Answers To Challenging Credit Score Questions

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6-18 Credit Score

The following is a contribution from Joshua Rodriguez of CNA Finance. If you would like to contribute to Frugal Rules, please consult our guidelines and contact us.

Today, I’d like to discuss a topic that becomes increasingly important as you reach for financial stability – credit scores. As a personal finance journalist, I spend tons of time reading stories from several different personal finance sources. Through my reading and, emails that I receive from readers of my work, I’ve noticed a trend in crucial questions revolving around credit scores. More importantly, these questions tend to yield different responses depending on who you are talking to. Here are my three favorite and most challenging credit score questions and the best answers that I can give to them…


Question #1: How Do I Protect My Credit Score If I Think My Identity Has Been Stolen?


Identity theft is a very real concern, especially for those consumers who are working to build and maintain great credit scores. Knowing that if your identity is stolen, the thief can cause irreparable damage to your credit scores, you might want to know how to protect yourself if you are a victim.

The credit reporting agencies are no strangers to identity theft themselves. They’ve come up with detailed algorithms to help detect it. But, the best and fastest way to detect identity theft is to track it on your own. If you find anything before the credit reporting agencies do, you can request a freeze on your credit report. The rules for these reports and how to file them varies by state so, the best way to find out how to do it is to visit the websites for the credit reporting agencies and research the rules in your state. If you prefer, you can also call them and ask a few questions.


Question #2: How Will Closing A Credit Card Effect My Credit Score?


The answer to this question varies depending on who you ask. However, without specific details on your credit profile and the account you plan to close, no one can tell if how closing an account will affect your credit score or if it will even have an effect at all. This is because there are several variables that come into play when you make any financial decision. In this case, here are a couple of them:


  • Debt To Available Credit – One factor that is proven to make a difference is your debt to available credit ratio. If it is high, this means that you’ve used most of the available credit allotted to you and you are most likely a high risk. Therefore, if you are closing the credit card with the most available credit, you might want to think twice.
  • Amount Of Revolving Credit Lines – If you have too many credit card accounts, you become more of a risk to the lender as well. Therefore, if you are choosing 1 card of 6 to close, it might be a good thing for you depending on other variables.
  • Average Life Of Revolving Credit Lines – A consumer that keeps their accounts open and active in good standing for a long time is a good consumer to loan money to. Therefore, the average age of your credit cards comes into play here. If you are closing your youngest account, it could yield a positive effect.


The bottom line is, the credit reporting agencies have their own detailed algorithms to come up with your credit score. These proprietary algorithms are kept secret for good reason. However, through research and case studies, we are able to predict if one financial decision or another will be a good idea. That being said, generally, if you feel that the financial decision you are making is the best for your financial stability, by all means, make the decision! The credit score system is designed to reward those who make an active attempt to become financially free!


Question #3: How Long Will It Take To Improve My Credit Score?


If you’re asking this question, your credit score is in one of two places, either 0 or poor in most cases. If your credit score is absolute 0, meaning that you have absolutely no credit at all, improving your credit to a loan-worthy score can happen in as little as 12 months if you make great financial decisions. However, the time it takes to improve your credit score can be substantially longer for those who have experienced bankruptcy or recently settled incredibly past due debts. I got this question quite a bit in emails so, I recently wrote the article “How Long Does It Take To Improve Your Credit Score” to address the demand for the answer. For more details on how long it might take you, feel free to read that article.


Do You Have A Question That You’d Like To Ask?


If you are not sure about how a financial decision may affect your credit score or, anything else that has to do with credit scores, I’d love to help. Simply leave a comment below with your questions and I will respond with the answers for you. Please remember that I will be responding in the comments here so please check the box for comment updates after asking your question. I would also encourage you to get your free credit report, as you’re allowed to get them from all three credit reporting agencies once per 12 month. That is likely one of the best ways to stay on top of your credit.


The preceding was a contribution by Joshua Rodriguez, proud owner and founder of CNA Finance and avid personal finance journalist.


Editor’s note: Improving your credit score is not something I have talked about much , so I do appreciate Joshua’s insight on this. I find that this is an area which is confusing for some, so please do your due diligence before taking serious action.


Photo courtesy of: Casey Konstantin

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I'm the founder of Frugal Rules, a Dad, husband and veteran of the financial services industry. I'm passionate about helping people learn from my mistakes so that they can enjoy the freedom that comes from living frugally. I'm also a freelance writer, and regularly contribute to GoBankingRates, Investopedia, Lending Tree and more.


  • You’re right, the algorithms are kept secret for good reason. If the equations were public, everyone would know exactly how to “game” the equation. Anyway nice to see you guest posting and I will try to make it over to your site.

    • Thanks for your comment DC. Although the algorithms are kept secret, it’s pretty simple to figure out. Make smart financial decisions and good credit scores are soon to follow is a great rule of thumb!

  • Great post! I agree there is a lot of conflicting information about how to improve your credit score and how long it takes. I’ll go check out your other post!

  • Since I churn credit cards, I’m slightly concerned about my score. However, I don’t worry about it as long as it stays over 750. I monitor it to make sure and so far so good!

  • AverageJoe says:

    Good stuff, Joshua. According to ABC News, as many as 90% of all credit reports have a mistake, so moving your credit score up could be as easy as requesting and correcting some incorrect facts.

    • Thanks Average Joe! I was at first, very surprised at how many of my clients reports had mistakes. Fortunately for me, I haven’t had one yet but, I always keep a close eye! Thanks again!

  • Matt Becker says:

    “That being said, generally, if you feel that the financial decision you are making is the best for your financial stability, by all means, make the decision!”

    That is the best sentence in this whole piece. So many people spend time trying figure out the best “tips” for improving your credit score, when the reality is that you should simply practice good financial behavior and your score will take care of itself.

  • I always forget this, but whenever I open up a credit card, the agency has to phone me and verify a whole bunch of things because my wallet was stolen before so I put a flag on my social insurance number. They are diligent!

  • I don’t deal with my credit report much. I only check it to make sure there are no mistakes and keep up with the same things that I have done for years. My credit score has always been great and I plan on keeping it that way.

  • So many things are dependent on credit scores, so while I don’t always think it’s fair, we all should be mindful of where we stand. If it means getting a better price on insurance or a better rate on a mortgage, I’m going to keep mine as high as possible.

    • Hey Kim,

      Unfortunately, there are few things that I would consider to be fair in the consumerism driven society we live in today. None the less, it’s up to us to roll with the punches, thanks for your comment!

  • Good post Joshua. You’ve really got to stay on top of the credit report to catch any errors and quickly take care of them. As far as improving score, just keeping credit lines open and paying bills on time every month would be a great start for 95% of people.

  • Jake @ Common Cents Wealth says:

    This is a great overview. Credit scores can be pretty hard to understand. I’ve been thinking about closing one or two of my credit cards, but I don’t want to have it a negative effect on my score because we may be buying a house soon. I wish that there was a way to check how much of a affect a certain action had on your credit score, but I understand why they keep it secret.

    • Jake, they do keep it very secret but, here is the best tip I can give you…

      “That being said, generally, if you feel that the financial decision you are making is the best for your financial stability, by all means, make the decision!”

      Unfortunately, I don’t know of any tools like that but, I hope my tip helps and appreciate your comment!

  • Thanks for this article! I didn’t realize the age of the account mattered (older more established accounts count for more) – that’s really important information.
    I know for us – I was thinking of reducing our credit card limit to a lower amount because having a $10,000 limit freaks me out. However, with that debt to credit ratio – maybe it would be better for us to wait.

    • Hey Lindsey, thanks for your comment! It’s also important to remember that these tips are just general and, there is no such thing as a one size fits all answer to any credit score question. I was once told by someone who worked for a reporting agency that there were 7 different algorithms they used to determine the effects of closing a credit card depending on the unique financial profile, 1 will be used. Therefore, don’t be afraid to make smart financial decisions. If you are not comfortable with so much available credit, ask for a reduction…it’s probably best. If you want to close an account because it’s nothing more than dead weight, don’t worry. Even if it does cause a minor effect in the beginning, later on, if it was a smart financial decision, it will only do good for you!

  • Great post! I am sure this will help many. Credit scores can be so complex and it is important to stay on top of them and know ur standing. I have heard of many mistakes happening.

  • Catherine says:

    Great post! There is soooo much conflicting information out there but it’s so important to weed out the proper info.

  • I think the credit bureaus should make how they calculate our credit scores more open knowledge. For a bit of information that is so important to all of us, I’m not a fan of how its secretly controlled by 3 companies.

    • Hey The First Million is the Hardest, thanks for your comment! I can’t say I’m a big fan of the secrecy but, I can’t say it bothers me either. For the system to be accurate much information on how scores are calculated need to be secret. If we all knew then, we would game the system. I mean, think of how complex and secretive Google is and people game them all the time. Imagine how devastating it would be to the lending industry if it was easy to cheat your way to a good credit score.

  • Credit scores are so important to our daily lives, and you can check them, yet so many parts of it are unknown. The worst part is there are wrong rumors out there which leads people to make the wrong credit decisions which makes it an inaccurate representation of your credit. Banks and others need to think of other more accurate ways to measure people’s credit, not just credit scores.

    • Hey Alice,

      The unknown really shouldn’t be too scary. It all boils down to making the best financial decisions on common sense. If the decision is going to help your financial stability, it will help your credit. The scary part is the rumors. If the decision you are making doesn’t have a common sense answer, don’t count on just one article online. Look around for different resources that are incredibly identical. Also, make sure those resources are on highly trusted blogs…like this one!

  • ID theft usually hits when it is too late, if the company has not picked up the errors on their own. We’ve had a couple narrow misses. What are your thoughts on the ID theft protection services out there?

    • Hey Mike, there’s a lot of options out there and they all pretty much do the same thing. However, what I like to do is go to the credit reporting agencies websites and put a freeze on my report. That way, before it can be run for anything, a password needs to be given. You don’t have the password, you’re not getting in! Just make sure it’s a good one that only you would know.

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