1 point needed to reach minimum FICO for FHA

[Anonymous]

Although I saw a thread on this already I figured it'd be best to post my question separate of that. 

My mid score is 619, 8 months ago it was 537.

Today the message below appears:

PROPORTION OF BALANCES TO CREDIT LIMITS TOO HIGH ON REVOLVING ACCOUNTS

My question is that I'd like to try and buy within 6 months, if I pay down the credit cards (both have $1500 limits and both have balances of 80% + ) by end of July is it possible to raise my FICO one point within 90 days? I understand every situation is different and I know I need to give it 30 days at least after I pay the balances off to ensure the rating shows.

I did have an issue with my student loans but I paid the arrearages so there was nothing in the "past due" column and then let my auto loan rate for 8 more months as opposed to 10 months. That is all that is on my credit to date in terms of open accounts. I have another auto loan, paid in full as agreed, and a revolving store charge card from 2000 that was closed in 2002 (paid as agreed). Everything else is incredibly old. 

TIA

[bassethoundmom]

Yes, paying your cards down will give you points.  The amount seems to vary depending on what else is in your file but typically people are seeing about 30-50 points for taking utilization down from 80% to below 9%.  I was at the lower end when I recently paid mine down but it will definately be enough to get you above 620.

[llecs]

Ditto. Paying revolving CCs is the fastest way to increase your score. As a rule of thumb (and certainly not official), for every 10% of util you pay down, you gain 10 points with most of the points appearing as you approach 10% or less. So, if you have multiple CCs (3 or more w/ a store card at least, IME anyway), then paying from 80% to under 10% could net 70-80 points. Paying from 80% to 70% won't get you 10 points, or even from 80% to 60%, but on the whole, you would see larget gains as the balances creep lower. Now mix of credit plays into this. If you only have 2 CCs, you probably won't see gains like that, but bassethoundmom is pretty accurate. I'd guess 40-50. For max points, you'd want all but one CC to report $0 with the remaining CC reporting less than 9% as mentioned (but not $0).

[Anonymous]

Thank you so much. Such a frustrating situation as you may know but since 10.2009 I've raised my score from 537 to 619 so I should at least be pleased about that. 

I've found that there is one collection on the report for $77 from 2.2004. I have read it could have adverse impact on me if I were to pay that so for now I'm going to leave that be. I have a lien that is released, this is showing only on Equifax but Equifax is the report that gave me a mid-score of 619 so I think that it'd be good to dispute that again. I've disputed it before and evidently the certified copy of the lien released in 2004 is not enough for them. 

What got me into this was that I have student loans that I owe to three companies but there are about 9 trade lines from them. In May 2009 I asked for a deferment and I misunderstood when they granted a forbearance. I continued to skip payments and no one called because I had just moved. I neglected to read their e-mails and moved on my merry way. Bad choice I made there but I paid the arrearages in November 2009 and hoped for the best. Since then I've been working hard to pay all bills on time and not miss a beat. However, I recently had to travel and used those two cards. 

I am hoping that I can pay them down before end of July so that they rate in August. Then end of August I will have my report (simple report which doesn't affect score) ran to double check. My stress is compounded by me needing to either sign another lease today or go month to month. If I sign a 3 month my rent goes up $127. If I don't sign it goes up $178. If I sign a 6-month it stays the same but I'd like to be in a buying position before 10/1. The weather will start to turn and I don't want to find myself moving much later than that and around the holidays. 

Thanks for reading my ramble if you did.  

[Anonymous]

okay, not to jack anyone's thread, but y'all say to pay down revolving debt, it will raise score, correct? well i had kohl's, dell, and best buy. just paid all of them off about a month ago. shouldn't score go up??

[llecs]

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@Anonymous wrote:

okay, not to jack anyone's thread, but y'all say to pay down revolving debt, it will raise score, correct? well i had kohl's, dell, and best buy. just paid all of them off about a month ago. shouldn't score go up??

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I take it you didn't see any point change?

Were any of these closed?

Do you have any others besides these 3?

What are the reported CLs on each card? And they show $0 on your CRs now, right?

[ficonovice]

On a related topic, be aware that a mid score of 620 may not be good enough these days.

I've been trying to do an FHA streamline refinance and was initially told a mid score of 620

was all that was needed.

Everything was set to go with US Bank, and then my mortgage guy told me that they raised their

mid score to 640. I then called my current Mortgage company (Flagstar), and they had good rates, but

their mid score was also 640. I then called several others and the "new" mid score for all of them

was 640.

Good luck!