Question About Mortgage Score Boost

[Anonymous]

Hello! I have been working on my scores for awhile now. I finally pulled the scores and TU was 642/ Experian 639. The LO said I needed a 620 so I thought I was good to go. The LO pulled TU and it was 602. She pulled Transunion 04. There isn't much left to do to pull the score up but pay off CC. According to the report she pulled, Ihave 30% available on my revolving accounts. My question is would I gain more points by paying the CC down below 25% or by paying off an installment debt? Both would help lower my monthly payments but which one would result in the biggest score boost? Should I equally pay the cards down or put the most money towards the largest balance? It was very frustating to see the score she pulled and now I'm determined to boost it back up.

Thanks In Advance!!

[Scope27]

For most getting total credit card utilization at 9% or below will give an increase. The FICO score looks at total utilization.  From what I've read the FICO score is dependent on a mix of credit so keeping the installment loan may help.  The TU04 has been known to give some a +/- around 30-50 points when compared to the TU98 score that we pull here.  As always these aren't one size fits all. 

[Walt_K]

Seconded.  For score purposes, you absolutely want to pay down the CC debt as opposed to the installment debt.  Utilization on installment loans has almost no effect at all, whereas CC utilization is a major component of your score.  Getting below 25% from 70% will certainly help.  As said, above, for max scoring, what typically works for most people is to have one card report 9% or less utilization.  That is 9% or less of that card's limit, so it will end up being less than 9% total utilization.  You want all other cards to report a $0 balance. 

[Booner72]

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@Anonymous wrote:

Hello! I have been working on my scores for awhile now. I finally pulled the scores and TU was 642/ Experian 639. The LO said I needed a 620 so I thought I was good to go. The LO pulled TU and it was 602. She pulled Transunion 04. There isn't much left to do to pull the score up but pay off CC. According to the report she pulled, Ihave 30% available on my revolving accounts. My question is would I gain more points by paying the CC down below 25% or by paying off an installment debt? Both would help lower my monthly payments but which one would result in the biggest score boost? Should I equally pay the cards down or put the most money towards the largest balance? It was very frustating to see the score she pulled and now I'm determined to boost it back up.

Thanks In Advance!!

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My LO used her score program that told her what I should do to get my scores up.  She was DEAD ON.  I'd do what she said - and I'd shoot for a balance less than 30% - all report zero except one should report a small balance 1-9% of your limit.

[Anonymous]

Little update- I pulled the Transunion score from this site. The score was 601 and when I ran the simulator for paying down debt, it put the range of 601-655. My question now is, we had a bankruptcy discharged in Dec 2009. Will the score go up some as the discharge date hits 2 years ago? On the report it said that a factor of the low score is using a finance company. The open/ revolving account is through a finance company. I thought that an open loan with a great payment history would help, not hurt the score. Since our bankruptcy in 2008, we have not been late on any payments and have had a good mix of credit the whole time (2 CC, 1 auto loan, 1 installment, student loans) but we cannot manage to get the score to increase without it immediately falling back down. I am prepared to pay both cards off and/or down to a low percentage but the estimator made it appear as though if I did the score would STILL be low. This is beyond frustrating and I do not know what to do. I know FHA takes lower scores but require a down payment. With FHA's LTV ratios would purchasing a home that is worth more than the asking price be eligable for full financing?

Thank You so much for your replies!!!