topic Re: Is it time to go to the Garden??? in General Credit Topics

Is it time to go to the Garden???

Anonymous — Sat, 01 Dec 2018 20:51:37 GMT

Good afternoon -

I am new posting to the forums but I have been an avid reader/follower for some time.

So here is my situation. I have been working to restablish and rebuild and am thankful for the chances I have been given. I really want to improve my scores in order to obtain a mortgage for my family.

I have:

USAA Secured -$300 - Thinking about closing

NFCU AM EX - 4200 actual utilization about 4100

Cap One Quicksilver One - 1500 acutal utilization about 1200 - can pay off monthly -

NFCU Car Loan #1 - About 1,800 remaining - should be paid in March

Student Loans about 161K

New NFCU Card - Approved for 8800

New NFCU Car Loan#2 (Family Car) - Approved for 26K

My scores right now are in the 580s due to some SL confusion that was cleared up. No other baddies on my report.

So I would like to make sense of my profile and do what moves me forward...Any suggestions?

Re: Is it time to go to the Garden???

Ardecko — Sat, 01 Dec 2018 22:03:43 GMT

If you're eyeing a mortgage, yes, you should stop applying for other credit.

I wouldn't close the secured card yet, unless you just need the money back. As long as it's 0 AF, let it keep reporting zero balance.

You're score is being held down by the high utilization on your AX and QS1.

You also have a penalty for brand new accounts. Let them age about 3 months and you should get some of those points back.

If you're paying the QS1 of monthly, you're timing it wrong. Pay it off right before the bill cuts.

If you're focusing on score, pay off the AmEx. Putting a nice little dent in the loans would help as well.

Note: you probably don't actually need to focus on score right now. Focus on paying things that are costing you the most in interest.

Edit: Mortgages use a different score than most credit cards/other accounts. If you don't have a source for those scores, open a DCU savings account and sign up for their free monthly FICO score.

Re: Is it time to go to the Garden???

RonM21 — Sat, 01 Dec 2018 22:40:17 GMT

Welcome!! I think overall, you shouldn't app for anything and put your focus on bringing down your utilization. Right now, that is what stands out as dragging down your current scores. You already have a couple of new accounts as it is. Garden, and try to improve on what you have. Going into the mortgage, I think having as little debt showing as possible would be beneficial for you, as well as you not looking like you are recently seeking credit, which can be looked at as you being a higher risk.

Re: Is it time to go to the Garden???

Anonymous — Sat, 01 Dec 2018 23:55:57 GMT

Certainly stop applying for stuff.

I would not attempt to pay down your loans any faster than you have to. Two of the three mortgage scores don't care about that, and your SL and new car debt are so vast that even if the models considered it like FICO 8 does you would get barely a point for it. Far better would be to save toward your down payment.

The CC debt is a different thing altogether. You should aim to get 99% of that paid off as soon as possible.

It sounds you have some severe derogs associated with your SLs (which explains in part your low score) but which you say have been "cleared up." Does that mean they have been removed from your reports?

When do you hope to buy a house?

Re: Is it time to go to the Garden???

Anonymous — Sun, 02 Dec 2018 01:08:14 GMT

Thank you for the replies!

1. The Secured Card does carry an Annual Fee. It was my first card in the rebuild when I was in graduate school a few years ago.

2. The SLs have been brought current but the derog is still present on my report.

We were hoping to look at something around this time next year but again I am realistic.

I appreciate your thoughts.

Re: Is it time to go to the Garden???

Anonymous — Sun, 02 Dec 2018 02:01:46 GMT

When do you think you could get all your CC debt paid off? What you ideally want is all cards reporting zero except one, with the remaining card reporting a small positive balance.

During what month is the annual fee for the secured card typically billed? And how much is that fee?

Re: Is it time to go to the Garden???

Anonymous — Sun, 02 Dec 2018 03:51:00 GMT

@CreditGuyinDixie

The annual fee is charged in June of each year. It is $35.

The two smaller cards I could take care of in 30-60 days.

The AM Ex would probably be about six months.

Does it make any sense to transfer balances to the new NFCU card?

Re: Is it time to go to the Garden???

Ardecko — Sun, 02 Dec 2018 05:22:06 GMT

It probably makes sense if you're paying interest in the AmEx right now.

The limit being twice as big on the nfcu also means it would be less percentage used, so you'd probably gain a few points on 08. I don't know on the mortgage scores.

Edit: keep the secured until May, then. 😁

Re: Is it time to go to the Garden???

10022016 — Sun, 02 Dec 2018 05:36:34 GMT

I've been gardening since October 2015.

YOU CAN DO IT TOO!

Re: Is it time to go to the Garden???

Anonymous — Sun, 02 Dec 2018 05:48:37 GMT

Ardecko is right that you should not be in any hurry to close that card since the fee is not due for a while. I might even consider paying the fee in June one last time just to have an extra zero-balance open credit card when it comes time to buy the house. The mortgage scoring models like it when you have exactly one card reporting a positive balance and at least a few more cards with zero balances.

Does the NFCU card have a 0% promotion running?

Your top priorities should be (in order):

(1) Never being late on any payment

(2) Always paying $2 more than the minimum payment on every card -- never pay only the MP.

(3) Paying down all cards to under 87% (each card considered by itself).

(4) Paying down all cards to under 67% (each card considered by itself).

(5) Paying down all cards to under 47% (each card considered by itself).

After you achieve #5 you can think about paying cards down to zero. But not until then. Achieving #3 and #4 are especially important.

Your eventual goal should be to have all cards reporting $0 with one card reporting a small positive balance.

After you have achieved #5 (and the new balances have appeared on all three reports) you should begin trying to get the SL derogs removed. The technique you should try is the Goodwill Letter Saturation Technque. I would not begin trying that until your CC balances are much lower, though.

Re: Is it time to go to the Garden???

Anonymous — Sun, 02 Dec 2018 13:17:38 GMT

This is exactly the type of information that I was looking for. Thank you so much! To the garden I go!

Re: Is it time to go to the Garden???

Anonymous — Sun, 02 Dec 2018 13:46:00 GMT

Best of luck. :-)

PS. If you can delay your mortgage pre-approval until all your accounts are > 12 months old, you will get a scoring boost for so doing that. All FICO models like it when all your accounts are over a year old. If even one account is under 12 months of age, you won't get the boost for crossing the 12 month mark.

That strategy will also help you because any inquiry becomes unscorable after 12 months, although it still appears on the report. Thus waiting until all accounts are > 12 months old will cause FICO to view you as having zero inquiries. Age of Youngest Account and Number of Inquiries are separate scoring factors, so you'll get a double bonus by staying in the garden for over 12 months prior to the mortgage pre-app.

Your Average Age of Accounts (AAoA) is yet a third scoring factor that will be helped by staying in the garden, though in that case there's not a precise benefit of crossing the 12 month mark.

Re: Is it time to go to the Garden???

Anonymous — Sun, 02 Dec 2018 13:47:26 GMT

It is always time to garden - LOL