How you approach this depends on who is providing/creating your score:

• FICO^® Scores: you need at least one account that’s six months old or older and credit activity during the past six months.


• VantageScore: score may be calculated as soon as an account appears on your report. When you don’t meet the criteria, the scoring model can’t score your credit report—in other words, you’re “credit invisible.” And being “credit invisible” means creditors can’t check your credit scores, making it harder to open new credit accounts.

It can take as long as two months for debt payment information to be reflected on your credit score. This has to do with both the timing of credit card and loan billing cycles and the monthly reporting process followed by lenders.

1. You eliminated your only installment loan or revolving debt: Creditors like to see that you’re able to manage various types of debt. For example, if you pay off an auto loan and are left with only credit cards, your credit mix suffers. This is not a good way to boost your credit score.

2. You increased your overall credit utilization: when you pay off a revolving line of credit in its entirety and close the account, it decreases the total amount of available credit, potentially increasing your remaining utilization rate. If you’re looking for a credit booster, avoid this. You can certainly pay off a revolving line of credit, but you are better off keeping it open.

3. You lowered the average age of your accounts: The longer your accounts have been open and in good standing, the better.

What is credit card utilization? It just means how much of your credit limit you use at any given time.

What’s the best way to keep it under control? Just pay your credit card balances in full each month. Of course, you may not always have the means to do that. When that happens, try keeping your total outstanding balance at 30 percent or less of your total credit limit. Then you can work on reducing it to 10 percent or less, which is considered ideal for an optimal credit score.

Let’s say you have two credit cards. Card A has a $6,000 credit limit and a $2,500 balance. Card B has a $10,000 limit and you have a $1,000 balance on it.

This is your utilization ratio per card:

• Card A = 42% (2,500/6,000 = .416, or 42%), which is too high.


• Card B = 10% (1,000/10,000 = .100, or 10%), which is awesome.


• This is your overall credit utilization ratio: 22% (3,500/16,000 = 0.218), which is very good.

It may seem counterintuitive, but if you have old credit accounts you’re not using, keep them open. Here’s why: closing credit cards while you have a balance on other cards lowers your available credit and increases your credit utilization ratio. That could knock a few points off your score.

Delinquent accounts, charge-offs, or collection accounts cannot be ignored. Start with a plan to catch up on past due amounts, then arrange to make timely future payments. While this won’t erase late payments, it can improve your payment history in the future. For charge-offs or collection accounts, either pay them in full or try settling with the creditor.

But if you’re thinking about how to boost your credit score, paying off collections should be one of the things you focus on.

Remember, credit score changes shown on ScoreMaster^® typically apply to all credit scores the same, including the FICO^® and VantageScore versions. That’s because all credit scores are derived from Transunion^®, Experian^™ and Equifax^® where your payments and spending are reported.