How to increase mortgage score

[Subexistence]

If I decide to rent for a couple months, should my score optimizing strategy change? My vantage score is not high because it puts too much emphasis on new accounts and age of profile.

[Revelate]

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@Anonymous wrote:

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@Revelate wrote:

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@Anonymous wrote:

I personally doubt that the old mortgage models will be used four years from now.

I am confident that your mortgage scores (possibly driven by more recent models, possibly not) will be fine in four years.  I'd not worry about AAoA, though it might be reasonable to make sure yours is > 2.0 by the time you buy.  AoOA will also matter but that will keep going up month by month regardless.

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Not sure I'd bet on that one; the GSE's have been pretty happy where they're at for the last decade, and until they find something more accurate (more profitable too I might add) they aren't hugely likely to switch.  Making a change like that has all the risks of trying to navigate the Titanic between icebergs... mortgage debt is something like 14 trillion dollars as of Q1 according to the Fed, it's kind of a big deal to switch scores and it's not the subprime lender that literally switched scores on a whim of the owner from FICO EX 2 to EX 8 around 7 minutes later.

Sub: At some point besides staying clean, just stop opening accounts and let things age.  When a mortgage is call it 13 months out, stop applying for anything at all in order to maximize your score pre-mortgage, though admittedly when we're talking undergrad + masters, you will probably be gold plated anyway short of doing something dumb (like I've done in the past) to your credit.

You should be fine regardless.

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Here is an article from earlier this year that may give you some insight into why some of us think that that other models will be eventually used:

https://www.housingwire.com/articles/39163-house-reintroduces-bill-to-end-fico-monopoly-at-fannie-mae-and-freddie-mac

Note that I didn't say it would happen this year or next -- the context was our OP indicating that his home purchase would be four years from now.  Even then I suggested "personal doubt" that the existing models would be the single ones used (not certainty).  Also worth bearing in mind is that as of next year Experian's mortgage model will be 20 years old!   It can't be the case that nothing has come along in that time that is more predictive.  The more probable explanation is that Fannie and Freddie have had a monopoly on controlling it and that therefore lenders have had no options. 

The really key idea I wanted to make sure that the OP got was that his initial assumption might be mistaken: namely that there are a single set of mortgage models set in stone and that he should be expecting with certainty that these will be used when he buys a house in 4-5 years.  Wiser is to just generally have good habits.

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I'm fairly confident that FICO can afford lobbyists as well as the bureaus can too .

Betcha any amount of money we scratch the surface of those politicians and you find the big 3 behind them, especially with the explicit reference to Vantage.

Ultimately score version should be irrelevant: build a pretty file, get a pretty score, regardless of algorithm selected.

[Anonymous]

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@Subexistence wrote:

If I decide to rent for a couple months, should my score optimizing strategy change? My vantage score is not high because it puts too much emphasis on new accounts and age of profile.

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You may have made a typo and written months above when you meant years.  Is that right?

[Subexistence]

What's wrong with months?

[Anonymous]

It's an odd thing to do.  Hard to imagine wanting move into an apartment or a house, pay rent at it for two months, and then break the lease and move into another house that you have purchased during that two-month period.  That's such an uncommon choice that it struck me as more likely you meant year rather than month.

Also hard to understand why you imagine there would be a difference in preparing for a house purchase 48 months from now vs. 48 + 2 = 50 months from now.  Surely the generally strategy of what you should be doing in the next few years will will be the same whether it was 48 or 50 months?

If you were trying to suggest a timeline of 4 vs. 6 years, however, that I can imagine might involve different strategies.  You could for example do much more vigorous CC bonus chasing all the way up through month 48 or beyond if you planned to rent for two years after that.