Fixing FICO scores for home purchase?

[grayfox11]

Long time lurker, question about fixing scores for a home purchase. Scores are:

EQ: 613

TR: 614

EX: 603

Balances are:

GE Finance: $1414

Merrick: $0

Amex Zync: $1000

Barclays Finance: $1969

Capital One Plat: $1950

Capital One QS: $2490

BankAmericard: $2044

Toyota: $23,300

Living at home so I'm paying these off as fast as possible, getting married next fall, suggestions on best way to get my scores up?

[vanillabean]

Congratulations! Are you planning on keeping the mortgage and finances shared or separate?

[grayfox11]

Thanks! shared. Joint accts, cards, etc.

[pizzadude]

Can you share any of the negative / derogatory information on your reports?   Cleaning that up would ( in addition to paying down revolving debt ) be one the fastest ways to move your FICO score higher.

[grayfox11]

Sure, for each specific card? In general, there's this:

-You have a serious delinquency (60 days past due or greater) or a derogatory description on your credit report.

-You have one or more accounts showing missed payments or derogatory descriptions.

-You've made heavy use of your available revolving credit. (75%)

-You recently missed a payment or had a derogatory indicator reported on your credit report. (4 months ago)

At home at my parents right now so I'm paying down all this stuff rapidly, bad choices after college. Would you guys want individual derogatories?

[pizzadude]

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@grayfox11 wrote:

Sure, for each specific card? In general, there's this:

-You have a serious delinquency (60 days past due or greater) or a derogatory description on your credit report.

-You have one or more accounts showing missed payments or derogatory descriptions.

-You've made heavy use of your available revolving credit. (75%)

-You recently missed a payment or had a derogatory indicator reported on your credit report. (4 months ago)

At home at my parents right now so I'm paying down all this stuff rapidly, bad choices after college. Would you guys want individual derogatories?

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I would start paying down balances ( which you are already doing ) and also trying to send GW to request late payments to be removed.    Are any of your accounts charged~off or just late pays?

[CreditDunce]

1) Pay in full for all of your credit cards.  Let a small balance report on one of the CC's.   You are currently maxed out. 

2) What is your Amex MSD?  If it is several years old, consider App'g for another Amex in January after you have paid off all of your other CC's.   Otherwise, I would avoid applying for any additional credit.  Try to limit any HP.  Note, pay down your debt before thinking about applying for another Amex card.

3) Utilization for installment loans is not counted as heavily as revolvers.  Therefore, concentrate on paying of your CC's first.  However, it is critical that you always pay on time for everything.

4) Debt to income is very important when applying for a mortgage.  Ideally, you want one open installment loan that is almost paid off when applying for a mortgage.

5) If you have family members with a pristine, aged CC, see if they are willing to add you as an AU.   It may or may not help, but it is worth a try if planning on applying for a mortgage.

6) Talk with your fiance about credit, money, etc.  Both of you should be working on your credit now. 

7) Read in the rebuilding forum.  See if there are any options for gw, etc to have the baddies removed.  They have a major effect on your score.

[grayfox11]

1. Will do, that's my priority right now, I'll leave the small balance on the Barclay since the APR is the lowest.

2. MSD? Sorry I don't know the term but I'm guessing it's when I got the card? It's been open since 2007. And ok, got it, they've treated me well.

3. Right now I'm just paying the minimum payment for the car loan so no problem

4. By next year I should be close to paying the car off, if I ramp up payments after cc's are paid

5. I will try that, good idea

6. She has pretty pristine credit BUT that's because she's on her parent's CC's as an AU, had her car bought for her, no student loans, etc. Doesn't have a job yet so she's currently looking and will then start to build up a savings rapidly with 0 debt

7. Ok I will check that out, thanks, I definitely want to try the gw option if that's available

[CreditDunce]

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@grayfox11 wrote:

1. Will do, that's my priority right now, I'll leave the small balance on the Barclay since the APR is the lowest.

Yes, high interest CC's should be your priority.   If you pay in full each month you will not have any interest payments.  Long term you just need to pay all of your credit cards in full, every month.

However, to maximize your credit score right before applying for a mortgage, only let one card report a small balance.  You may need to pay all of the other credit cards before their statement cuts.

2. MSD? Sorry I don't know the term but I'm guessing it's when I got the card? It's been open since 2007. And ok, got it, they've treated me well.

If you get another card from Amex, it will report using the current month and the year of your Member Since Date.  Assuming your first Amex was from 2007, if you get another card in January 2015, it will show up on your credit reports as from January 2007.   This can help your AAoA and may boost your credit score.  On the minus, any LO will know about Amex policy and may discount it.  Moreover, you still take the INQ/HP.

3. Right now I'm just paying the minimum payment for the car loan so no problem

4. By next year I should be close to paying the car off, if I ramp up payments after cc's are paid

Excellent.   Note, your score may take a small hit if you don't have any open installment loans. However, this will vary depending on the FICO model used. 

5. I will try that, good idea

6. She has pretty pristine credit BUT that's because she's on her parent's CC's as an AU, had her car bought for her, no student loans, etc. Doesn't have a job yet so she's currently looking and will then start to build up a savings rapidly with 0 debt

Pristine credit is not necessarily good credit.   If she doesn't have any credit in her own name, she should consider establishing it.  Her AU accounts may or may not be factored in when applying for new credit (CC's, Mortgage, etc).

7. Ok I will check that out, thanks, I definitely want to try the gw option if that's available

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Good Luck

[grayfox11]

Helpful info, thanks. Also of note, Discover closed my IT card and it has a $12 balance right now but it will report $0 in a few days, which I'm sure will help my score a tad.