Ok here is my story: My wife and I are in the process of building a condo and have been talking with several loan officers. My scores are all above 620 so that isn't the problem. I am trying to up my score however to get a better rate. We are going VA. I have 5 CC's that carry balances. 3 are "maxed out". And I will pay off a Best Buy credit card in full, which currently has a balance of $275 with a CL of $600 I am planning on paying these down to 70% UTI. I also have an installment loan with a monthly payment of 115.00 with around 6 payments left. This will be paid off before we go through with the final loan app. I have three other installment loans (2 auto, 1 personal loan). By doing all of this will I see a dramatic increase in my scores or would the money be better spent somewhere else in the homebuying process?
Starting Score:TransUnion: 698 (12 FEB 2010), Equifax: 674 (12 FEB 2010)
madmann26 wrote:Get your revolving credit util down. That is what is hurting your scores the most right now. If you get the util down to under 30% (9% ideally), you should see a nice bump. The installment loans don't hold near the weight that revolving does.
+1
UTIL means revolvers weigh heavily. Installment loans keep your credit mix in check, age nicely, and factor into DTI during UW, but that's about it. Unless of course it has a negative history...
Also, high balance on CC means high minimum payments, which factors into DTI.
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