4-5 months to improve Credit Score before trying to buy a home (2 years post CH7 BK)

[Anonymous]

Any tips on what I can do to improve my FICO score?

I'm looking to buy a house in the summer (July of August, 2 years after BK Ch7 Discharged 7/2013, and looks like I could get a better rate if I had a score > 700. I look to be close from FAKO score.

From the forums it looks like I would be better if I had 3 or more revolving accounts, but at this point with applying for mortgage in 4-5 months, not sure if that would hurt my score more by opening new accounts.

Any thoughts on if another revolving credit card or 2 would help or hurt my score 4-5 months from now?

The only action I think I can make is to open another secured credit rebuilder loan from my Credit Union, and just continue to make all payments on time. And to have one report as 0% and the other card at < 10% utilization.

I've already checked my credit report, and the BK is reporting properly on all accounts, I had to do a couple disputes, but was able to take care of that already.

Any other ideas?

here is what I've done so far to repair my credit:

Opened 2 revolving accounts, and all payments made on time and < 30% utilization.

Capital One (unsecured) - opened 10/2013 original $1000, current $2000 limit
Merrick Bank (secured) - opened 11/2013 original $500, current $1000 limit (Increased was unsecured)

had 1 other account which did not get closed inthe BK.

Kohs/Capital One (Store Card) - opened 05/2009,not included in the BK, $1500 limit

And did a secured personal loan from my local CU which reported to all 3 bureuas.

Secured Personal Loan (credit rebuilder) opened 12/2013, closed 8/2014 for $1000

Costco Identity Guard (CreditXpert, FAKO)
EQ: 686 EX:681 TU:700

[CH-7-Mission-Accomplished]

You need to order your actual FICO 04 scores from this website.  It's about $20 per CRA but they will show you not only FICO 08 but also 04s and auto scores, etc.

For most people the FICO 04 is much lower than their FICO 08 scores.  FICO 04 is harder on bad credit 24 months prior.

FAKO scores iike you are reviewing are completely worthless.  They can be off by 100 or more points from your true FICO scores.  They tend to show higher scores than your real FICOs.

Rather than try to get your scores up to 700, you should find out if they are actually at 650 FICO 04 right now.

It is a bad idea generally to open new credit within 6 months of apping for a mortgage.

[Anonymous]

I would suggesting signing up for myFico score monitoring until you get your mortgage.  That way you'll know exactly where your scores stand at any time.  IMO, it's $25 per month well spent.

[Anonymous]

Ok, well the last time I bought a home, Costco Identity Guard was within 10 points of the FICO score the lender told me but that was a long time ago, and not sure if they used CreditXpert at the time. And its only $7.99 a month as well for monthly 3 credit bureaus scores (about 1/3 of the MyFICO price).

But yes I agree knowing my FICO would be worth it.

Trying to decide if I should do the one time scores, or the monthly subscription (24.95 a month option).

But getting back to advice to improve my score,  the Secured Personal Loan doesnt cause an inquiry on my credit report, so I think that could only help my score to give my report a mix of revolving and installment accounts.  or would you consider that a loan as well with the 6 month guideline a "no-no" as well?

[gdale6]

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@Anonymous wrote:

Ok, well the last time I bought a home, Costco Identity Guard was within 10 points of the FICO score the lender told me but that was a long time ago, and not sure if they used CreditXpert at the time. And its only $7.99 a month as well for monthly 3 credit bureaus scores (about 1/3 of the MyFICO price).

But yes I agree knowing my FICO would be worth it.

Trying to decide if I should do the one time scores, or the monthly subscription (24.95 a month option).

But getting back to advice to improve my score,  the Secured Personal Loan doesnt cause an inquiry on my credit report, so I think that could only help my score to give my report a mix of revolving and installment accounts.  or would you consider that a loan as well with the 6 month guideline a "no-no" as well?

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0 new credit within 6 months of a mortgage pull even if its secured and no inquiry, you will take a FIco hit for the new account reporting. Welcome to My Fico

[Anonymous]

Ok I just signed up to the $24.95 monthly subscription.

EQ FICO 8 - 654

EQ FICO 5 - 687 (Mortgage Lending)

TU FICO 8 - 632

TU FICO4 - 695 (Mortgage Lending)

EX FICO 8 - 660

EX FICO 2 - 686 (Mortgage Lending)

Interesting that the mortgage lending ones are higher in my case.  Looks like there is a good chance it could be over 700 in 4-5 months.  Also quite interesting how close these are to my FAKOs (EQ 686, TU 700, EX 681, within 5 points for each one.  pretty good IMO).

Any advice based on this?

[CH-7-Mission-Accomplished]

Those are great socres!

Question:  I assume you are going FHA since you can't get a conventional loan until 4 years post chapter 7.  And assuming you are going FHA, do you get any benefit for having a middle score above 680?  I don't think you do but I will let others with more knowledge chime in.

You should be sitting pretty with those scores!

[Anonymous]

Thanks, It was actually higher than I thought it would be as well.

I'm actually hoping to qualify for a Fannie/Freddie conventional loan with 20% down, I understand its possible to qualify after 2 years with a hardship exception (There were high medical bills which contributed to the Ch.7).  I'm actually a CH7 BK and Foreclosure combo (Foreclosure happened after the BK but mortgage was included in the discharge). FHA would be my fallback option.

This is where I found that the 2 year waiting period would apply (with hardship exception):

https://www.fanniemae.com/content/guide/selling/b3/5.3/07.html

Originally I was thinking FHA would be my best option, but with the changes to FHA program, to require the Mortgage Insurance for the life of the loan (and I'm in a high COL area, San Francisco Bay area, where the homes are 600k in the less desirable East Bay, that FHA insurance is an extra $500 a month, and pushes that 600k house to no longer be affordable. (its just barely affordable as is).  I hope I dont have to wait out the 4 years, as then the 600k house will cost 700k, and I wouldnt be able to afford it either.  Rents going up 10% a year here so I'm worried about getting priced out of the Bay area.