Is there anything else I should be doing?

Anonymous · ‎12-30-2009

My fiance and I are going to be applying for construction loans soon. (I hope). Before we do this we need to get my credit score up. We've been working on it for a year and a half now. We were told by the mortgage broker at the bank that I needed at least a 660 to be considered by their company. We are doing everything in our power to get my scores up as fast as possible. Here is what we have done so far.

I started out in the low 600's on all 3 scores.

1. I now have 3 credit cards opened in the past year and a half. (Discover, Capital One, and Penney's)

2. My car paid off a year ago. (It was at end of term. Final payment was in Jan of 09)

3. All payments for the past 3 years have been made on time and in full (usually more)

4. I carry small balances off and on on the cards. Always below 30%

5 I am an authorized user on my fiance's card. He has great credit and this gave me an added 6 years of good history.

6. I have disputed all inaccurate items on all three reports.

I just pulled my FICO scores for Equifax and TransUnion. They were 616 and 654 respectively. I know that my Experian was the highest the last time they were pulled and several inaccurate negative items were removed since then. I know that our bank pulls all three scores and uses the middle one. Basically I need two scores to be above 660. So we've kind of given up on Equifax. They have been horribly slow with corrections, I'm hoping some will come through soon.

Last month we jumped to about 70% usage on my fiances card. (It was the only way he could keep the ring and proposal a surprise (- We paid it back down below 30% the day after our engagement. This reduced usage has not reported yet, so I'm hoping for a little jump from it.

Any ideas on other things we could be doing?

Assuming payments are all made on time and there are no other changes, do you think we are looking at a long road to get above the 660 mark?

Sorry this is kind of long and confusing. Feel free to ask questions.

Thanks in advance!

Jazzzy · ‎12-30-2009

My first impression is that your credit utilization percentage is still too high...30% will not maximize your FICO scores. You actually need to be at 9% utilization or lower.

It sounds as if being an AU on your fiance's card can be a positive for you, but you need to get the balance down.

Another thing you might watch is having all of your credit cards report zero except one. You can lose points if too many accounts show balances. Let only one card show a balance...and make that a small balance.

Also, you are aware, aren't you, that you need to be paying your cards off before the statements cut? By paying your balances off before the statements cut, you are managing what actually reports to the credit bureaus. Even if you pay in full after you receive your statement, all that matters to FICO is the balance due reported by the credit card company...not that you immediately paid it off.

Are you able to pay your balances down before you apply for your mortgage?

...and...welcome to the forums.

DI · ‎12-30-2009

Welcome to the forum. Continue to pay down your credit card debt and pay on time. Let those accounts mature. That will continue to help your FICO scores.

Anonymous · ‎12-30-2009

I guess I should have been clearer. The balances we carry are usually no more than a hundred dollars or so, and that keeps us way below 30%. Probably closer to 5%. The lady at the bank told us that we should keep our usage below 30% so that was our original guideline. He read somewhere about paying before they hit the report and the last few months we have been doing that if we put much on the cards. His card is down to about 8% usage but hasn't reported yet. We have enough to pay it all off but we move small balances in and out just to show usage. To be honest we don't "need" the cards at all. We pay cash for everything and are sitting on a nice little nest egg for the down payment.

We feel very lucky to be in this position. I will be 30 next week <gasp> so we are still really young. We're just trying to make sure that we go about this the right way and our only real milestone right now is my score.

I'll mention the idea of only using one card per month to him. That might be something else to try.

Thanks so much for the input. I'm open to any suggestions!

Message Edited by ImNotTelling on 12-30-2009 12:01 PM

Jazzzy · ‎12-30-2009

@Anonymous wrote:
I guess I should have been clearer. The balances we carry are usually no more than a hundred dollars or so, and that keeps us way below 30%. Probably closer to 5%. The lady at the bank told us that we should keep our usage below 30% so that was our original guideline. He read somewhere about paying before they hit the report and the last few months we have been doing that if we put much on the cards. His card is down to about 8% usage but hasn't reported yet. We have enough to pay it all off but we move small balances in and out just to show usage. To be honest we don't "need" the cards at all. We pay cash for everything and are sitting on a nice little nest egg for the down payment.

We feel very lucky to be in this position. I will be 30 next week <gasp> so we are still really young. We're just trying to make sure that we go about this the right way and our only real milestone right now is my score.

I'll mention the idea of only using one card per month to him. That might be something else to try.
Thanks so much for the input. I'm open to any suggestions!

Hi...just to clarify...you can use as many cards each month as you want. The point is only letting one card actually show a balance. Again, it's not about usage. It's about the timing of payments and what you allow to be reported. I use my cards a lot for the cash rewards and airline miles I get. I just pay them all off before they report balances except one small balance.

Do you have any negatives on your reports? Late payments? Charge-offs?