Need to Quickly Increase Middle Score By 10 Points - Please help!

[Anonymous]

I owe $13,921.00 on my credit card with an available balance of $16,200.00 so at present I am using about 86% of my available credit.  This is my only credit card.  I have a good payment history and a good length of credit history.  I am presently applying for a mortgage and would like to get the best rate possible given my circumstances.  Right now my high score is 715, middle score is 690 and low score is 683.  Lender is using middle score of 690 to quote me an interest rate.  I cannot afford to pay down payment on house, closing cost AND pay down the credit card off completely (the ideal situation) but my interest rate would be lower if I could at least get the middle score to 700 or higher.  Is there anyway for me to quickly do this????  i.e. - should I pay off a certain amount of my outstanding balance, request a increase in my credit limit or what do you suggest?  I expect the ratified contract next week and will then apply for financing next week.  Thanks  - I really appreciate your help!

[Anonymous]

First off, do not go for a limit increase.  This will incur an inquiry and the following FICO score hit.  Also, the mortgage lender is going to want to know why you were apping for credit.

You are going to need to pay down a few thousand of that balance to really get a sizeable score increase..  they say 10 points for every 10% you lower your utilization, but that is nowhere near a hard number.  that means probably 3K to get 15-20 points.

[DallasLoanGuy]

first of all..... what type of loan are you applying for?

down payment %?

in some situations.... those 10 points dont mean anything if much at all.....

[Anonymous]

Thanks so far.  I am applying for a 203K FHA loan.  Does that make a difference?

[DallasLoanGuy]

nope.

640 gets the same rate as 800.....

i would rather see you save your cash.

[Anonymous]

Ah... . thank you so much DallasLoanGuy.  My husband and I were just trying to figure out how we could bring the balance down.  I have another related question though.  On my workup sheet by BofA, they list my monthly income as $8229.00, my other obligations as $681 and my PITI as $3,225.38, leaving me with a DTI of 47.07%.  The LO stated that everything was fine but that it was a "tight" situation.  Should I try to reduce my credit card balance in order to reduce the DTI?  Thanks.

[Anonymous]

47% is pretty high.  Not undoable by any means at all, but it is still outside of normal parameters.

As far as paying down debt to lower DTI, you would have to pay ALOT of that balance down to make a substancial change in DTI.  Your payment difference between 10K on the card and 14K on the card is going to be negligible in the scheme of things..

More than likely, your best option is to hold the funds as reserves while letting the LO/UW that IF NEEDED, monies could be applied towards the cards...