Asking for a family member. 20 years AAOA, has cap 1 qs1 2k limit @22.9% and cap1 qs 4.4k @10.9% (both around 7-10 yrs old) , and lowes $7.7k @ 25%. Lowes wont budge on CL.
Arranged a debt shuffle, to combine the two cap1 cards to have annual fee removed, and eliminate that high APR. Tried numerous times to fix it, so looks like combining is the only way. Waiting for the qs1 to report a 0 balance any day now.
Only scores available are from capital one at 638. 48% utilization, and also CK FAKOs TU 725 and EQ 699. As we all know these can be way off. I remember the person mentioning a score that came in the credit limit increase denial letter from lowes. The score was 640. Perfect payment history on everything.
No inquiries whatsoever.
Two bad things on reports. Found an error for a old closed JC Penny card listed as a charge off, only on TU. Strange thing is it shows 3 different JCP cards, when they only had 1. Overlapping dates. It is being disputed and should be removed per phone rep. The other is a $360 cable bill that was a result of fraud. Suspected relative was guilty so did not want to pursue action, so figure its best to just pay it, as they said they would remove the mark immediately upon receipt of payment. What do you think?
This person also has a mortgage at 8.75% and would like to refi in the next 6 months.
Home value: $70-$80k. Mortage balance 29k, 2nd mortgage balance 6k @6.8% This is driving me crazy. Did not realize they were in this situation.
My thoughts are to get their scores up at all costs, at least to 700, since basically anything over 740 doesnt matter for a mortgage? Preapproved for a chase freedom card @ 22.9%. No other preapprovals anywhere.
To help offset this high util from low limits, I have added them as an authorized user to my two 5k limit cards as of today. 1 is always at 0, the other is always under 700.
Do you think if the person could get the dispute removed, and also just pay off the $360, it would be unwise to add a card before a mortgage refi? The person would not be carrying any more debt, and has a 80k income. Just on the basis that a person should ideally have 3 credit cards, and since we are closing the one, thought maybe the extra room might help. Getting the card is not a must. In fact, thinking a credit union 1 inquiry 5-10k limit card would be fine. They are 2.9% for 12 months, then 8-11%.. How does this sound:
1. Make appt w/ loan rep
2. Pay $360 for removal of bad account
3. Wait another 2 weeks for TU dispute
4. In the meantime, get utilization below 20% or lower which shouldnt be a problem.
5. Have full home inspection done
Probably should have them sign up here for the real mccoy $29.99.mo reports since a home refi is not something to take lightly. And the savings will be in the thousands. I think I may gift them a membership. Is that possible?
What is this big change that is happening the first of the year with home loans? Some first time mortgage refinance thing? All I keep hearing is, have to refi by dec 31 or rates will go way up.
Whatever the case, they currently pay $400 a month for the mortgage, and $177 a month for the 2nd. Not including any insurance. According to my calculations, if they took 50k @ 3.75% their payment would be $500 a month for TEN YEARS!!! Or they could take 60k for $600 a month for 10 years, and use the 25k for home improvements (and would probably add 40k value to the home...so currently owe 35, worth 70, if owed 60, would be worth double. What do you think is the best idea? I just want them to fix the things that are crucial, like a $5k drain repair, add a garage, etc.
Thank you all!!!
EDIT:
http://ficoforums.myfico.com/t5/Mortgage-Loans/Best-Way-to-Remove-quot-Account-In-Dispute-quot-for-M...
Looks like having disputes on a credit report is a no no? What is the problem with that? I have disputes up and down all of mine and it hasnt caused me any credit issues (student loan errors)
