score is determined using - 35% payment history, 30% amount owed, 15% length of history, 10% new credit, 10% types of credit used.

FICO is tight-lipped about how all of those things are used to calculate a score, but remember that the score is used by banks and others who determine if they want to loan you money and at what rate. A bank makes more money off of you if you take out a loan and use the entire term of the loan to pay it back. You don't get extra credit score points for paying it off early and in fact it very likely hurts your score (makes it lower).

Paying off a 60-month car loan in 2 years isn't necessarily a good thing in the eyes of lenders. Your credit card (revolving credit) isn't likely enough, if you are a single person, to boost your score much.

The main reason to have a high credit score is to buy a house with as small an interest rate as possible. If your credit score is holding you back, find a bank or mortgage company that will do "manual underwriting". They look at your income, debt, loan payment history, etc., but they don't use FICO scores to determine what rate you are available for.

Churchill Mortgage is famous for manual underwriting, but a Google search brings up many more companies that will do this.

1. Utilization: keep below 10% of credit limit

2. Payment history 100%

3. Derogatory marks 0

4. Credit Age

5. Total Accounts (mortgage helps show you have money)

6. Hard Inquiries

It's not just important to get an AMEX Platinum card. Insurance and employers look at your score.

Thanks for the responses everyone. I always thought is was a boost for your credit score to pay loans off early, that's why I paid off my car so quickly. Also, I usually pay off my credit card before the statement ever comes out. Again, I thought this was a good thing. In case it matters my score was from Experian.

So I guess what I need to start doing are:

1) Wait until my credit card statements come out before paying them off.

2) Use credit cards regularly but not excessively (I've heard 30% of your limit is the max you should charge - is this true?)

3) Use the full 48 months to pay off the car I just bought rather than paying it off early.

4) Get a copy of my credit report to check for errors. (I had a lot of things charged to my debit card last year while I was in Europe. I did not purchase any of it but I think it totaled over $1000. I contacted the bank immediately and the situation was resolved. All charges cancelled and my card was cancelled and replaced with a new one. Could this have an impact on my score?)

5) Possibly get a second credit card.

I agree that it would be better to never borrow money and just buy everything with cash. I could easily have done this with the car I bought but I want to try to improve my score for when I purchase my first house in the future. A 656 score is going to kill me on a mortgage.

How quickly do score improve? If I make the above changes, how soon can I expect to see an improvement to at least a 700?

You don't need a mortgage if you pay in cash.

I honestly don't understand this 'I'll get another credit card and go in debt some more so that I can get a mortgage' argument.

You spend 20-40% more when you pay with a credit card than you do with cash. The shift to cashless payments does make things easier. You know what you do when paying for things is convenient? YOU SPEND MORE.

I have one credit card - I don't carry it around, it's simply one active account - in case I need to fly immediately for family emergencies etc (I live overseas). Other than that, it's never used. I pay cash for everything - house, car, vacations. I haven't had debt in 30 years. When I do buy things I do tend to buy nice things, but always in cash. I don't make a ton of money each year, I just tend to keep more of it than the people around me.