We have several great questions in the queue, so let’s get started by introducing our hosts, Jessica Anderson and Joan Goldwasser.
Thanks! Excited to be here today.
If you have any credit card questions, just ask and I'll be happy to answer them
I'd say the most important thing to know about your score is that it is CONSTANTLY changing
It's based on what's in your credit file, so as you accumulate and pay off debt (and how you do that), the number changes
This number is a statistical analysis of how likely you are to repay a debt and it's used by everyone
However the source of the number will vary depending by lender--the majority use FICO scores, but there are other scoring models out there
If you are young and have no credit cards, no mortgage and no auto loan, you will have a thin file and your credit score probably won't be too high
Since it's constantly changing, how often would you recommend someone checks their credit report?
Unless you're in the market for a loan--auto or home--probably once a year is fine
You are entitled to one free credit report every 12 months from each of the 3 major credit bureaus. Take advantage of that
Yup, and you don't have to get them all at the same time
Good point, Joan. My sister recently ran into that problem after coming back from abroad. She's been applying for several credit cards, but hasn't had any luck.
If you want to check every four months, you can stagger your requests
Great tips, Jessica and Joan.
Alright, if you're ready, let's get started with our first question from Steph.
If you have trouble getting a general purpose credit card, try applying to a retailer. They are usually easier to qualify for
Hi Steph, I think you're taking all the right steps.
Use your credit card and be sure to pay the bill on time every month. You can request an increase in your credit limit but I'd wait a year to do that so you have shown you're a good risk
Unfortunately a lot of getting your score up (and it sounds like you have a good one) and building credit in general is just about time.
As your credit history increases over time, your score should rise
Great advice. Hope that helps, Steph!
Our next question comes from Ben
Absolutely, but if that 744 is a FICO score (all the different models have different ranges), it's good enough to get the best rates on almost anything
No, that's not true. "Soft pulls" done by you shouldn't ding your score.
"Hard pulls"--like when you apply for credit--will count against you if you have a lot within a short amount of time.
What do you mean by "soft pulls?"
no, it will not. If you apply for several credit cards at the same time, your score will drop slightly but it will recover quickly. As Jessica says, getting your credit report won't hurt it
You're one step ahead. Thanks, Jessica.
The exception being shopping around for a car loan or mortgage--those pulls group together if you're doing it all around the same time.
Usually you have about a 30-day period to shop for a mortgage and it counts as one inquiry
Good to know, thanks Jessica and Joan.
Actually, strike that...it might be closer to 2 weeks for car loans.
So, if someone is applying for a credit card, they shouldn't apply for too many all at once?
No, that can hurt your credit score. However, it won't damage it dramatically and it will recover
For example, don't go to the mall and sign up for a card at every store you visit :)
As tempting as that might be, Jessica :)
How can you improve your credit score? What are the best ways to build credit if you're just starting out? What are the different types of scores and how are they calculated? Kiplinger credit experts Joan Goldwasser and Jessica Anderson took your questions on Thursday, August 9.
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