topic Re: Mortgage Score Impact - Less Than Expected in Understanding FICO® Scoring

Mortgage Score Impact - Less Than Expected

Anonymous — Mon, 17 Feb 2020 16:43:19 GMT

I will be purchasing a home in the next couple of months and need to get my middle mortgage score to 700.

1/16/20 Report - Mortgage Scores

EQ: 659

TU: 686

EX: 650

Revolving Accounts

Discover: $3,507/$4,600 (76.2%)

Chase : $16,410/$20,800 (78.9%)

Cap One : $0/$300 (0.0%)

Total : $19,917/$25,700 (77.5%)

2/17/20 Report - Mortgage Scores

EQ: 659 (No change)* Discover did not update on EQ yet

TU: 688 (+2)

EX: 664 (+14)

Revolving Accounts

Discover : $3,107/$4,600 (67.5%)* TU & EX updated

Chase : $13,306/$20,800 (64.0%)

Cap One : $0/$300 (0%)

Total: $16,413/$25,700 (63.9%)* TU & EX updated

**Nothing else changed from the previous month except for positive payments on an auto loan and handful of student loan accounts. I am an authorized user on a $0/$15,000 card that I did not figure into any of the utlization ratios.

While EX increased 14 points, I was surprised to see that EQ did not move at all and TU only moved 2 points. Even though Discover has not updated on EQ, the Chase utilization went from 78.9% to 65.4% (crossed individual threshold of 68%) and aggregate utlization went from 77.5% to 65.4% (crossed aggregate 68% threshold), yet there was no change in score. On TU, the Discover CC was updated, so it had Discover go from 76.2% to 67.5%, in addition to Chase and the aggregate utlizations crossing the 68% threshold. Based on what I have read, crossing the aggregate threshold should have been a 10-15 point bump and crossing the two individual thresholds should have been around a 5 point bump each - so I was expecting a 20-25 increase and only received 2 points.

Addtional background, I have a Capital One charge off account from 7/2015 for $1,000 and several 60 & 90 day lates from 2015 & 2016 on student loans and a closed auto loan. No late payments on any account after 2/2016 and currently one hard inquiry from 4/2019 on EQ and EX. Based on the level of derogatory activity from 2015/2016, I imagine that I am in a dirty bucket.

Any thoughts on this? Thank you for your help!

Re: Mortgage Score Impact - Less Than Expected

donkort — Mon, 17 Feb 2020 16:59:50 GMT

I'm not an expert.....but dropping your overall utilization below 48.9%, and within each card at 48.9%, will most likely raise your middle score to at least close to 700.

Even better if below 28.9%.

Re: Mortgage Score Impact - Less Than Expected

Revelate — Mon, 17 Feb 2020 18:17:19 GMT

The mortgage score tolerances for revolving debt especially EX FICO 2 seem to be more stringent based on what limited utilization testing I can do.

I haven't nailed it down but even with one tradeline at around 7700/25000 I dropped 14 points on EX FICO 2, but I am also seeing that now with a similar balance spread out on multiple cards so I don't quite know what's going on. Looks like my clean EQ 5 score also moved similarly, dirty TU 4 (60D) didn't move nearly as much.

Funny though my TU became my mid score on the trimerge: I wouldn't have expected that TBH under basically any scenario with a 60D still marked as recent but TU is as TU does and other than that late it is spotless and installment utilization doesn't seem to be a thing on that scorecard at least.

Anyway if you put out what your metrics are, AAOA, AOYRA, any negatives we might be able to give you some idea as to what the max score is when your revolving utilization is pretty... paydowns unless you cross a breakpoint you won't see much if any movement and we don't know the higher revolving utilization weights at all honestly as it appears to be scorecard dependent.

Re: Mortgage Score Impact - Less Than Expected

Anonymous — Mon, 17 Feb 2020 18:39:50 GMT

You'd have an even better impact to scores if your individual utilization is below 28.9% and aggregate utilization below 8.9%

Re: Mortgage Score Impact - Less Than Expected

Anonymous — Mon, 17 Feb 2020 19:39:32 GMT

Thank you for your help.

AAOA: 8yr 11mo

AOYRA (Age of Youngest Revolving Account?): 1yr 3mo

Time Since Most Recent Late Payment: 4 years

No derogatory public records or collection accounts

Negative Accounts (10)

Capital One Charge Off: Charged Off 7/2015 and settled for less 10/16. Cap One reported charge-off/90 day+ late every month from 7/2015 until it was settled 10/16. In late 2015 I tried to make a payment over the phone and was told they could no longer accept payments due to charge off. Do all of the subsquent monthly charge-off statuses that run until 10/16 hurt or was the maximum damage done when the charge off occurred 7/2015?

Capital One (open account): 90 day late 10/14 on EQ, TU, EX; 30 day late on EQ 09/15 & 60 day late EQ on 06/15

Ally Auto (closed account): 60 day late 5/2015; 30 day late 11/2015

Navient (7 open accounts): Worst status 120 days late 9/2015; most recent late was 90 days 2/2016

Thanks again.

Re: Mortgage Score Impact - Less Than Expected

Anonymous — Mon, 17 Feb 2020 19:46:48 GMT

Agreed but based on this forum's understanding of how utilization thresholds work, I should have picked up points on EQ by crossing 68.8% on an individual and aggregate basis; however, my mortgage score did not change at all. For TU, I crossed it on two individual revolving accounts in addition to the aggregate revolving utilization, and the TU mortgage score only increased by 2 points.

Re: Mortgage Score Impact - Less Than Expected

Anonymous — Mon, 17 Feb 2020 20:30:08 GMT

I hope so, but as mentioned, I did not see any EQ increase from crossing the 68.9% threshold (and only a 2 point increase on TU), so it may not provide the anticipated score bump when going below 48.9%.

Re: Mortgage Score Impact - Less Than Expected

Revelate — Mon, 17 Feb 2020 21:03:09 GMT

CO's count the last in the chain rather than the first which is why they are so consumer unfriendly.

The one big question scoring wise is the settled notation from 10/16, that may throw things off but for reference I had a 5 year old tax lien and 60D late and collection when I applied for a mortgage and got to 720 mid score without as much history as you.

I don't think the older scores did much with patterns of lates and age of derogatory doesn't seem to matter that much either while it is on there, but your big path to improvement is that revolving utilization pay down.

Beyond that no new inquiries for anything if mortgage is the priority: yeah that takes some discipline on this forum but unless you know for a fact you are 12+ months out from even applying, stay frosty.

Every point counts when you are in the middle tiers and you will be until you get clean.

ETA: AU's count absolutely full monty on the mortgage scores.

ETA x2: this path to improvement assumes conventional; I think you could go FHA or VA/USDA right now with those scores assuming your DTI and downpayment / assets were enough. That said that much revolving debt at possibly 18%+ APR is just bleeding cash every month and is worth cleaning up financially too.

Re: Mortgage Score Impact - Less Than Expected

donkort — Mon, 17 Feb 2020 21:08:32 GMT

I believe 68.9% is considered very high utilization. Mine was 60% at one point--down from the 70s. No increase in score.

I feel like going below the 28.9% threshold would be the biggie; it was for me.

The youngest derogatories are almost 4 years old....perhaps more knowledgeable people could assess how that affects your score. And how it offsets the attainment of the lower utilization.

My score bumped considerably when I reached below 28.9%, even though one of my cards was reported to be still maxed out.

I see at least 700 should you attain 28.9% utilization overall.

Re: Mortgage Score Impact - Less Than Expected

Trudy — Mon, 17 Feb 2020 23:36:20 GMT

Number of accounts reporting is a factor with MTG scores. If you could somehow reduce this to 1 card reporting a balance it should help. If nothing else try to $0 out Discover, one less account reporting.

When I had lates on my file my MTG score would fluctuation between 10 - 30 pts depending on the # of accounts reporting a balance. Now I had one 30D and my UTL was between 3% - 8% and I know UTL is a big player with MTG's as well.

If you have any accounts aging to 1yr or INQ's falling off that may garner a few points as my profile indicates.

Re: Mortgage Score Impact - Less Than Expected

Anonymous — Tue, 18 Feb 2020 04:35:16 GMT

I didn't calculate the $0/$15,700 AU card. If that is calculated in the aggregate utilization then it went from 48.1% to 39.6%. That could explain the lack of score increase as it would not have crossed a new threshold.

Re: Mortgage Score Impact - Less Than Expected

Revelate — Tue, 18 Feb 2020 07:03:27 GMT

@Anonymous wrote:
I didn't calculate the $0/$15,700 AU card. If that is calculated in the aggregate utilization then it went from 48.1% to 39.6%. That could explain the lack of score increase as it would not have crossed a new threshold.

The AU anti-abuse algorithms didn't come into play until FICO 8; prior to that they count without restriction.

Re: Mortgage Score Impact - Less Than Expected

Anonymous — Fri, 28 Feb 2020 04:59:16 GMT

Yes they count all the way across the board on the mortgage scores. And being in a dirty card, you may have a maximum score. Your best chances are AZEO with a small balance.

Re: Mortgage Score Impact - Less Than Expected

Anonymous — Tue, 17 Mar 2020 13:36:27 GMT

Here's my update showing score movement as balances were paid down:

Shooting for mid-score 700:

1/16/20 Report - Mortgage Scores

EQ: 659

TU: 686

EX: 650

Revolving Accounts

Discover: $3,507/$4,600 (76.2%)

Chase : $16,410/$20,800 (78.9%)

Cap One : $0/$300 (0.0%)

US Bank (AU): $0/$15,700

Total : $19,917/$41,400 (48.1%)

2/17/20 Report - Mortgage Scores

EQ: 659 (No change)* Discover did not update on EQ yet

TU: 688 (+2)

EX: 664 (+14)

Revolving Accounts

Discover : $3,107/$4,600 (67.5%)*

Chase : $13,306/$20,800 (64.0%)

Cap One : $0/$300 (0%)

US Bank (AU): $0/$15,700 (0%)

Total: $16,413/$41,400 (40.0%)*

3/4/20 Report - Mortgage Scores

EQ: 668 (+9)

TU: 688 (No change)

EX: 664 (No change)

Revolving Accounts

Discover : $3,107/$4,600 (67.5%)* EQ Updated

Chase : $13,306/$20,800 (64.0%)

Cap One : $0/$300 (0%)

US Bank (AU): $0/$15,700 (0%)

Total: $16,413/$41,400 (40.0%)

3/16/20 Report - Mortgage Scores

EQ: 680 (+12)

TU: 703 (+15)

EX: 687 (+23)

Revolving Accounts

Discover : $0/$4,600 (0%)

Chase : $921/$20,800 (4.4%)

Cap One : $0/$300 (0%)

US Bank (AU): $0/$15,700 (0%)

Total: $921/$41,400 (2.2%)

Hard Inquiries

EQ: 1 (4/26/19)

TU: 0

EX: 1 (4/26/19)

My middle score is 13 points short of where I need it to get approved for a jumbo loan. Is my score maxed out for now? I was hoping to get at least 5 points for crossing each individual threshold; benefits for crossing aggregate thresholds; and a benefit for AZEO, so I expected 30-40 points but got nowhere close to that score bump. Is my older degrogatory info is holding down the benefit of low utlization/AZEO? I have tried GW's will Capital One, Navient, and Ally but have not had any luck. Any input would be appreciated!

Re: Mortgage Score Impact - Less Than Expected

donkort — Tue, 17 Mar 2020 14:51:22 GMT

Try to bring the Chase card down to something minimal---like $50 or something. That would be "true" AZE0.

Continue with those goodwill letters. The old charge-offs and major lates are probably suppressing the score somewhat.

Re: Mortgage Score Impact - Less Than Expected

Anonymous — Tue, 17 Mar 2020 15:33:25 GMT

Thanks for your input. While I can do that, I am now skeptical of how much of an impact it will have based on the disappointing results that I have seen so far. Over the past two months I paid down substantial CC balance, crossing 8 individual thresholds and 2 aggregate, and my EQ only moved up 21 points. If you don't assume any AZEO impact, that resulted in only 2.1 points for each threshold. I think the frequency and severity of my lates from 2014 to early 2016 are killing my score and are diluting my utilization benefit. With that said, I don't have any collections or public records on my CR's, just one charge off and a lot of old lates. I know I'm a signficantly better credit risk than my score reflects which is the frustrating part.

If I don't get my mid score to 700, I would have been better off going with a conventional loan and putting more money down a house - paying down credit card debt less aggressively later. Perhaps, these data points will help others in a dirty scorecard calculate the varying levels of impact in crossing utilization thresholds. For me, it was a lot less than others.

Re: Mortgage Score Impact - Less Than Expected

SouthJamaica — Tue, 17 Mar 2020 16:59:40 GMT

@Anonymous wrote:
I will be purchasing a home in the next couple of months and need to get my middle mortgage score to 700.

1/16/20 Report - Mortgage Scores
EQ: 659
TU: 686
EX: 650

Revolving Accounts
Discover: $3,507/$4,600 (76.2%)
Chase : $16,410/$20,800 (78.9%)
Cap One : $0/$300 (0.0%)
Total : $19,917/$25,700 (77.5%)

2/17/20 Report - Mortgage Scores
EQ: 659 (No change)* Discover did not update on EQ yet
TU: 688 (+2)
EX: 664 (+14)

Revolving Accounts
Discover : $3,107/$4,600 (67.5%)* TU & EX updated
Chase : $13,306/$20,800 (64.0%)
Cap One : $0/$300 (0%)
Total: $16,413/$25,700 (63.9%)* TU & EX updated

**Nothing else changed from the previous month except for positive payments on an auto loan and handful of student loan accounts. I am an authorized user on a $0/$15,000 card that I did not figure into any of the utlization ratios.

While EX increased 14 points, I was surprised to see that EQ did not move at all and TU only moved 2 points. Even though Discover has not updated on EQ, the Chase utilization went from 78.9% to 65.4% (crossed individual threshold of 68%) and aggregate utlization went from 77.5% to 65.4% (crossed aggregate 68% threshold), yet there was no change in score. On TU, the Discover CC was updated, so it had Discover go from 76.2% to 67.5%, in addition to Chase and the aggregate utlizations crossing the 68% threshold. Based on what I have read, crossing the aggregate threshold should have been a 10-15 point bump and crossing the two individual thresholds should have been around a 5 point bump each - so I was expecting a 20-25 increase and only received 2 points.

Addtional background, I have a Capital One charge off account from 7/2015 for $1,000 and several 60 & 90 day lates from 2015 & 2016 on student loans and a closed auto loan. No late payments on any account after 2/2016 and currently one hard inquiry from 4/2019 on EQ and EX. Based on the level of derogatory activity from 2015/2016, I imagine that I am in a dirty bucket.

Any thoughts on this? Thank you for your help!

1. Mortgage scores don't change that fast.

2. Your revolving utilization on individual accounts is still way too high.

Re: Mortgage Score Impact - Less Than Expected

Anonymous — Tue, 17 Mar 2020 17:12:40 GMT

@SouthJamaica wrote:
1. Mortgage scores don't change that fast.
2. Your revolving utilization on individual accounts is still way too high.

1. If the utilization substantially changes between reports, why would it not move quicker for the scoring related to the utilization component? I know it won't age quicker or drop off derogatory marks quicker, but I did not see the extent of scoring impact on utilization that many reference on this board.

2. I think you missed my updated post. I am at 2.2% total revolving utilization and AZEO, with a 4.4% balance on Chase.

Re: Mortgage Score Impact - Less Than Expected

SouthJamaica — Tue, 17 Mar 2020 17:43:51 GMT

@Anonymous wrote:
@SouthJamaica wrote:
1. Mortgage scores don't change that fast.
2. Your revolving utilization on individual accounts is still way too high.

1. If the utilization substantially changes between reports, why would it not move quicker for the scoring related to the utilization component? I know it won't age quicker or drop off derogatory marks quicker, but I did not see the extent of scoring impact on utilization that many reference on this board.
2. I think you missed my updated post. I am at 2.2% total revolving utilization and AZEO, with a 4.4% balance on Chase.

Yes I did miss your March 16th update. Sorry about that.

Nice going.

You averaged a 25 point gain in your mortgage scores; that's pretty significant. As I mentioned, mortgage scores don't move very quickly.

Re: Mortgage Score Impact - Less Than Expected

Anonymous — Wed, 18 Mar 2020 09:22:38 GMT

@Anonymous wrote:
Thanks for your input. While I can do that, I am now skeptical of how much of an impact it will have based on the disappointing results that I have seen so far. Over the past two months I paid down substantial CC balance, crossing 8 individual thresholds and 2 aggregate, and my EQ only moved up 21 points. If you don't assume any AZEO impact, that resulted in only 2.1 points for each threshold. I think the frequency and severity of my lates from 2014 to early 2016 are killing my score and are diluting my utilization benefit. With that said, I don't have any collections or public records on my CR's, just one charge off and a lot of old lates. I know I'm a signficantly better credit risk than my score reflects which is the frustrating part.

If I don't get my mid score to 700, I would have been better off going with a conventional loan and putting more money down a house - paying down credit card debt less aggressively later. Perhaps, these data points will help others in a dirty scorecard calculate the varying levels of impact in crossing utilization thresholds. For me, it was a lot less than others.

@Anonymous Is that charge off paid or not?

Yeah, you may have a max score due to being in a dirty card.