Rapid rescore frustration

[ireland381]

I just thought I'd share (vent) my frustration with trying to improve our credit scores in the process of trying to get our first mortgage.

So when the bank first pulled our scores, my husband and I both had middle scores of 631. For our FHA loan, the bank wanted us to do a Rapid Rescore to try to get to 640, which would increase our chances of getting the loan (we were tentatively preapproved) and lower our interest rate pretty substantially.

Our loan officer (claiming to be no credit expert) refers to a company to do the rescore, and they looked at our reports and recommended that we pay down some balances and get documentation to show a judgement on my credit had been paid (it's been paid for years but I didn't realize that has never shown on my reports). We don't have a lot of credit card debt; I had just paid off a card with a $2000 balance and had another with about $500/$2000; my husband had one card about $300/$500 and a closed card at $6000/$7000. 

We followed their recommendations and spent about $3000 to pay down our balances. In addition, my car loan was paid off (hadn't shown on credit yet). Besides paying off my husband's balances completely, and paying off several small collections (which I didn't think would have an effect on our scores unless they were removed, not just paid) we figured we'd done everything we could do and were confident it would have a big impact on our scores. We got our quarterly monitoring scores around that time and they went up about 10 points, so we were hopeful.

It had been more than 30 days since our credit had been pulled by the bank, so before the company could do the rescore, they had to pull our *actual* credit reports again before rescoring. And both of our scores went DOWN!!! They decided to not even do the rescore because they didn't think it would end up helping now.

My loan officer didn't say why or how much they decreased, but needless to say I was livid, especially since we spent $3000 to do the things THEY recommended to help! 

Anyway, this just goes to show that even after years of trying to improve our credit, I'm totally mystified by the overall scoring process and incredibly frustrated when our considerable efforts seem to be in vain. I can't imagine paying down those balances won't help in the end, but at this point, who knows. I just can't understand why the whole credit scoring process isn't more straightforward. I can't understand why one's own credit, which has such a huge impact on our lives, isn't more transparent or accessible. I can't understand why there isn't more reliable instruction on how to improve one's credit, when so many people try so hard to do so. It just all seems like a craps shoot to me. I realize that most improvement takes time, but I just can't understand why things that should be positive changes end up hurting you in the end.

Okay, venting done... just had to get that out, and share my rather frustrating experience.

However, despite this setback, the bank was very helpful and our rate only ended up going up 1/8 point, and they gave us an additional $3000 credit on our closing costs, so as far as our loan, it actually turned out okay! I just hope one day everything we're doing will help our credit...

[Klesko]

You just got some bad advice really.

Paying down the cards you have balances on was the only good idea. No one should ever pay off a older collection when applying for a mortgage unless the underwrtiter requires it. No good can come out of it. Now if you got some pay for deletes they would have helped but they generally take much longer to do.

Sorry this happened but sounds like you ended up getting the loan so I guess all is well.

[indecison]

It is a frustraint joureny for sure. Glad that it looks like it is working out in the end!

[ireland381]

Yeah, my loan officer originally thought I should pay off the collections, but I told him that wasn't going to help my score! It was the credit company doing the rescore who advised that I pay down the balances... They never did the rescore itself, and last time I checked most of the changes that we made weren't updated on our real reports, anyway... maybe they'll go up once they do, but doesn't matter at this point.

I don't think there really is much we can do in the short term to improve our credit anyway, short of paying off the one credit card that's still at about 50% utilization, and getting pay for deletes, but I've never had any success with that. Most of our credit issues are the judgement, old late payments, and the collections. Oh well! As long as we get the mortgage (which I think should help our score anyway?) it's mostly time from here. But we shouldn't need to get any new credit any time soon, so it's okay. 

[jnkp2001]

 "Anyway, this just goes to show that even after years of trying to improve our credit, I'm totally mystified by the overall scoring process and incredibly frustrated when our considerable efforts seem to be in vain. I can't imagine paying down those balances won't help in the end, but at this point, who knows. I just can't understand why the whole credit scoring process isn't more straightforward. I can't understand why one's own credit, which has such a huge impact on our lives, isn't more transparent or accessible. I can't understand why there isn't more reliable instruction on how to improve one's credit, when so many people try so hard to do so. It just all seems like a craps shoot to me. I realize that most improvement takes time, but I just can't understand why things that should be positive changes end up hurting you in the end."

In lies the problem, no one can or are willing to answer these questions....

[tooleman694]

I did a rapid rescore and my score dropped too.

On your first post, did you say you have a closed card showing a 6k balance?

[llecs]

Ditto to a comment above. You got some bad advice.

Paying down a CC is good for utilization. However, paying off a closed CC will permanently remove the card from utilization. If you paid any closed CCs, and that CC helped your util, then paying it off would have bumped up your overall util.

Paying collections doesn't help your score. But also paying off old, non-updating collections can actually hurt your FICO? Why? Because it hadn't updated in a while, the dates refresh to 2012 and that can cause an actualy score drop when it updates. YMMV on your credit and specifically which date updated. The only time your FICO will increase fater paying collections is when it is deleted. An updating collection to $0 won't help.

The judgment updating to $0 wouldn't have helped or hurt your FICO.

[sweetshell]

 So this is our situation, my middle credit score is 727 my husband is 620. We went to apply for FHA loan thinking our scores was good enough. Come to find out the bank needed my husband score to be 640. Anyways while they are going through the report they realized ALOT of mistakes on my husband’s credit report. He is the 2nd and his dad collection items reporting on his report, next his car he paid off two yrs ago reporting every month that it's not paid off, even though we have the title.  So our loan officer (great lady) said she can get a rapid rescore done, we provide all the paper work including the title, two letter from the credit union showing the car as paid off and that throughout the life of the loan he never missed a payment. It has been THREE weeks and all now we can't get the rescore, I email and call our lender EVERYDAY! As time is not on our side, fr last week Friday till now all we hear is that the CBS got one rescore back and waiting on the other two. This is so stressful I can't believe this process is taking so long. This not rapid AT ALL!! I feel so stress out and want to give up!

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[Abooger044]

Ok can anyone tell me honestly if my husbands score will go up? We had a rapid rescore done I think we paid off everything absolutely no debt now and no car payments nothing! We had good standings on all but one but had no credit cards and this was done in October and its January the following year now and nothing has changed on his report and the mortgage guy promises us at least a 50 point increase we can't even get a real credit card now because his credit is now like 565 and everything is still on it after we paid off 7000 dollars worth of debt. he sold his harley for a chance to buy us our first home, was it all for nothing? What can we do?