Newbie with FICO scoring questions

[Anonymous]

First, a disclaimer,  I am a newbie to this forum.   While I have read credit scoring 101 and many, many of the posts, I might have missed something that could answer my specific questions.     If so, I apologies and ask that you point me in the right direction.  I also tried using the FICO simulator, but it is too general a tool to help with the specific scenarios I am looking at.

Situation:   Reviewing FICO scores in preparation of some major Real Estate changes next year.  Trying to make sure everything was good.   While scores are good (760-770), it would appear that the 760 is right on the cusp of the next tier down and I would like to see what I can to to add a bit of cushion to the numbers as I will have to apply for new HM and HELOC loans next year.

Overall, have 12 open accounts, 5 (1 HM and 4 CC) that show a balance.   All are current and all PIF each month.   Only blemish on the CC history is 1 30 day LP 5.5 years ago.   All three CRA show payment history, new credit inquiries, and overall credit history VG to great.

 Questions

1)  Is 760 the floor of the excellent rates (as many posts might indicate)?    If so, than is working to go higher of any benefit (other than to provide a cushion)?    Do many institutions offer even lower rates for 800+ scores?  

2)  TU reporting too many cards with balances.  1 card has 98% of transactions and does run a 5 figure balance.  The other 3 cards have low hundreds per month and are used to segregate charges (one for home business, one for on-line purchases (etc).      Again, all are PIF each month

• Is this convenience costing me points?   Should I consolidate (not close) purchases down to 2-3 cards and just charge more per card?
• I noted that 3 of 4 active cards do not show a CL though I know from my statements they exist.  It would appear this is hurting my utilization rate.   Should I attempt to get them to post it through to the CRAs?   I am going to guess that in the absence of this the FICO score is generated off the maximum reported previous balance?   Is this correct?
• If I figure the util rate based on the account statements, I come out with a much lower %.   Should I rotate the "large bill" around to one of the other cards occasionally to get that "max past balance" higher on some of the other cards (if the previous question results as true as to how util rate is calculated in absence of CL reported from CC).

3) EQ reports too much debt.  All other factors same as TU.    

•  The reason for the one major balance on the one very active card is extensive travel (business and personnel), so we really cannot lower activity.   It would appear moving to a 2x payment per per month would help, but that seems like a real pain, and with our travel may not be really possible to do religiously.  Any other suggestions?

4)  EX states a negative factor is that CC are not showing recent activity, though the account details show the same active balances as TU and EQ.   Their comments indicate that my score would be better if there was CCA.   Any clues?

5)  No current or past installment loans shown.  (company cars for years, and then cash thereafter).  Is this hurting me?    Should I take a car loan out and then pay off VERY quickly  (say 3-6 months).   While this will cost me a bit of interest, what might the impact on my report be (either in taking out the loan, paying it down quickly, or closing it out after 3-6 months)?

5)  HELOC question.    My son reported that he opened a large HELOC 8 months ago as a safety net but has not had any balance on it ever. When he next checked his credit he found this FICO had gone up by +30 despite opening 1 new additional card.    We wonder if the unused HELOC is lowering his util rate% and thereby helping the overall score.    If true, as I will need a HELOC in the future to help with cashflow of the RE transactions, should I take it out now and leave it unused for 4-7 months?    Where do you (all) think the net results on points will go (1 inquiry in taking out the HELOC vs adding large unused credit line)?

6)  Finally, I note that there are three paid off mortgages from 1980/90s not showing up on my wife's report.     These were paid off in good standing.  Can these be added into the history and/or will it make a difference? 

Thanks in advance to all whom read this.   

[Junejer]

Alright, I am feeling brave this evening, and you have quite the list, so let's get started.

1). 760 middle score will get you the best mortgage rates available. It would be wise to get a bit of a cushion in the score.

2). TU doesn't like this. My recommendation is that you only allow one card to report a balance. TU likes to have less than 1/2 of your accounts to report a balance. So, you have a mortgage and four CCs reporting balances. You should only have two of the accounts running a balance--your mortgage and the one CC with the high balance.

You can still use the others for convenience, but just make sure that you pay them in full BEFORE the monthly statement cuts. Find out your statement dates and go in 3-5 days before those dates and PIF. Then, don't use them again, until after the statement cuts.

Do the best you can to get that high balance paid down.

3). See number 2 above

4). EX is crazy. Ignore that, if it's showing the activity.

5). Credit mix is 10% of your total score. I wouldn't get credit that I don't need, especially in this climate, just to get a credit mix. IMO, it's not hurting you that badly.

5). How large is large? That could be the case. Opening revolving credit without using it, makes for a larger denomenator, while keeping the numerator the same. The result, lower util % and a rise in score. Try to keep both individual and overall util between 1-9%.

6). Unfortunately, no. Accounts in good standing may remain on your credit reports for up to 10 years from date of closing. They may also fall off earlier than that, without warning (like 3 years after closing). Ask me how I know that.

[Anonymous]

Byrdman,

Thanks for your thoughtful post

Will try to work on the CC balances. It would appear from your comments (and others that I found after posting my question) that TU and EQ look at both overall utilization and individual card utilization. If this is true, it could be impacting me in that the one card I use for most everything runs at 35% utilization even though overall is about 11%.

Assuming that I will keep total CC $$ the same month to month (remember, all are PIF each month), would I be better spreading those dollars around to various cards to lower this single card utilization. If would raise utilization on the others, but I could keep all below 10% with this strategy.

As for the HELOC, I will need to take out one large enough that it would easily move overall utilization to the less than 7% that shows as ideal. Will not need this for a 4-6 months, so it really comes down to whether to wait and do my HELOC and HM at the same time (taking advantage of the 14 day window) or doing 1 HELOC now and hoping that the points benefit of the lower overall util rate % outweighs the inquiry. Anyone have an idea on if this would be a positive move (with the assumption that the util rate would indeed go to sub 7%).

All comments welcome. This may help others with ways to change spending habits to boost scores.

Thanks

[Anonymous]

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@Anonymous wrote:

 Questions

1)  Is 760 the floor of the excellent rates (as many posts might indicate)?  

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The experts on the Mortgage board have indicated the best rates for mortgages are available for a 740 midscore.  Not sure about other forms of credit but that leaves a little cushion.

[Junejer]

Hey working, you're welcome.

I understand that you PIF each month, but if you went in and paid before the statement cuts, then the CCCs will report a $0 balance, which will help your overall util. Overall will be reported at under 9% it would seem and that will help your score. If you have your CCs segregated for business purposes, don't upset that applecart to manipulate util. It seems to me that it is easier to PIF before the statement, than to desegregate your CCs.

If you don't need the HELOC now, I would not get it, because you are going to have to redo it again anyway, when you refinance. You would have to go through trying the get the HELOC to subordinate (which doesn't happen these days) when you refi (HELOC will slide into first position once current mortgage is satisfied). This, of course, is irrelevant if the 1st and 2nd are from the same institution.