Understanding FICO® Scoring

[Chocoholic73]

The past two months I've been lurking in these forums have really helped me a lot. We're in the process of buying a house, and started my mortgage application with the ff scores EX 555, EQ 563, and TU 632, all lender pulls on 5/6/2012. What hurt my score mostly were 2 recent derogs from Verizon (not my fault) and Amex ( my fault). Thanks to all the info that I got here, I was able to dispute the Verizon report and my EQ score jumped to 622. I tried to GW Amex but haven't succeeded yet. We're trying to qualify for Down Payment Assistance and need a midscore of 650. Based on lender pull as of 6/25 EX 610, EQ 622, TU 640. From what I gathered here, the most I can do now is decrease my utilization. I have 4k, maybe 5k at most to use in paying off my CCs, my question is where do I put it? Here's how my balance to CL looks like: HSBC - 4500/ 6300 Chase - 2400 /3200 Discover - 1600 /2500 Best Buy - 291 /1005 Sears - 312 /1000 Macys - 500 (no CL reported) I need to make a decision asap since closing date is already scheduled for 7/31. How do I get that score boost from 622 to 650? Planning to do a rapid rescore after payment. Help please. Thanks in advance

[OhioCPA]

You are getting dinged for two things, high utilization and number of cards reporting.

I see two possibilities for $5,000, 1) pay all cards, with the exception of Maycs, down to below 30%, 2) pay off Best Buy and Sears and have the other three just under 35%. I would vote for option 2 since it would get two of your cards to report zero. The FICO scoring model seems to like zero balance on some cards, more than half if possible. While this wouldn't get you to half it would at least give you two accounts at zero.

At only $4,000 I would also follow option 2, just with a larger percentage reporting on the three larger cards.

Good Luck.

[Quips]

I wouuld pay off the Discover, Best Buy and Sears (thats $2,200) - then I would pay $850 on Chase to get it below 50% UTI - and use whatever remains of your $4 or $5K and put it on HSBC. I think that will give you the most bang for buck.

[cassembler]

I'd definitely pay off the smaller cards first and spread the rest out to the bigger ones, as per above suggestions. EDIT: This will also probably have the biggest impact to your DTI, since most lenders use minimum payment for calculations I think.

Also consider if Verizon and/or Amex would consider a GW, or PFD?

[Chocoholic73]

Thank you all for your suggestions. I already paid off Best Buy, Sears and Chase - total of about 3k, then I put 1600 on HSBC and 400 on Discover which brings down my util on both cards to less than 50%. Hopefully that does it for the 28 points that I need. Keeping my fingers crossed. Wish me luck! Thanks again

[Quips]

Good luck - let us know how your score comes out.

[BigDaddy18]

I like where this thread is going.  I'm glad you were able to put your money in a spot where it's going to be most beneficial please keep us informed of your outcome this is a great thread.  Good Luck!!!

[Crashem]

Amex is pretty good about Pfd although I don't think they call it that. How much is Amex owed?

[StartingLifeOver]

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Chocoholic73 wrote:
Thank you all for your suggestions. I already paid off Best Buy, Sears and Chase - total of about 3k, then I put 1600 on HSBC and 400 on Discover which brings down my util on both cards to less than 50%. Hopefully that does it for the 28 points that I need. Keeping my fingers crossed. Wish me luck! Thanks again

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Sounds like a well-crafted plan!  I hope it gives you the point jump you need.  Interested to find out what happens.  Where did you find an organization to help with down payment assistance?  I am looking for the same and don't know where to start. 

[Chocoholic73]

Sorry for the delayed update! Waiting for the rapid rescore for a week has been stressful, but after all the payments posted, my scores were (drumroll)..,,,, 652 on TU and 647 on EQ. EQ was my middle score and I didn't request for a rapid rescore on EXP so I don't have an idea how many points I could have gotten there. I have mixed emotions, coz I didn't qualify for the Down Payment Assistance Program , but the good thing is that I was able to bring down my util from 68% to 24% ( and to 9% by next week) which raised my scores high enough to qualify for 3.25% rate on regular FHA. Plus, we'll be going into this mortgage with only the house and the car payments to think about. I feel good about the fact that I have finally broken free from the clutches of my credit cards, and this is a situation that I wouldn't want to be in ever again. Thanks to everyone and to my fico for the wealth of information that I have received in the past few months. Couldn't have done it without you guys