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Hello, Forgive the length of this posting, but I am not sure as to how FICO works exactly...I am seeking guidance as to the quickest way to further enhance my FICO score (please no guess work, I really need to have a response from someone who really has insider knowledge as to the best way to proceed to maximize my FICO score) I am about to pay-off all (or nearly all) CL/CC debt.... I have a 712 credit score (never been late on anything, but I do have a high revolving debt ratios). I want to move my score to the 800+ realm (to refinance my house at the most advantageous rates). I have few questions:
1. I have several Credit Lines and Credit cards - 10 to be exact with a high total debt ratio in 70%+ range...(I have three options):
a) I could pay all of them completely off (but that would run me low on cash reserves, which may "possibly" present a slight dilemma as you will see further below as to what my goal is)
b) I can pay most of them down to a zero balance and leave couple of them with a 30% to 41% balance debt ratio to limit.
C) I can pay couple of them to 0 and leave the rest of the CL/CCs to with a balance of around 7% to 9% of the limits.
What is the best route among the three options (or if you can think of a better way to do this please let me know).
2. How fast does FICO jump up if all of a sudden my debt goes to zero or near zero balances all else being equal (i.e. never being late on any payments, long credit history, etc.)? So, once FICO sweeps the new figures in April and the results are only 1st and 2nd mortgages will it automatically jump up or does it take time to go up to my desired score of around 800?
3. Going back to (option 1 a. Re. my hesitation to pay everything completely off), I have a first and second mortgage on my house (currently paying 4 3/8 on first [5/1 ARM expiring October 2009] and 7.95% on second fixed). Under current limits the addition of both would be considered a jumbo loan...However, I am hearing that the Jumbo loan limits may be increased to $750K which would convert my house loan to a standard loan and although I do not believe that the area I live in has been affected by lower real estate appraisal, I still would like to keep a bit of my cash in case I need to further pay down some of my first / second mortgage to refinance and lock a 15 years or a 30 years and get rid of my ARM that is going to become variable in October of 2009. Main objective - I would like to combine 1st and 2nd and lock them down (while the interest rates are down) ...