Increasing FICO for mortgage

[hautemama]

Currently my fico is 666 and interest rate will be 4.25% I am currently paying down all credit card balances to 30%... Will this make a huge or only minimal difference? I was told I should do at least 20%.... For a big jump of 20 points etc. Please help!

[gdale6]

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@hautemama wrote:
Currently my fico is 666 and interest rate will be 4.25% I am currently paying down all credit card balances to 30%... Will this make a huge or only minimal difference? I was told I should do at least 20%.... For a big jump of 20 points etc. Please help!

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What percentage are they at now?  How many cards with balances ?

[hautemama]

I have a Nordstrom, discover and Amazon credit card that was about 50% now I paid down to 30% for new re score.

I have a closed Bank of America card that I paid to 0 balance and amex gold paid to 0 balance, first rescore went fm 659 to 666 bc I paid those (b of a and amex)

Also have gap card, merrick that were already at 30%
Please help!!!

[hautemama]

Also have amex Costco that is less than 30%. I need to make changes asap. How high can I make my score??

[hautemama]

If I get to 680 I will get it to 4.125 but trying to get as high as possible. What do you think? Not sure when the next decrease will be and what my credit score needs to be for that. Anyone?

[MarineVietVet]

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@hautemama wrote:
Also have amex Costco that is less than 30%. I need to make changes asap. How high can I make my score??

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It's impossible IMO for anyone to make an accurate estimate but you defonitely can tweak your scores by properly managing yor revolving utilization.

Everyone's situation is different and there is no one size fits all approach to this and therefore no "ideal" number but what seems to work well for most people is to have only one of their cards report a small (<9% of it's credit limit) balance each month and then pay in full before the due date. You can use it as much as you want during the month but what's important is the reported balance because for most cards whatever is reported on the monthly statement is what is used to calculate utilization for the month.

You might have to play around with the percentages for a few months to see what works best for you. Some people say that 1-3% utilization helps the most. For others it might be 5-9%. As I said it's not one size fits all.

On any other cards always try and have them report a zero balance each month. That doesn't mean you can't use them just make sure that the desired zero balance on these accounts is achieved several days before their statements post.

Along with individual and overall utilization, FICO also scores the number of all types of accounts reporting a balance.at any one time Making sure less than half of all your accounts report a balance helps most people.

 

[CreditDunce]

You revolving utilization is scored on each trade line and overall utilization.  You are also penalized for having more than one card with a balance (or not having any cards with a balance.   Charge cards (e.g. Amex gold) do not count towards utilization, but they do count towards the number of cards with balances.

If you just closed the BoA credit card, you might want to ask BoA if they will re-open the card without a hard pull.  Even if the card doesn't have a large credit limit, a open trade line with a zero balance will help your overall utilization.  On the other hand, if you mortgage lender recommended you close the account, you may not have much choice.

You can also request your credit card lenders for CLIs if they will do so without a hard pull.  It is harder to get a CLI with higher balances, but it is still worth a try.  If you are able to get a CLI or pay a substantial amount towards a credit card bill, you can ask the credit card company to do an out of cycle report.  Otherwise, it will probably not be reported until after your next statement.  This is especially important with Discover since they normally skip reporting the month after you get a CLI.   Be careful to not trigger any hard pulls on your credit report when requesting CLIs.

Utilization changes can easily change your score 20-30 points.  However, I don't have any guesses on how much improving your utilization will help you.

Good Luck!