@Anonymous wrote:
My fiance and I are going to be buying a house next August (that's the goal at least!). She has pretty great credit (780 Experian) and no negatives on her report!
You use the word report (singular) rather than reports and only mention Experian for your girlfriend. Has she looked into pulling all three of her reports and getting a FICO score from all three bureaus? We can suggest some ways to do that which would cost her almost nothing.
I on the other hand have good credit (and have been working on it for the last year in earnest) but I do have some derogatory marks.
Experian: 732, Trans Union: 721, Equifax: 714
What tool did you use to pull those three credit scores?
Credit cards:
Capital One 7k credit line, Always PIF, good standing, never late on payments.
Amazon Store Card, closed but PIF, 120 days late 4.4 years ago.
Citi Card, closed but PIF, 90 days late 4.4 years ago.
Loans:
Student loans totaling 14K, interest rates from 3.5-6.8%, never had a late payment
Joint car loan with my fiance, 12K, interest rate 2.49%, never had a late payment
To summarize:
* You have exactly one open credit card.
* You have a 120 day late and one 90 day late. No other derogs.
* You have two open installment loans
So, a couple questions.
1) How can I pull my score up in the next year and a half? Is it just a matter of my lates falling off at the 7 year mark?
First you want to get as many quick points as you can. You can do this by paying your credit card balance down to a small number, like $10. Keep your card reporting a small balance like that every month for at least the next three months.
How does your balance appear on your report now? And what is your card's credit limit?
At the same time that you are lowering your CC balance, you should be learning all about strategies for getting derogatory records completely removed from your reports. Do some research on Goodwill Letters and then when you have learned all about them, read up on something called the Saturation Technique:
http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/The-Saturation-Technique-Best-GW-adjustment-odds/td-p/4727098
Once you have improved your score from the CC balance optimization, you should apply for two more credit cards. I realize you are convinced that this would be a bad idea, but given that the home purchase is 18 months away, it would acually be a very good idea. When it comes time for the mortgage, FICO will really like it if you can show that you have managed three credit cards. FICO will especially like it if you can show that over 51% of your cards have a $0 balance with one card showing a positive balance. This is mathematically impossible without three cards.
2) After our wedding in June, we are anticipating having left over money from our wedding (yay for awesome budgeting!) should we keep that in the savings and put that toward a down payment?
Yes.
Or would it be more beneficial to pay down some of my student loans/car payment? Would this help my credit score?
No. It would not be a good idea. First off, it would not help you with your mortgage scores, which are different from your FICO 8 scores. (It might help you with your EX score, but it will not help you at all with your EQ and TU mortgage scores.) You can always choose to pay down those loans 15 months from now if the scoring models change -- e.g. if the mortgage industry switches to FICO 8, conceivable though highly improbable.)
(I know we shouldn't open any credit cards before we get a mortgage and that we shouldn't pay off student loans becuase that will lower our scores.)
As I mention above opening two more credit cards now would be a good idea not a bad one. And paying off loans of any kind, student or auto, is never good from a scoring perspective.
Hope this helps. Feel free to ask more.
