Going from 30% util to 45% util -- effect on FICOs?

[GFer]

HTSU: I believe the tiers that Marty is referring to are the mortgage rate tiers.

Wonderin:

"Right now, I'm paranoid about the lender (CountryWide) seeing so much money traveling out of our accounts."

I don't think any lender is going to frown on you paying your bills!   And really the diff between 30-45% isn't really that significant. I know you're nervous---that truely is normal! But I don't think you have anything to worry about.

And yes; I do agree that that the realtor was giving you a heads up about not opening any new lines and such. That's normal too.

[marty56]

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@Anonymous wrote:
Yep, I'm just paranoid, I'm sure. But that's me!! If I wasn't paranoid about all of this, I'd not have a pulse!!

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I some ways I have become FICO poor.  I worry so much about my score that sometimes I am afraid to do anything for fear it will lower my FICO score even temporary.

In the case of buying a new home, if you take a score hit in the processs, so be it.  No point in having a high FICO score if you cant do anything with it.

Message Edited by marty56 on 01-05-2009 03:10 AM

[haulingthescoreup]

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GFer wrote:

HTSU: I believe the tiers that Marty is referring to are the mortgage rate tiers.

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He might have been, but I was talking about the util tiers that appear to exist. We've induced their existence and their possible ranges from members' reports of score changes, or lack of changes, as their util changes from one specific figure to another.

[marty56]

I was talking mortgage tiers since say 660 over 659 would get a very different interest rate and thus montly payment.

[Anonymous]

I lost 25 for going from 24% util to 34%.  Nothing else changed on my reports but my util.  

Suck.   

[Anonymous]

Remember, mortgage lenders look at DTI ratios, which is probably more inportant than your CC Util. How does the increased debt change that?

My thoughts (which I will do my best to put into action when I buy a house, hopefully sometime this year) are that since the mortgage lender could pull a new credit report any time up until the loan goes through, don't risk losing everything you've already put into the house: let that new report they pull be the same as, or better than, the one they pulled when they (pre-)approved you. In this economy, who knows what might make them decide to decline the loan!

Oh, and pay off that $4 balance on the one card. Who leaves $4 on a card?

[ocheosa]

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@Anonymous wrote:
Remember, mortgage lenders look at DTI ratios, which is probably more inportant than your CC Util. How does the increased debt change that?

My thoughts (which I will do my best to put into action when I buy a house, hopefully sometime this year) are that since the mortgage lender could pull a new credit report any time up until the loan goes through, don't risk losing everything you've already put into the house: let that new report they pull be the same as, or better than, the one they pulled when they (pre-)approved you. In this economy, who knows what might make them decide to decline the loan!

Oh, and pay off that $4 balance on the one card. Who leaves $4 on a card?

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Great advice Mike14!

Wonderin -

First, I would pay down the first 3 cards ($4, 50 and 400) to zero balances. $450 withdrawn you’re your bank account is not going to make a bit of difference. As Mike14 said, the bank is more concerned with your debt ratio and LTV.

Second, the bank will indeed pull another credit report when the loan docs go to underwriting. The initial report is used by your loan officer for loan shopping. Third, it is equally important that you have at least a minimum of 3 months reserves in the bank.  

Good luck in the purchase of your new home!!

Message Edited by ocheosa on 01-04-2009 07:27 PM

[Anonymous]

Well, I went ahead and paid all of his cards to within 22% util. Hopefully, going from 36% to 22% (a couple even less than that) will do us some good FICO score-wise.

WaMu: $650/$2500 (will probably pay this down some more -- probably down to $400 -- if I do, that would put his util @ 15.5%)
Wal*Mart: $0/$400
Orchard: $0/$300
Cap One: $250/$1000

Do ya'll think that would be good for some major points increase?

Once we close, I'll pay MY cards down, too. Right now, I've just been throwing obscene amounts of money at HIS for the FICO points!!

Thanks, guys!!!

[Junejer]

Hi Wonderin, whether or not the FICO increases depends upon whether or not the CCCs report to the CRAs before you close. Also, remember that not every lender will pull again before closing. I have had several closings within the past year and none of the mortgage lenders have pulled again before closing, so YMMV there. If you do have a lender who will pull a second time, then Rapid Rescore might be in order if the CCCs don't report in time.

GL

[Anonymous]

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@Junejer wrote:
Hi Wonderin, whether or not the FICO increases depends upon whether or not the CCCs report to the CRAs before you close. Also, remember that not every lender will pull again before closing. I have had several closings within the past year and none of the mortgage lenders have pulled again before closing, so YMMV there. If you do have a lender who will pull a second time, then Rapid Rescore might be in order if the CCCs don't report in time.

GL

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Yeah, I know they might not pull. But with MY luck, they'd pull if I HADN'T have paid them down from 45%!! I'm just being paranoid, I know. But at this point, I feel like the only thing I can really "control" throughout the whole mortgage loan process is our util, you know? (Can you sense the fear and desperation, LOL?!)

Besides, the last thing I want to do with a shiny, brand new mortgage is start out living there deep, deep in debt! 'Cause we'll probably GO in debt furnishing it and painting the walls!!

But, really, if I've learned ANYTHING here from you guys, it's how to know when the CCs report!! You guys have taught me so well, I can recite the dates in my sleep! WaMu reports on the 9th, Wal*Mart on the 19th, Orchard on the last biz day of the month, and Cap One on the 15th.

While Wal*Mart and Orchard shouldn't report before we close, I figure if for some (horrible) reason we don't close on the 20th and instead close a bit later, we'll still be covered when they DO report!!

But honestly, you guys have really taught me well:

1) PIF

2) PIF

3) If you can't PIF, pay as much as you can, ON TIME!! And for Pete's sake, do it BEFORE they report to the CRAs!!

4) If you reach 40% util or over, chain yourself to a large, heavy object and STOP SPENDING!! (that one was REALLY hard to learn).

5) If Number 4 fails, break fingers. Broken fingers = no internet shopping, no driving, no SPENDING!

 

Believe me, when ya'll talk, I listen!! I'd be absolutely stupid not to. It's because of ya'll that DH's scores have risen over 100 points in the last few months!! It's 'cause of ya'll that we're able to buy a home in the first place!!