Keeping 3 new cards nearly max while cleaning report

[Anonymous]

Hi everyone,

     So since I took a look at my report in about September, I have been really at it cleaning up my reports for a home purchase (conventional home loan) in April. This is what my report looked like back then:

4-5 collection accounts (I say 4 or 5, since not all were on each credit report)

3 old student loans that were late 120 days

A judgement from 2009

My credit scores ranged from low to high 500's

Since then, I have added 2 capital one credit cards and a victorias secret since I had no revolving credit. I also cleaned up my report (paid, and deleted)and now have:

The judgement from 2009 reporting on 2 credit reports (will have it vacated in January)

One paid collections account that should hopefully be deleted this month

2  paid 120 day late accounts from old college (lates occured 2011) - I'm debating deleting these, as they add to my average age of accounts.

My credit scores are now ranging from low to mid 600's.

My questions -

1) I have purposefully allowed my 3 credit cards to report high balaces at statement, as I'm hoping that by January, when I have the judgement and collection deleted, I should get a boost. Then, I should get another big boost after by allowing 2 cc's to report 0 and the other 9%. Is this a good strategy to reach the 700's?

2) Also, is it better to allow the late accounts to stay to help with my aaoa? They are my 2 oldest accounts.

Thank you for any help.

[Lemmus]

...if your intent is to garden until it is time for your mortgage, then keeping high balances until a few months before applying for a mortgage will not be detrimental to your mortgage scores ...as long as you optimize them in time to ensure they report before your lender pulls your CRAs.

...otoh, keeping high balances may negatively affect your ability to get new cards or CLIs and will definitely lower your scores in the interim.

...negative CLs on your reports count significantly more against you than does AAoA ...but in your case you would appear to have a VERY short credit history without the student debts and that is normally a red flag to lenders ...on balance I'd choose to get rid of the negatives and be prepared to show other positive history to the mortgage underwriters ...but I expect others here may differ ...que sera sera 

[Anonymous]

Let me clarify:

1) Those old student loans began reporting in 2006 and 2009, but show 120 day lates in 2011. I mistakenly allowed old positive student loan accounts from 2004 to be deleted by transunion, so these are my oldest (but negative) accounts on transunion. The equifax and experian have the positive 2004 closed student loans (so aaoa isn't a concern there).

2) I don't intend to seek anymore credit between now and applying for a mortgage.

[Anonymous]

Anyone that has advice??

[Anonymous]

Bump.

[Anonymous]

Bumpity bump?

[Lemmus]

Bumpity bump bump 

[SunriseEarth]

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@Anonymous wrote:

Anyone that has advice??

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You may have overlooked the previous post from another member, but I would mainly agree.

AAoA is 10% of your FICO score, whereas payment history is 35% of it.   While a deleted TL may drop your AAoA, it might be worth it if you payment history improves.

Also, I think purposely keeping high balances just for the sake of seeing a bigger jump later isn't a good idea, especially if you're accruing interest.   Remember that your FICO score is a snapshot of your credit at a given moment in time.  FICO has no memory, so there's no need to plan on a cumulative effect.   

[Anonymous]

Thank you for the replies.

I said previously that I was allowing high balances to report at statement. I always pay balances in full before the due date.

Anyway, thanks for the replies. I'll try my theory out, and let everyone know the outcome by February.

[Anonymous]

Lemmus said "but in your case you would appear to have a VERY short credit history without the student debts and that is normally a red flag to lenders". Although this is incorrect and not the case for me, how would this be a red flag??? I have seen others get a mortgage loan with just 2 years of credit history, and no "alternative trade line" documentation.