@Anonymous wrote:I had $8500 in credit card debt . I just paid off $6900 of it on January 30th. I have been getting alerts that my balances have updates but the scores are only going up a few points . When I did the simulator before I paid anything off it showed all three scores going up 85-90 points . I am waiting for the score increase to apply for a mortgage for a house we REALLY want to buy . Anyone know why it's updating balances but the score is hardly moving ? Thank you
I also would expect a much bigger bounce in your FICO 8 scores from such a healthy reduction in utilization. I have a feeling that you will see those bounces, and that it's just a matter of timing.... probably some but not all of the balance changes have reported.
Meanwhile, as CGID aptly points out, your FICO 8 score is rarely used in mortgage determinations, and your mortgage scores are the key ones for your mortgage application. So you should probably wait until all the accounts on which you have made the big payments are reported, and then pull a 3B report to see where your mortgage scores are. I have a hunch you'll be pleasantly surprised.
@dragonfly66 wrote:
@Anonymous wrote:One thing I note is that our OP (txGal) and our friend DragonFly are both looking at alert driven FICO 8 scores. But what they are looking to buy is a home, which uses a different set of (much older) scoring models.
If both of their concerns are practical -- namely wanting practicial best steps for altering their CC balances in preparation for a mortgage -- then the best path is really simple:
(1) Create as many $0 CC balances as they can. Once they have created that balance, stop using that card.
note: be sure to have one CC reporting a positive blance.
(2) Make sure all cards are paid down to under 29%
(3) Try to get their total utilization to < 8.99%. If it is financially feasible, just make it a $10 balance on one card with all other cards $0.
With the one card that reports a positive balance, make sure that the card:
(a) is a true credit card, not a charge card
(b) is a card in your name, not an AU card
(c) has a balance of at least $5
(d) has a credit limit of < 29k
The mortgage models have been shown to respond really well to this 3-prong approach. A huge amount of test data from the last 10+ years shows this.
To recap, it's:
All cards at $0, except one with about $10
Once they are certain that all three bureaus have the fully updated CC balances, they should ull their mortgage scores, not their FICO 8's.
And if they have derogs, then yes they should at the same time be working hard on getting those removed. The mortgage models are especially punitive with derogs.
Credit Karma is a great free tool that will give you weekly EQ and TU reports (with brand new data). It's great for trying to determine when the bureaus have updated CC balances or removed derogs.
Thanks for the info, CGID. That was definitely helpful. I am aware of the difference in FICO mortgage scores vs. FICO8. I was focusing on the FICO8 scores just because the alerts tell you what caused the movement, for the most part. I realize they don't take into account certain things like accounts dropping off your file, etc., but they can offer some insight as to what moves the needle when it comes to the scores. I wish they had alerts for the mortgage scores.
Not so. The score movement and alert are usually unrelated.
@dragonfly66 wrote:
@SouthJamaica wrote:
@dragonfly66 wrote:
@Anonymous wrote:One thing I note is that our OP (txGal) and our friend DragonFly are both looking at alert driven FICO 8 scores. But what they are looking to buy is a home, which uses a different set of (much older) scoring models.
If both of their concerns are practical -- namely wanting practicial best steps for altering their CC balances in preparation for a mortgage -- then the best path is really simple:
(1) Create as many $0 CC balances as they can. Once they have created that balance, stop using that card.
note: be sure to have one CC reporting a positive blance.
(2) Make sure all cards are paid down to under 29%
(3) Try to get their total utilization to < 8.99%. If it is financially feasible, just make it a $10 balance on one card with all other cards $0.
With the one card that reports a positive balance, make sure that the card:
(a) is a true credit card, not a charge card
(b) is a card in your name, not an AU card
(c) has a balance of at least $5
(d) has a credit limit of < 29k
The mortgage models have been shown to respond really well to this 3-prong approach. A huge amount of test data from the last 10+ years shows this.
To recap, it's:
All cards at $0, except one with about $10
Once they are certain that all three bureaus have the fully updated CC balances, they should ull their mortgage scores, not their FICO 8's.
And if they have derogs, then yes they should at the same time be working hard on getting those removed. The mortgage models are especially punitive with derogs.
Credit Karma is a great free tool that will give you weekly EQ and TU reports (with brand new data). It's great for trying to determine when the bureaus have updated CC balances or removed derogs.
Thanks for the info, CGID. That was definitely helpful. I am aware of the difference in FICO mortgage scores vs. FICO8. I was focusing on the FICO8 scores just because the alerts tell you what caused the movement, for the most part. I realize they don't take into account certain things like accounts dropping off your file, etc., but they can offer some insight as to what moves the needle when it comes to the scores. I wish they had alerts for the mortgage scores.
Not so. The score movement and alert are usually unrelated.
So if you get an alert that your utilization has dropped and your score has gone up 7 points (because they are usually contained in the same alert), you're saying that's really not why your score increased?
Yes that is what I'm saying.
(But that particular example wouldn't happen since there are no alerts referring to utilization.)
If you got an alert saying your balances dropped from $4500 to $1000, and it was accompanied by a reference to your score going up 7 points, the drop in balances might well be related to the increase in score, or might not be, but you will never know. You could just as easily get an alert saying your balance on a card increased from $53 to $103, and your score increased 7 points.
I'm not sure I understand what you mean.