Likliehood of Mortgage Score Increase by 20pts

[Anonymous]

My husband and I are in the process of purchasing a home and our LO informed me I need to get my mid score up to 600 for FHA qual. I just had disputes removed which dropped my Equifax score by 29 pts. My current scores are TU 548/EQ 581/EX 628. I do have 3 credit cards with utliization above 30% which I just paid down to 20%. With paying those down what is the likliehood I can get my EQ score up to 600? The simulator only shows me the fico8 scenario.

[Anonymous]

To ellaborate before paying off my cc my balance was :

Capital One 96% of credit limit- just paid down to 20%

Wayfair- 76% of credit limit- just paid down to 20%

Overstock- 30% of credit limit-just paid down to 20%

I am wondering if I should pay these down further for an even bigger jump in score or will it not make that big of a difference?

[Anonymous]

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@Anonymous wrote:

To ellaborate before paying off my cc my balance was :

Capital One 96% of credit limit- just paid down to 20%

Wayfair- 76% of credit limit- just paid down to 20%

Overstock- 30% of credit limit-just paid down to 20%

I am wondering if I should pay these down further for an even bigger jump in score or will it not make that big of a difference?

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Welcome to MyFICO

Paying them down below 10% will help your scores but it is hard to say exactly how much they would increase.  For ideal FICO scoring you want to have all but one card paid to a zero balance and leave a very small balance ($5 for example) on the remaining card.

[Anonymous]

Many Thanks, Are close date is May 27 (estimate) So I have a few months to get my mid score to 600. I guess to be on the safe side I should pay everything off and leave a small balance on capital one to know for sure if I can get to 600. I am a nervous wreck waiting for my balances to report to the credit bureaus to see where I end up.

[Anonymous]

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@Anonymous wrote:

Many Thanks, Are close date is May 27 (estimate) So I have a few months to get my mid score to 600. I guess to be on the safe side I should pay everything off and leave a small balance on capital one to know for sure if I can get to 600. I am a nervous wreck waiting for my balances to report to the credit bureaus to see where I end up.

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That would be your best approach.  Also you might see what you can do about any negatives on your credit report that are holding your scores down. We have a 'Rebuilding Your Credit' forum where people can provide guidance in that area.  Additionally we also have a mortgage credit forum where you can find good advice in reaching your goal.  It certainly is a nerve wrecking process and I wish you the best of luck.  Please update as you can we hope you participate in the forums overall.  There is a wealth of information here for all your credit questions/needs and we have many knowledgeable people here to assist you.

[Anonymous]

Get % below 9 asap. No more charges or inq til after closing. Leave just one account with a balance. There is "rapid rescoreing" I don't know what the current costs are.  One final thing the day of closing some lenders will pull your credit again to may sure you have not done anything bad and scores have not changed.  640ish  Fico  is where the cutoff is for regular FHA a some  will go below that at a higher interest rate and and dna sample. A few want as high as 680 but unlikely for FHA.   

[Geordi]

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@Anonymous wrote:

... our LO informed me I need to get my mid score up to 600 for FHA qual...

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Would you mind PM me with your FHA lender that accepts midscore of 600?

Thanks in advance

[StartingOver10]

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@Anonymous wrote:

Get % below 9 asap. No more charges or inq til after closing. Leave just one account with a balance. There is "rapid rescoreing" I don't know what the current costs are.  One final thing the day of closing some lenders will pull your credit again to may sure you have not done anything bad and scores have not changed.  640ish  Fico  is where the cutoff is for regular FHA a some  will go below that at a higher interest rate and and dna sample. A few want as high as 680 but unlikely for FHA.   

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^^^This information is not correct.  

I can tell you that many, many lenders go way below 640 for a FHA mortgage (I'm a Realtor and work with a ton of lenders). 

For a lender to require 640 mortgage mid-score is a lender overlay.  FHA doesn't require it.

Many of the lenders I work with go to a 580 mortgage mid-score for the minimum to qualify for FHA.  Some even go lower, but then you have to put down 10% as a downpayment rather than the standard 3.5% 

I don't blame Backwoods for not knowing. A lot of the lenders will say "This is an FHA requirement" when in fact it isn't a requirement by FHA but a requirement by the lender itself (lender overlay).  They do this so they don't have to explain..or maybe they don't know where the requirement comes from.  

[Anonymous]

Thank you I just did exactly as your recommended and call the creditors to find out when they report. My capital one which had a balance of $937 I paid down to $930 they said they will report again on 3/5 to the bureaus. My other cards Wayfair had a balance of $398 credit limit of $2000 I paid that off this morning and they said they just report on 2/25 and wont report again until 3/25. Overstock had a balance of $999 credit limit of $5000 which I paid off completely and they said they will report again on 3/11.

How can I get my balances reflected sooner than when they are reporting?

[Anonymous]

My morgage broker would like me at a 620 but said he can get it done with a 600. I had a BK dismissed in 11/2014 so not sure if that is why he is wanting the score at 600 and not a 580. We have 20% to put down if needed. I am hoping with me paying off the balances that will get my mid score to at least a 600...