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Need 10 Pt increase for mortgage preapproval

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Anonymous
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Need 10 Pt increase for mortgage preapproval

Hello.  This is my first post although I've been reading through the forums for weeks. I am currently in the process of trying to obtain a USDA guaranteed mortgage through my bank to purchase my first home. About a month ago the LO pulled my credit and advised I need to increase my middle score from 630 to 640 to get preapproved. There were 4 medical collections on my report, 2 from 2013 when I was hospitalized while uninsured, and 2 for medical care for my children which I didn't know existed since their father provided their insurance and bills were sent to his address. There was also a $48 collection from Verizon that I stubbornly didn't pay as a matter of principal which I now regret. Finally I had a 30 day late on my Walmart card from June 2013 which was my only late pmt ever. 

 

After reviewing my credit report I immediately began taking steps to clean up my report and hopefully increase my score. I paid the Verizon collection in full but they would not do a PFD. I also paid the two medical collections for my children's bills and each agreed to delete from my credit report due to the circumstances.  Walmart agreed to a goodwill adjustment and delete the 30 day late. I have 2 remaining medical collections totaling $780. I am not sure my course of action on these yet. 

 

In addition to the collections, I have 9 credit cards. More than half  were between 50-80% utilization. My total utilization was at about 45%. I began paying my balances down. I paid off 4 cards in full, 5 still carry a balance. As of now, my total utilization is 27% and my individual utilization on each card is 46%, 49%, 48%, 38%, and 36%. 

 

During the past month I have monitored my scores closely on the free sites (credit karma, credit sesame, quizzle, bank rate, credit wise, etc). I have been discouraged to see my scores go up then down and seem to be crawling up again. I know not everything has been reflected in my credit report yet so I'm sure all the rapid changes have made my scores inconsistent. However, I am anxious about having LO pull my credit again. I don't want the inquiry to hurt my score, especially if I'm at the threshold of gaining those 10 needed pts, but I am also on a time schedule since my lease is up Aug. 1st and my landlord is moving back into the house. 

 

In your alls experience, do you think I could have gained at least 10pts in only 4wks or should I wait longer?  What kind of increase can I expect from all the steps I've taken to clean up credit?

 

Thanks for sharing your knowledge with those of us who are just learning how to play the credit game. 

Message 1 of 12
11 REPLIES 11
Anonymous
Not applicable

Re: Need 10 Pt increase for mortgage preapproval

If you havn't already pay the 29.99 a month for the fico 3b it will give you your mortgage scores so you can see where you are at.  I wish you the best in your home loan journey.

Message 2 of 12
Anonymous
Not applicable

Re: Need 10 Pt increase for mortgage preapproval

Thank you. Are these the same scores that are calculated with a lenders tri-merge report?  

Message 3 of 12
Anonymous
Not applicable

Re: Need 10 Pt increase for mortgage preapproval

I gained 40 points one one of my scores by paying a $414 charge off account that had been reporting monthly for the last 3+ years. This was on my mortgage score, my FICO 8 barely moved.
Message 4 of 12
kc0039
Established Contributor

Re: Need 10 Pt increase for mortgage preapproval

Why didn't your loan officer run a simulator for you? Also, USDA can take a minimum of 620. Your loan officer probably does not have investors that will take 620

Licensed in IL
Message 5 of 12
Anonymous
Not applicable

Re: Need 10 Pt increase for mortgage preapproval

wait until all your updates have posted to your CR. Then purchase the premier 3b. $30 and you can pull mortgage scores monthly. I'd imagine just paying your util down as much as you have should give you a good boost.

 

/http://www.myfico.com/Products/FICO-Premier-3B/

Message 6 of 12
StartingOver10
Moderator Emerita

Re: Need 10 Pt increase for mortgage preapproval


@Anonymous wrote:

Thank you. Are these the same scores that are calculated with a lenders tri-merge report?  


Yes, the same scores.  If there is a difference in your scores it would be due to a change on your credit report from the time the lender pulled and the time you pulled.  Pulling your mortgage scores here is a consumer pull - no hard inquiry.  When the lender pulls its a hard inq.  So you can check your mortgage scores here and when they are where you want them to be, let your LO know so they can pull the new scores. 

Message 7 of 12
Anonymous
Not applicable

Re: Need 10 Pt increase for mortgage preapproval

'Thanks everyone. I don't know why the lender didn't mention a score simulator and from what I understand, the bank can set their own credit score requirement.  Even without it, I would want to clean up my credit regardless. It's a humbling experience to see so many derogatory accounts and know that lenders see it as a representation of your character. 

 

I actually purchased my scores here last night. The anxiety was killing me. I was relieved to see that all 3 mortgage scores are now above 640. EX FICO 2 = 665, EQ FICO 5 = 683, TU FICO 4 = 680. My lowered CC balances haven't even all reported nor has my CL increases on 3 of my cards, plus a $350 collection will be deleted next mo. I'm considering having my LO pull them just to get the preapproval so I can begin looking at home. They are selling fast and I live in a small town where there aren't a lot of houses on the market. 

 

Im nervous and excited to start this journey. If anyone has any tips or advice on how to navigate this process from getting preapproved to closing, I am all ears. I've read and researched but nothing compares to hearing it from someone who's been there. 

 

Oh, forgot to mention that scores my Lender pulled on 2/13 were:  EQ 630, TU 679, EX 616

Message 8 of 12
DallasLoanGuy
Super Contributor

Re: Need 10 Pt increase for mortgage preapproval

some lenders arent hip to the score simulator... or their boss wont let them run one.... they cost money

 

Retired Lender
Message 9 of 12
Anonymous
Not applicable

Re: Need 10 Pt increase for mortgage preapproval

Thank so everyone. I managed to raise my middle score by 51pts in a month. I am now preapproved and looking for a home!  

Message 10 of 12
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