66% total utilization down to 49% utilization.. positive????

[kashley6405]

I have been asking a ton of questions on here today; I keep asking because I have yet to figure out how to word what I am trying to say..... UNTIL NOW!  It hit me how to ask this...

Ok, trying to get approved for a home loan.  I needed 2 points.  I saw a drop from 647 to 638 in my credit score when I maxed out a credit card and paid off a collection debt from an old credit card (the collection account officialy appeard on my credit report as of March of this year, these two are not related to one another as far as debt goes.. as in I didn't use one to pay off the other or anything..)

So, I have been scraping together any money that I comfortably can to get my credit utilization down. 

I managed to bring the maxed out card down from 100% util. to 46% util with several payment this month.  They report to the brueau on the 18 of the month.  They are running my credit again on the 23rd.  This payment should reflect on my score since it had an immediate impact when it went over the limit last month.

My only other card is in "good" shape at 52% util.  Working on paying it down steadily, slowly but surely. 

Here is how I have been needing to word my question I think:

I know 50% total credit utilization is bad if you go from say 30% total credit utilization up to 50% and can have a negative impact on your score.  BUT, what if you go from 66% total credit utilization (what mine was with that card maxed) to 49% total credit utilization (which is where I now stand, just in time for the next credit report run).  Should that be a positive increase????  I just need 2 points!!  Just two points!!!!!!! 

[LS2982]

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@kashley6405 wrote:

I have been asking a ton of questions on here today; I keep asking because I have yet to figure out how to word what I am trying to say..... UNTIL NOW!  It hit me how to ask this...

Ok, trying to get approved for a home loan.  I needed 2 points.  I saw a drop from 647 to 638 in my credit score when I maxed out a credit card and paid off a collection debt from an old credit card (the collection account officialy appeard on my credit report as of March of this year, these two are not related to one another as far as debt goes.. as in I didn't use one to pay off the other or anything..)

So, I have been scraping together any money that I comfortably can to get my credit utilization down. 

I managed to bring the maxed out card down from 100% util. to 46% util with several payment this month.  They report to the brueau on the 18 of the month.  They are running my credit again on the 23rd.  This payment should reflect on my score since it had an immediate impact when it went over the limit last month.

My only other card is in "good" shape at 52% util.  Working on paying it down steadily, slowly but surely. 

Here is how I have been needing to word my question I think:

I know 50% total credit utilization is bad if you go from say 30% total credit utilization up to 50% and can have a negative impact on your score.  BUT, what if you go from 66% total credit utilization (what mine was with that card maxed) to 49% total credit utilization (which is where I now stand, just in time for the next credit report run).  Should that be a positive increase????  I just need 2 points!!  Just two points!!!!!!! 

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You shoul be able to get 2 point from that hopefully!! Good luck!!

[Revelate]

Going to move this thread, but you'll probably bounce back up to 647 again by paying down the maxxed out card at a swag, assuming you're at the same or lower utilization rate than you were previously.

It's not 1:1, but I went from 660 -> 646 -> 660 again almost wholly by maxxing out a 1K tradeline and then paying it down, think my utilization was 13% at that time.  Trying it again with a 3K maxxed limit now for giggles to see what the difference is this month.

I think you'll be OK honestly; in general the more you pay down your cards the better, but only needing to hit 640 think you'll have that done.

[kashley6405]

Thank you all so so much.  My stomach is in KNOTS and I swear I will have ulcers before this house process is over.

I tried so very hard to get my score up.  Worked for a year!  Got it up where it needed to be, got pre-approved in January with a 647 and started house shopping.  Once we found a place and put a contract on it, we went back to the bank to get everything started.  Since it was past 90 days, we had to run credit again. 

BAM!  Biggest dissapointment I have had in a LONG LONG time.  I started crying right there

All my hard work, all the fighting about finding the perfect house and then it all went down the crapper for 2 points.  The only negative things we could see that may have impacted it was that collection account finally appearing on there as close and paid and that card being maxed out which it has always had a high utilization but never maxed out continuously. 

I so hope this effort works.  It is just two points!  I would think from everything I have read that lowering my overall utilization by nearly 20% should have some kind of positive impact. 

[MonkeyBelly]

Personally if I were in your shoes I wouldn't risk it. I would pay that card down under 20% (or better yet under 9%) before it reports. 

[kashley6405]

Well yes that would be ideal.  However, I have used every bit of funds that I have to pay it down that much.  I cannot spare another dime

We have a toddler too so I cannot risk paying more and cutting it too close for groceries or bills or anything.  If it was just my husband and I then I would be ok with cutting it too close for comfort because we could live on peanut butter and jelly for the next month but not with our kid.

I have done all that I can.  I feel positive that we will get the two points I need.  I hope anyhow.

[ABuckNow]

Not trying to get in your business too much - but should you maybe re-think your financial situation?

If money is really that tight (all I know is just what you've typed in this thread...), with high card balances, and an upcoming mortgage, all the un-forseen expenses with a new or used home, and with a kid involved...red flag waving very vigorously.

It's easy to get swept away in the thrill of looking/finding a home...ask yourself - do you have emergency funds available?

I hope your LO/UW doesn't know the details of your situation - if they do and proceed anyway...

Slow down, take a breath, there will always be houses available.

Best of luck.

[kashley6405]

Thank you for your concern.
We are financially ok as in money in the pocket/bank. I had some financial hardships in the past but have worked vigorously to repair them and we are well on the mend. I just made nearly $600 payments on my credit cards and that is all we can afford right now yes, and still remain comfortable.
Yes, we do have a reserve for emergencies which will be saved for just that.
I only have 2 credit cards which are both in good shape (now) and i fully believe we can take on the house payment seeing as it will be CHEAPER than what we are paying in rent st the present time.
I have thought this through, when we got the green light on the loan i did not know the kind of result a high balance/maxed balance could have on your credit report. I obviously do now and have done Everything I can to fix it.
My lender does know our situation.

[llecs]

If util is listed as a top negative reason (you can find these on your tri-merge report...shows the top 4 things that hurt the most), then I bet you'll get those 2 and then some.

[tcbofade]

None of us are exactly sure where the "lines" are, but BOTH reducing your overall util AND paying down one CC so that it is under 90% will have positive affects on your credit score.

Even if it's only ONE point for each of those things, there's the two points that you need!

(...and I'm pretty certain that it will be more than two!)