Let’s take the time to set the record straight first. Your credit score falls between 300 and 850 with an ideal score somewhere in the high 700s. That’s easy. More difficult to grasp are the steps you need to take to actually improve your credit score.

*Gurgle gurgle… SWOOSH!* Enter the Solvency Shark with an in-depth look at the credit score evaluation process and the lessons harvested therefrom. (If only I could program theme music into this section of the article.)

The Fair Isaac Corporation (FICO) has a system for determining your credit score that is the benchmark here in the US, and it’s based on financial information collected over the years. Let’s see how it’s done.

First, these FICO-mancers throw a giant black cauldron over a crackling log fire and then burst out into fits of cackling that can be heard from deep within the dark forest’s canopy. Just kidding – these guys aren’t into the dark arts! But, hey – Halloween is about a month away and the “witch’s brew” analogy works well, so the Solvency Shark will take the bait.

35% of the potion’s ingredients depend on your “payment history,” or how well you’ve paid your creditors over the years. Any late fees, finance charges, or bills that went to collections? That’s scary enough to make even the mole hairs on a witch’s face stand up in fright.

Another 30% of the brew depends on your “debt ratio,” or how much credit is presently available to you. Example: if you’ve charged $7,500 to your credit cards that have an upper limit of $10,000, then ¾ of your credit isn’t available. $2,500 charged – or ¼ of your credit unavailable – looks a lot better. Good witches and wizards always check to see how much room they have left in their credit cauldron.

Next, the FICO-mancers look at how long you’ve had a line of credit and throw that in for 15%. Another 10% goes towards what types of credit you have (e.g. credit cards or home loans) and a final 10% looks to the number of recent credit inquiries on your account. These are the pickled nose hairs of newt, Sasquatch fingernail clippings, and other bits and bobs that the FICO-mancers pop into the potion to season it up and round out its flavor.

You could easily dismiss these percentages as a bunch of nonsensical googly-moogly, but here’s how the Solvency Shark smells it (sharks are best known for their sense of smell – but don’t get me wrong, they have fantastic color vision as well): to improve your FICO credit score quickly, you need to target the areas on which you can make a real and immediate impact.

Let’s take a look at the last three factors that make up your credit score and evaluate our potential impact there. First, the only way to elongate the length of your credit card history is to hold good lines of credit as you age (nevertheless, you can shorten the length of your credit history in an instant by canceling your oldest credit card. Pro tip: don't do that). Next, if you only have credit cards, you shouldn’t go out and get a home loan just to generate some variety within your types of credit. Finally, credit inquiries are carried out by other people trying to determine your creditworthiness. You don’t have much control over that and should only worry if there are a sizeable amount of inquiries in a not-so-sizeable amount of time.

But what about the lion’s share of your credit report – your payment history and debt ratio – that form a whopping 65% of your score? These look like prime targets for immediate action.

“But Solvency Shark, my cards are all maxed out! I can’t afford to pay them back,” you complain. Maybe it’s because the Solvency Shark is underwater and the sound waves are being distorted, but all I hear is, “But super-handsome Solvency Shark, I have a really high debt ratio and a sloppy payment history! Whine whine whine you have a rugged jaw line whine whine you are the sleekest sea predator.”

Actually, that was a trick – sound travels more quickly underwater due to less interference, so I heard you loud and clear. We understand – you’re in a tough situation. That’s why the Solvency Shark and the entire Debtors Unite team are here to help you. MY ADVICE: don’t let your past actions determine your future ones. You now have the knowledge to affect 65% of your credit score in a positive way – I suggest you do so.

Sit down next to a flat surface with pen, paper, all your bills and your brain. Build a basic budget. Make sure it has you breaking even each month. If you can finagle a surplus, all the more power to you. Use that surplus (or the money you’ve set aside in your break-even budget for this purpose) to pay your creditors. Pay them more than the minimum amount – it’s the only way to defeat the slow growth of interest. And pay them on time. Each month. Forever.

This way, you’ll be killing two birds with one stone. By paying on time, you are improving your payment history. By paying more than the minimum amount, you are reducing the amount of debt you carry. This, in turn, is improving your debt ratio. It’s an elegant solution to the problem of a poor credit score!

Live well, live well within your means, and remember – that’s how the Solvency Shark smells it.


P.S. For further help, surf on over to David Pilley's take on improving your credit score.  Just remember - the Solvency Shark is lurking underwater, and he thinks your surfboard is actually a tasty seal.

If 240-374-5400 calls, let it go to voicemail. Then delete it without a second thought. MY STORY: I was contacted by this number about three weeks ago and the person on the other end of the line left a message best described as hurried, garbled, and puzzling:

 

“Hellothisis(muffled)pleasecallbackat2403745400andreferenceyouraccountnumber36489(trails off)againpleasecallback2403745400*click*.”

 

Well, that was strange. It may have been the Solvency Shark’s keen sense of smell (I can smell one drop of budget in a million drops of water), but this felt like a scammy collections agency.

 

I scanned my brain for any possible reason why a bill of mine would be in collections, but it seemed unlikely. Most collection calls don’t come from left field like this one did; there are usually late notices and warnings that precede them.

 

But doubt and fear can be powerful allies in the hands of a scam outfit. Perhaps you owe so many different creditors that you just can’t tell. Maybe you think this is just the latest in a long string of collection agencies to snap up your overdue account in hopes of profit. As for me, I caved in after convincing myself that the call was possibly linked to one of the utility companies in my new city; what with unpacking and finding new grocery stores and trying to make new friends, maybe I had forgotten to pay my very first bill.

 

So I called back and left my name and phone number on their answering machine. I felt uneasy, but I told myself that it was good to get to the bottom of things just in case there was a legitimate problem with one of my accounts.

 

Suddenly, my resolve steeled itself anew and a shining burst of undeniable logic sliced my fears in twain: “Well, the voicemail sounded like a scam… and it feels like a scam right now… hey! It probably IS a scam!” A feeling of annoyance washed over me. They may have driven the Solvency Shark to frenzy by throwing some bogus chum into the waters, but it would be my choice to swallow the putrid carcasses. I decided to do a bit of research.

 

I punched the phone number into Google and quickly found several forums featuring threads full of complaints about phone calls from this number. People said that these callers had left messages similar to the one I had found on my phone – vague, nonsensical, and more often than not with some overly complex “reference number” included.

 

Solvency Shark almost duped by bottom-feeding scammers! Solvency Shark angry!!

 

My phone rang. It was them. I cursed myself for taking the bait earlier, but I had no choice now but to take action.

 

Solvency Shark… SMASH!

 

I picked up the phone and said hello with all the built-in cynicism I could muster. Scammer said, “HellomynameisScammerjumblemumbledygoober.” I asked him to repeat the last thing he said. He didn’t understand so I repeated. He still didn’t understand so I repeated insistently. Finally, he understood and said dismissively, “Oh – this call will be recorded for quality assurance.”

 

Yeah, right. “Quality.”

 

I asked Scammer who was calling. He gave me the name of a collections and outsourcing agency that shall remain nameless (unless you decide to Google 240-374-5400). Scammer then asked me again if I was the Solvency Shark. I didn’t say – instead, I asked him to tell me what the call was about first.  He repeated his question. I repeated mine. He repeated his louder. I repeated mine louder and with a pinch of anger. Scammer repeats, I repeat. Again. Once more.

 

Then I just hung up the phone, disgusted. Solvency Shark hates scams! Moments later, 240-374-5400 was ringing. I didn’t answer. They didn’t leave a message. They haven’t called back since.

 

Although I would love to highlight all the negative information I found on this company after researching them more thoroughly after the call, the specifics of who was actually behind this unfortunate encounter become irrelevant when we come to the moral of this story: be vigilant over both your money and personal information.

 

Plenty of people are after both and you are only helping them when you psyche yourself out (like I did). If they don’t sound familiar and refuse to give you any of their information unless you give them yours, hang up the phone and move forward with your life.

 

Live well, live well within your means, and remember – the Solvency Shark smells budget in the water.