Paid off student loan, score dropped 40+ points

This post originally appeared November 3, 2016 on CreditCards.com as “How to restore your good credit score to great

By Barry Paperno

Dear Speaking of Credit,
Hi. I had a credit score of 789 back in July, but now it’s down to 746. I just ran my credit report from Experian, and the only thing that’s not very good is the length of my credit history. I did pay off my student loan debt a few months ago (this is one of the three accounts showing “closed”), which correlates to when my score started going down. The other two accounts are a MasterCard that I closed right away and another duplicate of my student loan for some reason. What can I do to get my credit score back up? Thanks in advance for your help. – Katherine

Dear Katherine,
If it makes you feel any better, despite the 43-point drop, a 749 score is actually quite good. For instance, a 740+ score will get you approved for most credit at good rates. Still, I get that 749 is not 789, and don’t blame you for being concerned.

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New card numbers make for not-so-autopay

This post originally appeared October 27, 2016 on CreditCards.com as “Autopayments, though convenient, can backfire

By Barry Paperno

Dear Speaking of Credit,
We set up autopay with a credit card for several of our bills. A growing problem is our credit card number gets automatically changed by the bank frequently, like three to four times a year, because of some breach or suspicious activity. I appreciate the diligence of the bank, though we sometimes don’t get the card number changed in time with some of the companies we have autopay with. We change the credit card number as soon as we are notified of the nonpayment. Will these late payments due to the credit card number issue affect our credit score? Is there a better and safer way to set up autopayments? Thank you. – Roderick

Dear Roderick,
Three to four times a year sounds like a lot of breaches and suspicious activity! Hopefully, those problems are now behind you, and you can continue to autopay as you have in the past. Should the frequent card number changes continue, however, you’ll want to know that:

  • Late payments resulting from card number confusion can affect your credit score.
  • Yes, there is a better way to make payments under such circumstances.

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When to be concerned over credit report & score differences

This post originally appeared October 20, 2016 on CreditCards.com as “Yes, worry about a 30-point discrepancy in your credit scores

By Barry Paperno

Dear Speaking of Credit,
Could you explain to me why my TransUnion score is 592, but the Equifax score is 562? That is a 30-point difference. – Russell

Dear Russell,
There are two main reasons why credit scores for the same consumer can vary by more than a few points:

  • Differences in the information on file at the three major credit bureaus – Equifax, Experian and TransUnion.
  • Differences in credit scoring formulas.

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Raise score by paying all but 1 or 2 cards before closing date

This post originally appeared October 13, 2016 on CreditCards.com as “Small balance shows you use credit, helping your score

By Barry Paperno

Dear Speaking of Credit,
Do I keep my credit card balance zero or keep some on there to increase my credit score? – Monica

Dear Monica,
Your question is a good one, as it touches on some lesser known and often contradictory calculations within the “amounts owed” credit scoring category that makes up 30 percent of your score.

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Don’t close cards. But what if you have no choice?

This post originally appeared October 6, 2016 on CreditCards.com as “Don’t close your credit card accounts to win a mortgage

By Barry Paperno

Dear Speaking of Credit,
I have excellent credit and the four credit cards keep raising my credit limits, which is hurting me when I go to apply for a home loan because they consider the amount that is available something that can be used. What can I do to close two of them and limit the amount of the other two without hurting my credit score? – Barbara

Dear Barbara,
My first reaction to your question is to recommend finding another mortgage company. Closing cards and lowering limits should not be a requirement for loan approval. Research has shown that reducing the amount of available credit, whether by closing cards or lowering limits, does not by itself reduce the risk of future missed mortgage payments. Unfortunately, some lenders seem to have missed that memo.

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Instantly increase your credit age by 15 years

This post originally appeared September 29, 2016 on CreditCards.com as “Being added as an authorized user can boost credit age, score

By Barry Paperno

Dear Speaking of Credit,
I currently have two credit cards open with an age of history of only 1.5 years. My parents have a credit card that’s 15 years old. If they add me as an authorized user, will the age of my credit card history go up to theirs for that card? – Jeanie

Dear Jeanie,
Significant aging isn’t usually something we aspire to, but your credit profile should.

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Freezing your kid’s credit might not be as easy as you think

This post originally appeared September 22, 2016 on CreditCards.com as “Credit bureau policies vary when freezing a child’s credit

By Barry Paperno

Dear Speaking of Credit,
Why can’t I put a credit freeze on my children under the age of 18? – John

Dear John,
A credit freeze, also known as a security freeze, lets you restrict anyone else’s unauthorized access to your credit reports and scores by essentially shutting the door to all credit history associated with your Social Security number. Then, when no credit report or score is available to a creditor evaluating a fraudulent credit application, the application is typically declined and fraud has been prevented.

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Didn’t authorize disputed charge put on card? Are you sure?

This post originally appeared September 15, 2016 on CreditCards.com as “Business charged you via card number on file? Dispute it

By Barry Paperno

Dear Speaking of Credit,
Can a company that has my card number from a prior transaction charge my Visa for a disputed service (16 months after the disputed service)? – Frank

Dear Frank,
Not without your permission they can’t. But are you sure you didn’t give the service provider your consent to charge the card, by way of the fine print in the purchase agreement for this disputed service or the prior transaction that was charged to your Visa card?

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After a lifetime of using credit, where did my score go?

This post originally appeared September 8, 2016 on CreditCards.com as “If credit score disappears, here’s how to get it back

By Barry Paperno

Dear Speaking of Credit,
How does a credit report disappear? I have used credit for most of my life. I am 75 years old and when I recently applied for a loan, I was told I had no credit score. I had one a few years ago. I needed it for something and it was available. What makes the report go away? – Patricia

Dear Patricia,
Let’s begin by clarifying that often-blurred line between credit reports and credit scores, since it sounds like you probably still have a credit report — just no credit score.

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When the thrill of being on your GF’s cards is gone

This post originally appeared September 1, 2016 on CreditCards.com as “Removing yourself as an authorized user

By Barry Paperno

Dear Speaking of Credit,
I used my girlfriend’s credit cards to build up my credit scores as an authorized user. I want to take myself off those accounts (which are in perfect shape, like 2 percent usage). Will this drop my score significantly? I only have one unsecured card in my name. – Tom

Dear Tom,
Sometimes it can seem that raising a credit score simply by being added to someone’s credit card as an authorized user might just be too good to be true. After all, what could be easier? You don’t have to have good credit of your own or even make any payments. Once you’ve been added, that card automatically appears on your credit report and is included in your credit score as if it were your own.

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