Posting this for a friend whom i’m trying to addict to the dope. 
Am currently a full time 21 year old student without a job that wants to improve his credit rating over the next 2 years. Right now I have 2 credit card accounts both with approx $3000 limits and a checking account. The checking and 1 CC account has been held in good standing (never had a late payment or overdraft) for 3 1/2 years, the other CC account is really new, a month old. Also have a number of student loans in my name, but repayment not due until graduation (2 years from now).
I’m wondering if opening a saving’s account with my bank will improve my credit rating? Interest rates at the moment are pretty pathetic, and it would tie up a few hundred dollars to avoid the minimum monthly fees. But, if it will significantly improve my credit score/rates I am offered when applying for things (car loan, lower CC rates, higher CC limits, etc), I would consider opening one.
And on the side, what are other ways I can improve my credit score (besides getting a job), or other types of accounts I can look to opening?
I have no expertise in this field, but as I just got a mortgage and had to jump through all kinds of financial hoops, I asked a lot of similar questions to local bacnkers.
First the bad news… none of them could tell me for sure (or were even willing to approximate) how much my score would change as the result of any particular act or acts. For instance, there was an incorrect entry on my credit report that I had an unpaid medical bill of several thousand dollars. A local bank told me I would have to satisfy that debt before thay would loan to me, and even then I would ultimately pay a higher interest rate on the mortgage. I went to thr medical office, and discussed the issue with them, and obtained a letter from them saying the item was placed on my credit report erroneously and that they had notified the credit reporting agency to that effect. It made no difference to the bank, they told me everything would have to wait until the correction posted to my report and my score was recakcukated, which might be 60 days. I also tried very hard to reach a human being at Equifax to discuss things, but I never could. I got very similar answers from several other lending agencies – no one could tell me how much taking off the bad thing would change my credit score.
While they wouldn’t quantify it, there was pretty general agreement that the best thing you can do to improve your credit is have a godd history of repaying loans – so take out a loan and start repaying it and don’t miss any payments.
I’ve only looked at my own and one family member’s credit report, and I have not seen any information on savings accounts on either. AFAIK, they don’t care if you have money saved, only that you repay debts on schedule. But perhaps someone more knowledgeable than me can come along with better information.
I am curious about why you think you may need a higher credit score, but of course that’s your business. The only reason you need a credit score is to qualify for a loan, so I would go out and apply for one if I were you, just to see if you could get it. Beware, there are places that will charge you an application fee, but you should be able to find some that won’t. And most loan officers are willing to pull a credit report and tell you whether you’ll qualify without actually applying. Be wanred, the very fact of several places pulling credit reports on you in a brief time frame can change your credit score, I learned to my great surprise.
Loan officers can tell you that if you have a score better than X, they will give you interest rate Y, or no loan at all. What they WON’T tell you is by what amount X will increase or decrease based on changes in your financial status.
That “besides getting a job” caveat is the most difficult thing to overcome. Your credit rating is based in large part on your ability to pay any debts that might be incurred. Unless you are Bill Gates’ heir, the credit rating agencies (and anyone considering giving you a loan) will want to see some income on your balance sheet. So without a job, you’re not really going to have much luck establishing a credit rating. And being self-employed isn’t much better than no job at all - the banks and credit agencies are looking for reliable, consistent sources of income (a salary, in other words) so that they can calculate your ability to pay off something like a car loan over several years.
The credit card history will have some influence, if it continues to show that you are rigorous about paying off the balance on time. The student loans, I’m afraid, won’t count for much - they are “guaranteed” loans and the rating agencies treat them differently than consumer loans.
There’s an old joke about getting a loan: first you prove that you don’t need the money, then the bank will give you the loan. The savings / chequing accounts won’t mean much unless you have balances into six figures and can generate income from the interest.
Judgemental scoring systems that some lenders use as a supplement (used to be instead of) to credit scores may give you a tiny bonus for holding a savings account. Your FICO score neither knows nor cares whether or not you have a savings account.
I suggest that you open a savings account if you need one, but don’t bother trying to dope your credit score with that method-- it won’t do much.
My advice: Study hard. Get a good job. Work for 2 years before you buy anything big. Save up cash so you can put down a hefty downpayment on your first post-college car or home.
A nice down-payment, no derogatory credit notes and professional job will get you an OK rate on any secured loan.
And I’ll give you a hint: if it’s not going to be a secured loan, it’s probably for something you don’t need.
If you’re really trying to dope your credit, which I don’t think you need to, try my co-worker’s trick… she put her son on a credit card almost as old as her son as an authorized user. An 18-year-old kid with a 12-year-old line of credit. His FICO score was 720 the day after that posted. Of course, that would take a mom with good credit line to put you on and a whole lot of trust.
Good luck.
The best resource I’ve found for credit score information is the following: http://consumers.creditnet.com/straighttalk/board/