How to I improve my mortgage FICO scores for a FHA loan?

[Anonymous]

I am sharing a car with my teenagers.  I really want to buy a car but I'm weary of having my credit pulled.  I need a house more than another car.  I have gotten my FICO 8 scors up by 60+ points in the last two months but the mortgage scores are horrible and barley move. I've been doing some reading and I see that I should have at least two credit cards reporting zero and one reporting a balance, yes?  How much of a balance, 1-2%?  And will getting a car loan negativley affect my scores?  I've done the FICO simulator and it says no but that thing is never accurate. The only "baddies" I have are medical bills, but I'm in the processes of getting them removed.  I have two capital one credit cards each a 500 dollar credit limit.  I just asked for an increase on both.  One Barclays card, limit $1,000 up from 500.  I'm also a rider on my Mom's AMEX. I was at 83% cc usage, then 63% and when reports update it will be 11%. My FICO 8 scores are Equifax 581 Transunion 611 and Experian 597.  Mortgage scores are 498, 574, and 521.  All I want is a middle score of 580 for FHA.  What should I do? 

[Anonymous]

Do you have any installment loans? The best credit mix is to have at least 3 credit cards and one mostly paid off loan.

Ideal utilization is known as the AZEO technique where one card shows less than 8.9% use and all other cards report 0%. That doesn't mean you can't use you cards more than this, just pay off the balance before the statement cuts.

Finally, if possible you want at least 6 months of no hard pulls prior to a big credit purchase. A year is even better. Now in reality, life often gets in the way of this so do what you have to do for your family.

Good luck.

[Anonymous]

I have student loans. Those are installments right? Because I am in school they are not due but I pay on them anyway. All the credit score sites: MyFICO, credit karma, and credit Sesame, say I have an exceptional credit mix. I had a car loan but I just paid that off. Haven’t had a hard pull in almost a year.

Is AZEO only good for mortgage scores? Or will it increase all my scores? I’ve been reading that I should carry a Utilization rate of 1-2%. So that was my goal on all three of my credit cards. After reading some here, I paid off 2 credit cards to zero and was gonna leave the third at 1-2%. Problem is I have not control over the payment on the AMEX on which I’m a rider. Should I just remove myself from it? From what I can tell the limit on the AMEX IS 14,000. Maybe I should pay all my personal cards to zero and let the Amex report a balance?

[Anonymous]

Yeah student loans count. All utilization between 5$ and 8.9% is treated the same. How many cards do you have other than the AMEX? Is the AMEX your oldest account?

[Anonymous]

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@Anonymouswrote:

 I'm also a rider on my Mom's AMEX. I was at 83% cc usage, then 63% and when reports update it will be 11%. My FICO 8 scores are Equifax 581 Transunion 611 and Experian 597.  Mortgage scores are 498, 574, and 521.  All I want is a middle score of 580 for FHA.  What should I do? 

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When the 11% utilization reports, that should help.

[Anonymous]

AMEX is my newest credit card account. I was added in 2016 but my mom has had that card 20 years at least. I am pretty sure it has only been reporting for me since 2016. I have Quicksilver, Capital One Platinum, and Barclays since 2015.

[SouthJamaica]

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@Anonymouswrote:

I am sharing a car with my teenagers.  I really want to buy a car but I'm weary of having my credit pulled.  I need a house more than another car.  I have gotten my FICO 8 scors up by 60+ points in the last two months but the mortgage scores are horrible and barley move. I've been doing some reading and I see that I should have at least two credit cards reporting zero and one reporting a balance, yes?  How much of a balance, 1-2%?  And will getting a car loan negativley affect my scores?  I've done the FICO simulator and it says no but that thing is never accurate. The only "baddies" I have are medical bills, but I'm in the processes of getting them removed.  I have two capital one credit cards each a 500 dollar credit limit.  I just asked for an increase on both.  One Barclays card, limit $1,000 up from 500.  I'm also a rider on my Mom's AMEX. I was at 83% cc usage, then 63% and when reports update it will be 11%. My FICO 8 scores are Equifax 581 Transunion 611 and Experian 597.  Mortgage scores are 498, 574, and 521.  All I want is a middle score of 580 for FHA.  What should I do? 

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1. Congratulations on getting your scores up 60 points. No mean feat.

2. Do not apply for a car loan or any other credit before the mortgage closes.

3. Each month have 2 of your 3 cards report a zero balance, and 1 card report a small balance of 9% or less.

[Anonymous]

As long as you have 3 non-secure cards other than the AMEX and it's not your oldest, feel free to dump it.

What happened with the (SP?) CLI requests from Capital One? Make sure to ask for SP CLIs every 6 months or so.

What's the status of getting those baddies removed?

[Anonymous]

Capital One denied my CLI due to being over the limit and late in the past six months. And I’m working with Lexington law for the removals. Slowly but surely coming off. Thanks for all the advice.

[Anonymous]

Just an update in case anybody cares!  I closed on my house today less than 12 months since I wrote that post! Whoot Whoot.  I did Buy a car in March 2018.  I was going to go with NACA to buy a house but I ended up with a FHA loan.  I did have to close the Amex as someone had suggested.  The process was grueling but I now own a home!  Tip from me is; let you credit cards report between 1-10% each month.  This drove my scores up fast and when I didn't do this they dropped or stayed stagnant.