Let's See How High we Can go In 1.5 Yrs.

[Anonymous]

I am here because like many I want to make sure that my credit score does not **bleep** me out of a good rate on my first home.  I plan on buying a home in May of 2012 and need to maximize my score between now and then. 

Right now I am sitting at a 696, I have been as high as 750+.  My most detrimental areas are a high balance to limit ratio, a 30 day late in July 2010  (auto-pay did not work on a credit card), and a collections account that is listed as "KD" from 2005.

Accounts:

I have a Card with a $5500 limit, currently sitting at around $5200.  This has the 30day and was opened in 2004

I have a Banana Republic Card with my Fiance that has a $500 Limit, sitting at $300.

I have a $1000 line of credit at my bank.

$4400 left on a student loan.

$3000 left on a line of credit I used to buy an engagement ring.

I should be able to paydown everything but the student loan by this time next year, leaving just the student loan with a balance.

My first question, I am interested in the impact of opening a second card with a no-interest on balance transfers so I can save on interest while paying down the $5200.  What are your thoughts here? 

Also, on the collections account when should I expect that to fall off, the only date I see listed is 11/2005.

Thanks, looking forward to working on this!

[Anonymous]

The collection should drop at 7 years from DoFD.  If you pull your reports through annualcreditreport.com, you can find out the DoFD or drop-off date, depending on which report.  Other dates affiliated with that account, like date of last activity or date of assignment, aren't relevant to drop off date.  

Having 3 open revolving accounts is probably worth it, especially if you can do a no-fee balance transfer to a lower interest rate.  Perhaps it's a good idea to pay down the balances for a little bit first, but if you find an offer that meets your needs, I'd do it.  Also, I'd GW that late.

[larinoriani]

My two cents..

Transfer balances to a lower APR is always a win-win...if... you make the plan and pay it before the promotional rate expires. If not, you are just buying time, which in your case, you don't  have.

The problem with 0% BT offers is that usually they require higher scores, and it will be very hard to get approved for one with less than 720. You have high utilization, and this is 30% of your FICO, if you could make an effort and pay a big chunk on your $5200 balance, let's say about $2000- $2500 that would give your scores the increase that you need to get a 0% offer. Also, you need to do your research since some CCC don't like recent lates or collections.

Plan B:

Talk to your bank or CU, and see if if you could get approved for a personal loan, the rate won't be great, but it will be better than any revolving rate and since is an installment loan, you will be "forced" to pay it off  in less time (2-3 years) AND the most important part, the balance won't reflect on your revolving utilization, which will give you the necessary boost to qualify for prime rates on mortgage.

If none of the above work, your only option is PAY, PAY, PAY PAY, and PAY, as much as you two can on the CC balances, cut on extra expenses, don't buy cloth, don't buy shoes, don't eat out, don't go to the bars, don't go to the movies, just focus on paynig down the credit cards for the next 1 1/2 year, that's the only way you can get your UT down and your scores up.

Good luck!