Authorized User on CC - Lender Asked to Cancel CC

[Active1181]

1. Credit.  FICO EX 675(myfico); FICO EQ 699(myfico); FICO TU 709(myfico) (Wife FICO 773 (EX/EQ), 763 (TU) From Lender
2. Income.  $65k/yr base + comission (24mo. avg monthly commision = $2k/mo.) | Wife salary 32k/yr
3. Source of income.  Both wife and I are employed (we have W-2's)
4. Monthly debt payments.  Capital One $3500 credit limit, $160 balance ; Amex (AU Only) $13k credit limit with $2,600 bal (now removed); wife has BOFA, $8K limit with $0 bal, American Honda Finance: $526/mo, balance = $23,830
5. Employment: Employed with the same company for 9 years, wife employed same company 10 years, I've been in the same position (sales) for 4 years, wife in same position for 10 years.
6. Assets/Reserves. We currently have saved $10k in the bank with additional $5k coming from payroll next week. Addtional $7K gift cannot be used per lender / 401K total $25K, using $10K for DP
7. Property Location.  Chino, CA / San Bernardino County California
8. Property.  Detached Condo
9. Value.  Price $415K - builder will cover closing cost
10. Downpayment: 5% ($20,750)
11. Occupancy.  Primary residence, first time home-buyers
12. Transaction Type.  Purchase
13. Estimated Closing Date: 9/30

Hello Everyone,

My LO just asked me today that underwriter did not notice during conditional approval that I was an AU on my parents Amex, $16k credit limit with $2600 owed. She asked me a few days ago for a LOE stating my parents are responsible and pay this card, which I provided.

Today LO tells me underwriter conditioned that I must cancel AMEX card which I am an AU and they will re-score. They feel it is skweing my FICO. I thought with the new rules that AU isnt weighed?

Now I'm freaking out because of the re-score, what if it hurts my score. I only have a capital one, $3500 limit with $160 bal and a $400 limit card with a $0 bal.

These are my current scores: FICO EX 675(myfico 9/2); FICO EQ 699(myfico 9/11); FICO TU 709(myfico 9/2)

When I paid off the capital one card, (about $3500) my EQ score jumped from 680 to 699 (exactly what the simulator predicted). The simulator shows  EX at 700 and TU at 733 which I would think are my current scores.

When lender ran me back in late Aug I was at a mid-score of 667.

How much could closing the AMEX card hurt me? I'm worried now we wont get the loan or they will hike up my interest rate, currently locked at a 4.5%.

Please help!

-Alex

[pizzadude]

Mortgage lenders are still using the FICO04 score model which includes AU accounts in utilization.   The FICO08 model ( sold here ) and newer don't count many AU accounts.

It's hard to predict what your score will look like after removing the AMEX account.  Since there is a balance showing along with the $13K CL perhaps your revolving utilization will improve.

[Active1181]

Thanks Pizzadude, I hope that is the case and there is very little change or possibly an improvement!