2 Loan officers 2 different opinions and I am Confused!

[cocomadd]

Hello everyone,

My husband and I have signed a contract for a to be built home.  Well, we found out shortly after that my husband's scores took a tumble, nothing major and we are working on that, but we have been in talks with 2 different loan officers and they both have stark different approaches on getting the scores higher and on qualifying for a USDA loan. 

Loan officer 1:  Says that I have to pay all medical collections that are less than 5 years old, but to wait until after application is placed for conditions.

Loan Officer 2: Says pay (1) medical collection, the one that is reporting recently, FYI-they are from 2008, but EQ reporting currently on it.

Loan Officer 1:  Says to use our credit cards and to keep at very low utilization, to help with score

Loan Officer 2:  Says to cease using credit.

Now, we are waiting for reporting agencies to update the paid bills because I took loan officer 2's advice, but now I am wondering if I made a mistake and loan officer 1 was correct.

So far I feel good that the bills were paid, but I have reservations on if and when the scores will increase.  My husband needs to gain at least 15 points by August.  Loan officer 2 said the score should be fine once the CC paid in full is reported.  They were paid last month.

Thoughts?

NEW SCORES:  EQ 645 EX 667 TU 659

[pdog661]

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@cocomadd wrote:

Hello everyone,

My husband and I have signed a contract for a to be built home.  Well, we found out shortly after that my husband's scores took a tumble, nothing major and we are working on that, but we have been in talks with 2 different loan officers and they both have stark different approaches on getting the scores higher and on qualifying for a USDA loan. 

Loan officer 1:  Says that I have to pay all medical collections that are less than 5 years old, but to wait until after application is placed for conditions.

Loan Officer 2: Says pay (1) medical collection, the one that is reporting recently, FYI-they are from 2008, but EQ reporting currently on it.

Loan Officer 1:  Says to use our credit cards and to keep at very low utilization, to help with score

Loan Officer 2:  Says to cease using credit.

Now, we are waiting for reporting agencies to update the paid bills because I took loan officer 2's advice, but now I am wondering if I made a mistake and loan officer 1 was correct.

So far I feel good that the bills were paid, but I have reservations on if and when the scores will increase.  My husband needs to gain at least 15 points by August.  Loan officer 2 said the score should be fine once the CC paid in full is reported.  They were paid last month.

Thoughts?

NEW SCORES:  EQ 645 EX 667 TU 659

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Paying old collections can negatiely affect a score, and the effect could be major.  How much is owed for each individual collection?

Paying off all of your credit cards may hurt a sccore as well.  The best score ratio is only 1 card reporting and have it report a low balance.  I like to have 1-2% report.  

What was your utlization of the cards (open credit to available limits ratio) prior to paying them off?  If the UTL was like 25%ish then paying them to 0 will still help a score. 

[cocomadd]

My husband's cc was at 50% UTL.  My old medical bill was only reported to EQ, so I think that will not be a major concern because EQ is my low score.  I think we are good my husband's score just went up 5 points today with paying the one card, now the other has not yet posted.  I hope and pray that one will increase the score 15 or more points that was an old Kohls card charge off from 2008 that wasn't going to be paid until we disputed and Kohl's/Cap 1 began to report to EQ again, so score tanked and loan officer said to pay it off, we did pay the whole thing $1,101 dollars last month, but Kohl's just sent letter to CA's and they have not updated!  I am hoping they will ASAP, so we can get those scores up!  Does anyone know how much points he will gain??

Thanks!

[sunnysideup]

I will just warn you that we went through this with a USDA lender - he gave us very bad advice about what to do with our money, credit, finances, etc, while in the USDA process, and the result of his advice?  Well, he dropped us after two pre-approvals (it took a long time to find a house), and denied us the third pre-approval because we followed his advice.  His u/w department did not like what we had done! 

With that said, each loan officer will have a specific lender in mind and those lenders will have their own requirements.  I would agree with using your credit and keeping very low utilization.  You want your debt to income ratio to be low.  As for the collection, I would research to see if that is a USDA requirement or a requirement of the lender.  Just keep in mind, that by attempting to pay a collection, you might open yourself up to new reporting on your credit report too, even just inquiring about it could "awaken the giant".  Be sure that is what you want to do before you go there. 

Your mid score is 659 - is that FAKO or FICO?  I can't understand why you need 15 more points?  640 is the usual GUS auto approval score.......