Mortgage question- feeling frustration....

[mtldurra]

I need some advice. I have been trying to obtain a mortgage for the last year and ahalf. Initially my credit score was 578 in 8/12 due to a divorce. At that time I did not have any credit of my own so upon the advice of my mortgage broker, I applied for credit. I opened a 1000.00 secured Capital one card. In Dec 2013 my credit score was 637 (3 points away!) I was told to open another card because my credit was not going to go any higher without additional credit lines. I then opened a Walmart Credit Card with a 300.00 credit line. Now Feb 21014 my credit score is 633! Again I was told to open another credit card or obtain another line of credit. I now have opened a Chase Credit card with a credit line of 3500.00, Of course my score has now dropped to 627 with the hard pull. I am feeling frusterated and not sure what to do. Should I  be patient with the credit lines I have? Will opening a different credit line, such as an auto loan help boost my score? (I have been paying an auto loan for the last 5 years on time but it is under my ex husbands name). Any advice will be appreciated!

I have paid all credit card balances dow to a 10/mo balance and have not exceeded 30% of balance.

August 2013 credit scores:  629, 637 and 645

January 2014 credit scores:  630, 633 and 648

[fot1]

Where are you pulling your scores from? That could make  ahuge difference. To get your best score only let one cc reoprt a balance less the %10 and all other report zero balance. Adding a loan would boast score after the intial drop of the  inquiry caused. But seeing as you score is low underwriters mike not like any new accounts the year prior to mortgage app..

[mtldurra]

The score I posted came from the mortgage company. The MyFICO experian score is usually really close to her scores although the MyFico Transunion score is much higher then the score from the mortgage company. It sounds like maybe a auto loan is not the best way to go. I am just so tired of not seeing the scores go up any.

[Revelate]

Welcome to the forums!

It would be handy if you posted what else is on your credit report; if you have derogatory information of any sort, I'd recommend sharing that over in the Rebuilding Your Credit forum where there's lots of expertise for dealing with these as is sometimes possible.

As I understand it you have 3 credit cards, and no installment tradelines?  It doesn't matter how much you use the credit cards, you want to pay before the due date and only want one of them reporting a balance, and the others should be $0; the balance on the one card should be between 0% and less than 9% of your credit limit on that card.  Vis a vis on the Chase, anything from $0.01 and $300 roughly would be fine.

If your report doesn't look like:

Card A:  <9% balance

Card B: $0

Card C: $0

Then make sure it does for next month and pull your scores again.

If you have absolutely no installment loans, then yes getting something as an installment tradeline will be a couple of additional points but I would do it on the cheap: open up a secured loan against a small portion of your assets (I'm assuming you're saving cash for downpayment) or get a credit builder loan from a CU like DCU.  Minimize the interest payments, and keep it short so you can get it off the books before your DTI calculation if you're borderline there.  Six months is fine.

That all said, to reiterate, if you have anything else on your report besides those 3 credit cards that makes a difference; however, you have more than enough credit cards, just likely need to tweak their reporting for optimizing your score.  If there's nothing else there I'm a bit surprised your score isn't higher, certainly within six months on that Chase one and if you need to the installment loan you should be.

Finally there are some lenders that'll go down to a 620 middle score, if you need into a house sooner than six months and even fiddling with the balances on your cards doesn't work, may want to take a look at other lenders.

[RnJ]

If I may ask, why are you paying an auto loan with your ex's name on it?  Is there some way you can get your name on the tradeline and acquire that history by doing so?

Do you have a family member with a good credit history (with low balances) who would put you as an AU on an account?  If they have high CL's, and very low balances, that might help.  Granted, the lender may not include the AU account for scoring purposes, but it's worth a try maybe.

As others above suggested, merely keeping one card reporting a balance of less than 10% (try 1-3% for example) and the others with 0 balance might gain you a few extra points, but be prepared that when you apply, a new credit check will require a new HP, and potentially one or two more before closing.

Not sure getting a small loan is going to help at this point, but it's your call, if you have the time to see how your scores end up for a couple months, and if no significant change, then you're facing another small time frame to see how a new loan would affect your score.

Try reducing the util on the cards first.  Consider another lender (or broker), one who doesn't keep suggesting applying for more credit.   When obtaining a mortgage, applying for credit within 6-months to a year before applying is generally regarded as a no-no.