Nearly $50,000 in Debt
Your “I only have $2,000 of debt why is my credit score low” is a prime example of the Ignoratio elenchi fallacy. $2000 doesn’t sound like a lot being as most Americans have several thousand more dollars in debt than you, but we’re not talking about all Americans here, we’re talking about you. Credit reporting agencies don’t compare your total debt to everyone else’s, rather they look at your credit to debt ratio. So the major contributing factor here is how much available credit do you have? You were right in your assumption about paying off your debt being paramount, and I would go so far as to say that it’s your credit:debt ratio that is hurting you most. You mentioned that you have $48,000 in Student loans; I have $35,000 in loans, but I have over $50,000 in available credit. Maybe you can see why my score has jumped so much. And if you’re still not sure on this one take a look at some info from my recent credit alert:

MyFico kicked me in the butt for decreasing my credit:debt ratio!

Can you believe this? A $59 debt increase slapped my credit score down by 5 points!

So just in summary, you’ve started to make the right moves and your credit score is a reflection of that. However, if you want to get that A for excellent grade you need to get those extra 10% and 15% that put you over the top. Keep paying your bills on time; that’s only going to make sure you keep your credit report up since bill paying accounts for 35% of your credit score! Perhaps too you may be having too high expectations right now that you’re in school with your student loans. With nearly $50,000 in debt and probably much less in available credit you’re probably not going to get much higher unless you’re extending your current credit lines or getting bigger credit cards — which of course is going to be hard to do with your account flagged as an identity theft victim. Ouch!

Still there are some things you can do.

First of all if you’re really concerned about your score you can try out MyFico’s Free 30-day Credit Watch and if you like it sign up for a full year!

(I’ve purchased a full year of and have been monitoring my score extensively.)

This is actually the First of 10 tricks that I’ve got up my sleeve for boosting credit scores which you can find on my article: 10-ways to Increase Your Credit Score (for you in Particular Ms Sinful Sixes, I would recommend looking into Tip #10, Account Shadowing.)

I hope this was of some help to you! Thanks again for sharing your question with us!

–Your Captain of Credit scores,
Juan Millon

** Shared on the Carnival of Credit Report Stories #6 @ Poorerthanyou.com **