04-02-2012 10:07 AM - last edited on 04-02-2012 10:12 AM by MarineVietVet
So I just joined this wonderful forum last month and have already learned so much. I will share my journey to refinace our home. I applied last month and was approved by two lenders to refinace our home. Good news, right? Well, interest rate from both were 5.5%, with pretty hefty closing costs. Current rate on mortgage is 6.75%. Although definitely an improvement, I was pretty disappointed with the rate given the historical lows. Both lenders reported credit issues as the reason.
That prompted me to seek out this fourm(which I had done this a year ago). I pulled all three CR's and this is what I've got; Fico scores EQ-665, EQ 651, TU-681. Goal 720 Open accounts; Mortgage 195k-opened 1997-no lates Capital one visa-2400/2700 no lates BOA visa-950/1000 no lates Paypal950/1100 no lates Beneficial loan 14600/14900 no lates About 10 misc accoutns(old store credit cards , no balance and closed over last 5-7 years, no lates)
First thing I'm sure you notice is my high utilization- over 95% Collection accounts; 2dental bills with receivable recovery from 2008-one says paid, the other balance $114 Judgement-may 2005 is showing balance of $993, but was paid in full in 2005 Collection from above- may 2005 - showing paid in full Wells Fargo auto-2/2004-6/2010, showing 3 lates in 2010 paid off Santander car loan 5/2005-1/2011 showing one late 3/2010 paid off What I have done thus far. I know many of you will cringe at my first step, but bear with me, I can explain. I took out 17k from my profit sharing and paid all my balances on open cards to less than $100 each. I know this should be a last resort and is not typically recommended.
The loan I had with benefiicial was a sub prime loan of 17800 due to emergency opened in 2006. I pay $296 a month and in 6 years,it has only gone done by 3500.00. It is really putting a dent in my score due to high utilization and makes me nauseous each month i look at the interest charges (about $281) after speaking with several bankers (who called beneficial legal loan sharks) I decided to take this loan. Loan i got from profit sharing is interest free and I am paying $300 per month. I have also sent GW letters to Santamdar and Wells Fargo to remove late payments. I have sent a PTD letter to REceivable Recovery for dental bills. I disputed through CRA's the judgement as it is listed as pending. Although a month early, I asked it to be removed as obsolete.
Havent heard back from anyone yet, but it's only been two weeks. If anyone can think of anything else I should do, or advise or next steps, please let me know. I am crossing my fingers that I will get a big bump from large pay off of balances and some luck getting some items removed quickly before interest rayes go up.
04-02-2012 06:36 PM
From what I have learned 35% of your credit score is based upon your utilization, which you should get a good bump due to reducing your UTL to less than 9%.
It may take a couple months to boost your score but tackle one thing at a time... I also recommend using the FICO estimator on here... You can play with what will boost your score the most.
myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.>> About myFICO