I need some advice/input on my current situation. I'm planning on applying for a mortgage in the next couple of months but I'm afraid USDA will not approve me based on my current credit standing. My current FICO score is 623 (EQ)/630 (TU). I have two CA (both are paid) but one is less than 6 months old. I have installment (17%) and revolving (21%) accounts. Total utilization is 19%. I am working to get my utilization down to 9% or less on the revolving accounts. Do you guys think this will help my score? Any ideas on whether or not the recent collection will keep me from being approved?
the collection will be dependent upon the lender. if you take your utilization down it will help. Not sure how much though. If you have enough time maybe you can PFD on the collections (also if you have the money). I'm doing a USDA and we're completely ignoring my collections.
USDA and FHA loans typically require no lates, collections, etc, within the last 12 months. Your utilization is already fairly low, so I don't think you'll see big score increase by paying the revolving accounts down. The recent collection is what's really lowering your score.