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Help!!! Advice about utilization, dispute removal impact to raise Fico score for mortgage loan

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ChicAndFabulous
Valued Member

Help!!! Advice about utilization, dispute removal impact to raise Fico score for mortgage loan

Hi everyone! I am in the process of trying to apply for a $300k mortgage, with 5% down in Dallas, Tx. Either FHA or conventional, depends on how my scores end up after some disputes come off.

My lender pulled 654 EX, 636 EQ, and 608 TU. I WAS working with a credit restoration company and they sent out DV letters to some accounts and they ended up showing as disputed on my credit report. So annoying. I already sent out a letter to the bureaus to remove "consumer disputed this account information" I know the scores are going to drop, but waiting to see what the impact is.

This is what my credit history looks like right now:

1 auto loan since 9/13, no late payments. $834 monthly with $40,302 balance.

1 citibank credit card since 3/13, auth user, no late payments, $2981 reported balance last month but pay it off every month. $16,500 CL I've been reading these forums on how balances are reported and credit utilization. Would I be able to increase my score any more if I were to leave 1% reported balance at the statement end? Will it help my credit score at all to do that next month? I'm worried about those disputes coming off and my scores tanking, making me no longer approved for a mortgage.

Victoria Secret Charge card since 11/10. $250 CL, 0 balance reported, no late payments. I charged $43 last month but then paid it off a few days later, so it shows it was last active last month but 0 balance reported. Is it best to keep this at 0 balance or use 15% of CL, let it report balance at statement end, but still pay off??

Bank of America Secured card. Just opened this last month. Advice given by broker to have more good accounts. Opened 04/14, $500 CL, $77 reporter balance, and paid it off so no late payments. My question about this is the same aa above with victoria secret. Don't use and leave at 0 balance? Or use less than 20% of CL, let balance report, and pay off. Or use less than 20% of CL, and pay off before balance reports so 0 is reported? Getting confused about the 0 balance I keep reading about. Do we still need to use it and let 0 report at statement end or don't use the small credit cards at all and use only one card (my citibank with $16,500 CL) to report a small balance at statement end?

Onto the bad part of my credit....
4 collections total and 1 charge off:
-medical collection from 9/2008 for $223 that is supposed to fall off in Sept. Reporting to EX only and was deleted from TU and EQ
- $1284 from Ad Astra Recovery for a payday loan from 5/2011. Reporting to all 3 CBs and showing as "consumer disputed this acct info"
- $510 collection from Millennium in 5/11 for a payday loan. Reporting to EX and TU and "account info disputed by consumer"
- $453 from Millennium that was first reported by Millennium in 2/13 but CBs showing date opened 12/12, but DODF from OC (first national credit card) is actually 12/09. Reporting to EX and TU as "account info disputed by consumer)
- charge off for $899 from capital one in 12/09. Reporting to all 3 CU.

2 30 day late pmts in 8/09 and 12/09 on an auto loan with ford Credit that's paid, 0 balance and closed

2 30 day late pmts in 12/11 and 1/12 on auto loan with GM financial.

7 other closed accounts in good standing with zero balances/late pmts. (1 was auto loan and others retail/revolving credit cards) Oldest credit card was opened in 2001 but closed.

How bad do you all think my credit score is going to drop once the disputes come off? One lender that thinks I can get pre approved for FHA says I need to pay off all collections and asked for them to be deleted from my credit report. He said capital one is awful to deal with so he wasn't making me pay or deal with the charge off. If I pay off collections, how much do you think my credit will improve? And how soon?

Another broker told me not to pay anything yet until the disputes come off and do a rapid re score. He is trying to get me approved for conventional and some lenders for conventional don't require for all collections to be paid, but FHA requires for all collections to be paid.

What should I do? Pay off all collections now and hope the collection agencies delete and keep a 1% balance on my citibank card to report at statement end? Need to get my score up ASAP.

Or if my fico scores come back little to no change after disputes come back, don't pay collections unless lenders require me to pay them?

My collections are from 2008 (medical) and 2011 and around $2000 total (if I don't pay the medical) I'm worried about paying them and barely making a difference in my credit score, thus, not making a difference in a pre-approval now or not making a big difference, thus getting same interest rates as I would have before paying the collections.

Other info on me: single, $80k base plus commission. 2013 W2- $132k. 2012 W2- $116k. $15k in savings. $20k in 401k.

Please give me any and all advice! Trying to get pre-approved ASAP and buy a home in next 30-45 days so need scores to go up ASAP. I would rather go conventional if I can get a decent interest rate, which my broker is assuring me as long as my credit scores don't tank after disputes come off. Thank you so much in advance for reading!!! Need all help I can get!
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