Married or single, to your credit score you’ll always be single

This post originally appeared October 5, 2017 on CreditCards.com as “‘Q&A: How credit utilization is calculated in a married couple’s scores

By Barry Paperno

Dear Speaking of Credit,
How is the credit utilization part of a credit score calculated when a married couple has some credit cards in both names and some in individual names? – Dorothy

Dear Dorothy,
Without realizing it, you’ve provided me with the opportunity to explain not only how a married couple’s credit information makes its way to each spouse’s credit reports and impacts their credit scores, but also to show how easy it can be to raise one or both credit scores when credit card accounts aren’t currently being reported in both spouses’ names.

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Utilization: 0% to 92% leads to huge one-month score drop

This post originally appeared September 28, 2017 on CreditCards.com as “‘Q&A: Sudden spike in credit utilization can cause major score drop

By Barry Paperno

Dear Speaking of Credit,
I have always had a 0 percent credit utilization on my credit card. This month it was at 92 percent because the payment cleared the day after it was reported. My credit score dropped about 100 points.

My question is, when the credit card company reports again and my card is back to 0 percent utilization, will my credit score rebound by about 100 points, or will it slowly creep back up? – Amanda

Dear Amanda,
Hats off to you for being willing and able to pay your card in full (almost) every month. There is nothing better for your credit score and your bank balance.

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Reporting error says ‘you’ closed card? No harm no foul.

This post originally appeared September 21, 2017 on CreditCards.com as “‘Q&A: Should I contest credit card wrongly reported as closed by me?

By Barry Paperno

Dear Speaking of Credit,
I had a long history with a personal line of credit with Bank of America in the amount of $30,000. In May 2016, I was advised that BofA was no longer offering the product and therefore the credit line was “closed.”

I contacted BofA to see if there was a replacement product, other than a credit card. There wasn’t. At the time it was closed, it had a balance and there remains a balance. It has been reported as closed by me.

Should I contest this to find a way to report it as product no longer offered or some other indication, or is it best to leave it as it is? I appreciate any thoughts you may have. Thank you. – Angela

Dear Angela,
From your question, you seem to be well aware that different credit scoring impacts can come from even the slightest of reporting variations.

For example, a card account with a payment history accurately reported as “current” can be better for your score than that same account reported as “current – was 30 days delinquent.”

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Note to self: when about to try for a refi, pay bills on time

This post originally appeared September 14, 2017 on CreditCards.com as “‘Q&A: Applying for house refinance soon? Don’t miss card payments

By Barry Paperno

Dear Speaking of Credit,
I have two credit cards – Kohl’s and JC Penney. I missed making the payment for two months in a row. Just never saw the bill and spaced out. I know, bad.

They sent the late payment notifications to the credit bureaus, which brought my credit score down. I paid the accounts off. How long will it take before my credit score will go back up?

I am also trying to refinance my house. Do you think this will cause them to deny the loan? I was working on getting it up. I had it up to 670; now it’s like 659. – Maryann

Dear Maryann,
At least you’re not offering any tired excuses when admitting to having simply “spaced out” on those two card payments for a couple of months. Who hasn’t done something similar and let a payment or two slip through the cracks at one time or another? Now it’s time to clean up the mess and get back on track toward a higher credit score.

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Plenty to consider when combining card balances

This post originally appeared September 7, 2017 on CreditCards.com as “‘Q&A: How to combine existing card balances without hurting score

By Barry Paperno

Dear Speaking of Credit,
I have three credit cards through one company. If I combine them all into one, the one I’ve had the longest and that has the lowest interest rate, will that hurt my credit? – Harmony

Dear Harmony,
You certainly have the right idea, transferring your higher-interest balances onto the lower-interest card. Not only will you apply more of your monthly payments to principal and less on interest, but you will have to make one, not three, of them each month. Good move!

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Good news for consumers with medical & other collections

This post originally appeared August 31, 2017 on CreditCards.com as “‘Q&A: Library fines, parking tickets no longer trash your credit

By Barry Paperno

Dear Speaking of Credit,
If a person in a foreign country receives a fine on the Metro for not buying a ticket, will his or her credit score be affected in his or her home country? – Heather

Dear Heather,
Had you asked this question prior to June 15, 2016, you might have received an answer that, yes, even a foreign transit fine could wind up on your U.S. credit reports and hurt your credit scores. You’ll soon see why this date matters.

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Card activity plays only a minimal role in credit scoring

This post originally appeared August 10, 2017 on CreditCards.com as “‘Q&A: How does credit card activity affect my score?

By Barry Paperno

Dear Speaking of Credit,
I recently opened a credit card for the first time. I have a $300 credit limit and haven’t been spending more than $25 a month on it.

So, let’s say I make a purchase of $10 on July 3 and pay it off on July 6, and my next statement date is July 28. Would it be beneficial to my credit score to make another purchase of $10 on, say, July 10, and pay it off before my next statement date? – Mitchell

Dear Mitchell,
The answer to your question of whether your credit score will reward you for that additional charge and payment during the same billing cycle as the prior activity is clearly a big no. But making an additional $10 charge and paying it off before the statement date won’t hurt your score either. It’s just an unnecessary couple of steps for score-raising purposes.

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Best score-raising plans can also be easiest to implement

This post originally appeared August 3, 2017 on CreditCards.com as “‘Q&A: Best strategy to raise my credit score beyond 750?

By Barry Paperno

Dear Speaking of Credit,
I currently have two credit cards ($5,000 credit limit on each). I’m looking to boost my credit score above the 750 mark, and I’m just a few points shy. I maintain less than a $100 balance combined across the two cards, and I know a low available credit/credit used ratio can help boost your credit score.

Should I apply for a third credit card or ask for a credit limit increase from one of my existing cards? If I ask for a credit increase, how much should I ask for? I am gainfully employed and make over $50,000 a year. I have $18,000 of student loans, but I’ve paid $5,000 off in the past four months. – Bronn

Dear Bronn,
You’ve provided us with a great reminder of how the best strategies for raising credit scores are often the easiest to implement. Particularly in a situation like yours, in which you’re already doing right by your score and have a good one to show for it.

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Adding a second card could help build your credit score

This post originally appeared July 27, 2017 on CreditCards.com as “‘Q&A: Why a recent graduate should get a second credit card

By Barry Paperno

Dear Speaking of Credit,
I am 22 years old and have had a Chase Freedom credit card for about three years now. I always pay my balance on time and have never been late. I try to use the card as often as possible.

I recently graduated from college and am looking for ways to help increase my credit and set me off in the right direction. This past month I accumulated two hard inquiries on my credit for a car lease and for an apartment. I am going to be attending graduate school for the next two years.

I was thinking of applying for a second credit card, but I am not really sure what to do. I guess my questions would be whether I should get a second card, and if so, which card should I look into? – Vin

Dear Vin,
Congratulations on graduating college. Achieving both a diploma and a three-year credit track record by age 22 says you’re already headed in the right direction.

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Carry a balance, skip a payment to build credit? Never.

This post originally appeared July 20, 2017 on CreditCards.com as “‘Q&A: Missing a card payment to build credit is terrible advice

By Barry Paperno

Dear Speaking of Credit,
I am 18 years old and have been approved for a card with a $500 limit. I spoke to an associate with my bank who told me that it would be a good idea to not pay the balance on my credit card for the first month. He said that because I have no credit history, and this is my first billing cycle ever, it would be a good idea to let the balance carry over and then pay it off at the beginning of the next billing cycle. He told me to not even make a minimum payment.

From that point on, he said that I should pay my balance off in full each month, which is what I was planning on doing from the beginning. His reasoning for this was to show the credit bureaus that I at one point had a balance, and then I paid it off, as opposed to always having a zero balance because I’ll pay off the card every month.

I was under the impression that letting a balance carry over would always be a bad idea. Is there any truth to what the associate told me? I only care about what will build the most credit. The interest doesn’t matter to me because I have a 0 percent APR for my first 12 billing cycles. I really appreciate the help. – Zeeshan

Dear Zeeshan,
If that isn’t the worst piece of credit advice I’ve heard in a long time, I don’t know what is. Good for you to be questioning it.

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