06-11-2012 10:25 AM
Just spoke with LO and she told me we will pull the CR in mid-July and hope that in the meantime it increases. Hubby had a $500 CL with Capital One and we paid it down to a 9% utilizaiton last night. Should we see a few points of improvement from that? We just need 8 pts!! Any other suggestions?
We do have one large CC. It has a $5,200 limit and it has about $4,900 on it. I know, it's so bad. We just have never attacked it yet. Last night yrs we paid down around $5k in other debt and just need to get on the wagon again with that. The LO said to hold on that for now.
What are your suggestions? Trying to get it to a 640 for this USDA Guar Loan.
06-11-2012 10:28 AM
Every little bit of credit card debt paid down helps, what was the credit card balance at before you paid it down to 9% uti? If it was above 30% UTI before and now you paid that down to 9% that will help some.. even paying down $50 or so on the other would help..its not hard to get 8 points so you may be ok, the credit card company will report it a few days after your statement ends
06-11-2012 10:32 AM - edited 06-11-2012 10:37 AM
I don't know this for a fact - so take it with a grain of salt.
But my experience backs up what I've read elsewhere on this site. FICO scoring models used by mortgage lenders consider not just your overall utilization but also individual utilization -- do you have any cards that are maxed or close to maxed (utilization > 90%).
I achieved what I thought was an excellent score bump by paying my utilization down from 95% to under 30%.
But I did that by paying down high APR cards first. I left my low apr credit card maxed.
Then I paid my low apr card down from 95% utilization to about 80% utilization, and I got another 10 point bump (656 to 666).
So not all credit card paydowns are equal. Hopefully, someone else will correct me if I'm wrong, but my strategy to maximize short-term FICO boost would be:
1. Make sure no cards are maxed
2. Then, try to get some cards down to 0 (if possible)
3. Only after 1 and 2, start focusing on high apr cards
Under other conditions, this is terrible advice. If you don't need to use credit, do the high apr accts first, no question. But when a mortgage is on the line, it's a different story. A few FICO points can be the diff between approval and rejection, or between a rate that's just okay and a rate that's pretty good.
Another way (but a dicey one) is to try to get a credit line increase on your existing cards. Some credit cards allow you to request a CLI afer several months based on your account standing and usage history. If you can do this, great. But whatever you do, don't go through with a credit line increase if it requires a "hard pull." Don't hammer your credit report with revolving credit inquiries right before you apply for a mortgage.
06-11-2012 10:48 AM
I imagine that will definitely help.
Personally, I'd still feel better if I could get the balance on the 5200 limit card to somewhere below 4700.
BUT, if your LO suggested otherwise, I'd listen to them. They have more information (and experience) than I do . . .
06-11-2012 12:19 PM
I had $1900 on my card with a $2700 limit. I just paid $1000 towards it today so now, I am using $900 of my $2700 limit. About 33% utilization. I am curious to see what this does to my score. I have enough to pay it off, but I want to see my score move in increments. We shall see what happens. Anyone have any idea what going from 72% utilization to 33% utilization will do for my score?
06-11-2012 04:34 PM
Should help.... don't forget to put some away for downpayment then closing....
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