Maximizing score before mortgage application

[Anonymous]

Hello,

I plan to apply for a conventional morgage in about two to three months. My latest Transunion score from MyFico was 741 on October 10th, 2011.  I have three secured credit cards, and two secured loans, all of which have been opened for about 13 months. The credit cards are paid off in full, and I make a small purchase on one of them each month. Limits for these cards are 5,000, 3,300, and 2,000. My secured loan balances are 1200 and 800. My question is, should I pay off one or both of the secured loans, or is the active loan actually helping my score? If I should keep the loans active, should I pay the balance down at all?

Thank you. 

[Anonymous]

---

@Anonymous wrote:

Hello,

I plan to apply for a conventional mortgage in about two to three months. My latest Transunion score from MyFico was 741 on October 10th, 2011.  I have three secured credit cards, and two secured loans, all of which have been opened for about 13 months. The credit cards are paid off in full, and I make a small purchase on one of them each month. Limits for these cards are 5,000, 3,300, and 2,000. My secured loan balances are 1200 and 800. My question is, should I pay off one or both of the secured loans, or is the active loan actually helping my score? If I should keep the loans active, should I pay the balance down at all?

Thank you. 

---

This is not my field of expertise (if I have one).....

But I would say keep the secured loans open and paid on time, I would think they are helping your score.

As far as the CC's are concerned, you said they are paid in full, does that mean all your CC's are reporting a 0 balance to the CRA's?

If that is the case, I'd make a small charge one one of your CC's and let it report a small balance ($50-75) the reason I say this is because FICO likes to see a little util, having 1-5% revolving util is better than having 0% util (odd but true).

Get that one CC to report that small balance and you could see a small point increase, it could be a 2 point increase, it could be a 9 point increase, only FICO knows the exact answer to that.

Wishing you the Best of Luck.

[GregB]

You are almost certainly going to benefit from having at least one installment loan open - by that I mean not paid off, which closes an installment loan. You will probably benefit slightly from having one instead of two. If you choose to pay off one, I would keep the one that has the smallest balance compared to the original balance as long as it has been open for at least 6 months.

Three CC may be enough where you will benefit from having a balance on less than half of your accounts. Look at your FICO report for references of "too many accounts with balances" to see if you need less. Look at the number of accounts on your report to see what is included on your report.

I would also get your EQ FICO here as that will be exactly the score that they will use for your EQ FICO on your mortgage app.

[RobertEG]

Are there any non-FICO related issues, such as debt to income, unpaid debts, etc., that arent being included in your FICO scoring that might be of concern to mortgage lendor?

It appears that your FICO is solid.