New to credit cards. 1 card and balance to raise FICO question.

[Anonymous]

I'm new to credit cards and only have one at this moment.  I'm looking to apply for a mortgage loan in Jan 2016 and would love to raise my FICOs for better interest rates.

I've read around on the forums and found a little of what I'm looking for.  From my gathering my single credit card needs to be used.  A 1-9% balance is ideal (I read that 2% is the best).  Again, I'm totaly new to credit cards.  If I use 1-9% of my card, do I just pay the minimum bill until after I get that mortgage loan... or do I have to pay off my card each month then use my card again each month? 

[Anonymous]

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@Anonymous wrote:

I'm new to credit cards and only have one at this moment.  I'm looking to apply for a mortgage loan in Jan 2016 and would love to raise my FICOs for better interest rates.

I've read around on the forums and found a little of what I'm looking for.  From my gathering my single credit card needs to be used.  A 1-9% balance is ideal (I read that 2% is the best).  Again, I'm totaly new to credit cards.  If I use 1-9% of my card, do I just pay the minimum bill until after I get that mortgage loan... or do I have to pay off my card each month then use my card again each month? 

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All you need to do is let the statement cut with the balance % you want. Pay it in full if you don't want to pay interest. And repeat the next month.

One question I have is why is there such a large difference between your scores? Are they a combination of FICO and FAKO? I'm not sure raising your utlization will give you much of a boost and it may even lower it. Especially since you say you only have 1 card.

[takeshi74]

You really want at least 2-3 cards but if you're looking to buy in January then you may be too late.  I'd recommend adjusting your timeframe.

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@Anonymous wrote:

If I use 1-9% of my card, do I just pay the minimum bill until after I get that mortgage loan... or do I have to pay off my card each month then use my card again each month? 

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You don't have to limit spend.  You can pay down the balance just prior to report date.  Most cards report on statement date but confirm for your card.

You want to pay every statement balance in full to avoid incurring interest.

[Anonymous]

sc32valve, I feel I need to use my one credit card because in the "what's hurting you" area of my myFico credit report, it says that I'm not using my revolving credit (which is my one credit card).  From what your saying, does that mean there is a chance that actually putting a balance on my card will not help even though myFico says to use the card?  Also, because I plan to use about $70 of my $3000 credit limit, I'm not overly concered with the interest rate for a couple of months.  This does mean that I could spend the inital $70 and pay the minimum (including interest) bill before the cut date.... instead of spending $70 on the card each month?  I hope that makes since.

Those are my FICOs.  I had never sit down and truly went over my credit report until Aug.  I had things that were legitaly disputable.  For instance, my one car loan was showing up under three different companies because the loan was sold twice.  The car was reposesed with the first company, but I got the payments caught up and claimed the car 24 hours later.  All three companies for the car loan were reporting that the car was reposesed and never reclaimed.  Fixing just the car information on my credit reports made my score jump. 

Takeshi74, I agree.  I wish I had more cards at the moment, but I don't.  I'm currently living in the home that I want to buy.  I tried to buy it last year, but my scores were too low.  So we moved in with the agreement that we would try to buy the home again this coming Jan.  If we don't qualify again to buy the home, then we're forced out of the home.  Time isn't on my side for this home.  BUT, if we end up not getting the home, I believe I know the correct steps to insure a home purchase in another year or so.

[Anonymous]

i wouldn't app for anything until that home finalizes.

[Revelate]

Are those your mortgage scores?

IF you aren't sure on them, get sure, like ASAP before doing ANYTHING credit wise.  3B pull from here is by far the best method for doing that.

You're a little stuck now, as a new account might help or might hurt you and probably a mix of both; when did you open that one CC?  You're a thin file now, do you have someone (parents or spouse or similar) that you can maybe tack a pair of AU's on for a short term fix?

[StartingOver10]

+1 on Rev's post.  

Where did you get your scores?  Remember FICO 8 scores are not FICO mortgage scores.  You can only get your mortgage scores here or at lender. Better to pull your scores here first so you know where you stand. Mortgage lenders use the lowest mid score of all the people on the loan. eg, if it is you and your SO on the loan, whichever mid-score is lowest is the qualifying score.

if you get a new cc now, you will take a hit for new card and that is taking a high risk this close to application time. Can't really go any further without knowing if your scores are mortgage scores or FICO 8 scores.  Please advise.

[Anonymous]

Those are my fico 8 scores.  My mortgage scores are 630, 696 and 646.  646 would be my middle mortgage score and I will be the only one on the mortgage loan.  I first applied for this house loan early of last year.  I was told my mortgage score was too low and that I needed it at least a 620.  I raised it slightly above 620 and reapplied for the mortgage.  The loan people came back with now they want it to at least 640.  Well, I have it at 646 now.  I would love to be able to get it a little more higher before I try with this mortgage loan again this coming Jan.  I really don't want the company to say again, "Still not high enough". 

[StartingOver10]

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@Anonymous wrote:

Those are my fico 8 scores.  My mortgage scores are 630, 696 and 646.  646 would be my middle mortgage score and I will be the only one on the mortgage loan.  I first applied for this house loan early of last year.  I was told my mortgage score was too low and that I needed it at least a 620.  I raised it slightly above 620 and reapplied for the mortgage.  The loan people came back with now they want it to at least 640.  Well, I have it at 646 now.  I would love to be able to get it a little more higher before I try with this mortgage loan again this coming Jan.  I really don't want the company to say again, "Still not high enough". 

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I would say to go with another lender.  Don't go to a big box bank.  Go to a correspondent lender/mortgage banker that only originates, underwrites and funds mortgage loans. You are in good shape for a FHA type loan with a 646 score - not a conventional mortgage.  Conventional mortgage rates and mortgage insurance is much higher than FHA if your score is less than 680. For FHA you get a good rate with a 646 score.

[Anonymous]

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@Anonymous wrote:

sc32valve, I feel I need to use my one credit card because in the "what's hurting you" area of my myFico credit report, it says that I'm not using my revolving credit (which is my one credit card).  From what your saying, does that mean there is a chance that actually putting a balance on my card will not help even though myFico says to use the card?  Also, because I plan to use about $70 of my $3000 credit limit, I'm not overly concered with the interest rate for a couple of months.  This does mean that I could spend the inital $70 and pay the minimum (including interest) bill before the cut date.... instead of spending $70 on the card each month?  I hope that makes since.

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Hi Topher.  It sounds like you are telling us that (at least at the time that you got your scores) your credit card was reporting a $0 balance.  Is that right?

If so, you should get a significant score increase from charging a small amount (you mention $70) and then letting that amount report on your next statement.  (Actually you want to have a small amount reporting each month for the next several months.)

I notice that you joined the myFICO forum in July.  I promise I am not giving you a hard time, but you realize you are presenting the people here with an emergency that could have been averted if you had chosen to talk to some of us back in August -- right?  You are basically telling us that you want to buy a home in six weeks.  Again, not giving you grief, just encouraging you to allow this to be a teachable moment, where you learn that for major financial events in your life, you need to enlist help and make plans many months ahead of time.