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My credit score is sitting around the 720 range and I'm interested in getting it back over 750. I utilized 2 different "0% for 18 month" credit cards as short term loans in order to pay for a wedding and honeymoon.

Those debts are now completely paid and the only thing that I have recurring is a single car and a mortgage. Generally speaking, I don't carry credit card balances. But, the addition of those two cards seems to have helped some:

  • My debt/available credit ratio is now phenomenal
  • I now have more accounts, though am still under 6 in total across my entire history

But it seems to have hurt as well. Before these two cards, I've carried a student cc for a bit over a decade. So, my average age of accounts has dropped from 10 years to ~3 years.

I'm about to make a decent purchase ~2,000 US and have the money in savings to pay the entirety of the balance now. But, I'm wondering if it would be worthwhile for my overall credit to take out this amount in a small, personal loan instead? I don't like being under debt and would likely end up paying off the loan in 3-6 months instead of whatever the actual term is.

Is this a worthwhile thing to do in order to increase my overall credit rating?


Additional info from comments:

Do you regularly make purchases on a credit card and pay the bill in full each month?

Yes and no. When using the cards, yes. Though I play around with going cash only a-la Ramsey style to change things up. There's generally at least one bill that gets paid via CC every month, however.

Where are you reading your credit score from?

I'm looking at the score provided by creditkarma. Yes, I know this isn't the end-all-be-all score. I also reach out to the Big 3 for individual reports every 4 months (1 at a time, so 1 pull for each agency per year).

Why do you want to get your credit score back to 750?

Because I'm a numbers chaser and treat it like a game. That's the honest-to-God answer. I hit 790 at one point - but haven't said hi to that score in a good long while. I realize this might not be a great way to look at it, so I appreciate your insights regardless of this not-so-compelling reason.

  • Do you regularly make purchases on a credit card and pay the bill in full each month? – Ben Miller Feb 2 '18 at 18:56
  • Where are you reading your credit score from? – Ben Miller Feb 2 '18 at 18:57
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    Why do you want to get your credit score back to 750? – D Stanley Feb 2 '18 at 19:05
  • @BenMiller, see above – user67222 Feb 2 '18 at 19:38
  • @DStanley, see above – user67222 Feb 2 '18 at 19:38
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Why do you want to get your credit score back to 750? ... Because I'm a numbers chaser and treat it like a game.

You are playing a game that you don't know the rules to, don't know how the score is kept, and have multiple referees calling the game differently. (This is not a personal attack - NO ONE knows all of these things to an absolute certainly)

If you want to take out a loan for a $2,000 purchase and see if it raises your credit score, that's your right. Just consider 1) how much that is costing you in interest and fees, 2) the risk involved if for some reason you can't make your debt payments, and 3) how it impacts any other life goals - do you want to retire early and life life without having to scramble to pay bills? Do you want to earn and save enough so that you can do whatever you want without stressing over next month's bills?

Are you going to go bankrupt over a $2k loan? Most likely not. But I would not call it a "worthwile" thing to borrow money just to raise your credit score. You can also raise it by continuing to pay your bills on time and letting your accounts age a bit.

  • You are playing a game that you don't know the rules to, don't know how the score is kept, and have multiple referees calling the game differently - For some reason, this strikes me as a terribly compelling statement. I'll have to find use for it in other situations. In response: fair enough. There is no impact to future goals. I'm getting my wife a custom made piece of jewelry. The cash has already been set aside and ear-marked, though, you are probably right that in the end, it won't be worth it. I appreciate your input. Thanks! – user67222 Feb 2 '18 at 19:56
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Most credit score displays give you a list of which specific pieces are significant for your current score. Basically, it is calculated as “Max minus adjustments for several dimensions”. You should look at that.
From what you wrote, my guess is
1. Average age. Anything under 120 months average age reduces your score. As you have a max of 36 months, this is probably the single main reason you don’t have 800+.
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5. # of inquiries in the last 12 months, or total credit volume.

For both, waiting is the best you can do. The score will creep up 3-5 per month (with some jiggling), until it reaches 800 in some years. Anything else will not help much, if not hurt.

This is not even considering the money you lose on an unnecessary loan.

[Note: I love to play the same game, for about a dozen years now. Finally made 830+].

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You've already seen that your score took a hit when you paid off your student loan. The same thing will happen with a new term loan; your score may go up initially during the loan due to a better credit mix, but once you pay it off it probably won't help you ever again. So unless you are planning to finance a new car or house during the time period that you would have the term loan AND bumping your score would enable you to save money with a lower rate, it's pointless.

As a side note, I think everyone on this site can empathize with the concept of chasing a virtual number just because it's fun. :D

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