topic Re: Stuck. What else can I do before buying a house to raise my score? in General Credit Topics

Stuck. What else can I do before buying a house to raise my score?

Anonymous — Thu, 10 Dec 2020 00:16:12 GMT

Hi guys new here!

I currently have a 735 score.

I only have 2 credit cards one with 500 one with 3000. Balance is zero since i pay the bill every month.

I have a car loan never been late

And one normal personal loan never been late half done with it

I know the easy answer is to apply for another credit card but isn't that a No-No before buying a house because it looks like you're desperate for more credit? I know the age of accounts will go down as well as another hard inquiry I have one other hard inquiry on my report from one year ago for a credit card any tips or ideas on what I should do?

Re: Stuck. What else can I do before buying a house to raise my score?

flexin222 — Thu, 10 Dec 2020 00:57:44 GMT

Hey Gp, you guessed right in my opinion. If you're about to go for a house I wouldn't pick up any new credit cards. Your credit score is good enough, but if you want a higher score for a lower APR I'd pay em down to AZEO and chill. Depends on how many months till you get it. Plus if you get more credit cards, it's gonna affect your Fico score and lower your age of credit and god knows what else. Good luck on the house!

Re: Stuck. What else can I do before buying a house to raise my score?

Anonymous — Thu, 10 Dec 2020 01:01:57 GMT

A few points:

1 - Under no circumstance should be apply for any credit leading up to your mortgage app.

2 - You referenced a single score, but didn't say which scoring model it came from. Your focus should be on your mortgage scores.

3 - If you have two CCs, you want to report a small ($5-$20) balance on one of them each cycle while the other reports $0. If you are reporting $0 on both you are missing out on Fico points.

Re: Stuck. What else can I do before buying a house to raise my score?

Anonymous — Thu, 10 Dec 2020 02:22:53 GMT

So one credit card keep at 0

And the other one charge 20 bucks or so a month? And pay it off? Or leave 20 as a balance?

Also is there anything else i can do to raise my score?

Experian score is what i originally reported

Re: Stuck. What else can I do before buying a house to raise my score?

Anonymous — Thu, 10 Dec 2020 04:02:44 GMT

@Anonymous wrote:
So one credit card keep at 0

And the other one charge 20 bucks or so a month? And pay it off? Or leave 20 as a balance?

Also is there anything else i can do to raise my score?

Experian score is what i originally reported

Use both all you want. Pay off one before the statement cuts, so it cuts with a $0 balance. Pay the other down to $10 or so, let it report. Once it does, pay it off to avoid interest, then rinse and repeat.

That Experian score is good but which Experian score is it? FICO 8? Auto-enhanced? Bankcard? Etc - there are a lot of scores from each bureau - what you need to pull are your mortgage scores. They can be spot-on with your others, or can diverge wildly. They're the ones you need to know for your home-buying process.

Re: Stuck. What else can I do before buying a house to raise my score?

Anonymous — Thu, 10 Dec 2020 04:38:01 GMT

@Anonymous wrote:

Also is there anything else i can do to raise my score?

Tough to tell without knowing the rest of your profile data. What are your age of accounts factors? How many inquiries per bureau have you had in the last 12 months?

Re: Stuck. What else can I do before buying a house to raise my score?

Anonymous — Fri, 11 Dec 2020 16:07:49 GMT

not sure who your cards are with but what about asking for a credit line increase WITHOUT having a hard inquiry on your credit reports. (AMEX & Citi typically don't do a hard inquiry for credit line increase but definetly ask the lender before to be 100% sure). WIth higher credit limits on existing accounts that will increase your credit utilization which makes up 30% of a credit score.

another option is having a family member with perfect credit to add you on as an authorized user on a card which exceptional payment history and a high credit limit depending on the FICO model this will also increase your credit score

Re: Stuck. What else can I do before buying a house to raise my score?

Anonymous — Fri, 11 Dec 2020 16:41:23 GMT

@Anonymous wrote:

WIth higher credit limits on existing accounts that will increase your credit utilization which makes up 30% of a credit score.

another option is having a family member with perfect credit to add you on as an authorized user on a card which exceptional payment history and a high credit limit depending on the FICO model this will also increase your credit score

A couple of corrections on your overall good points above. First, higher credit limits increase available credit which then lowers credit utilization assuming balances don't change.

Second regarding the AU account addition, there are 3 things you'd want to see from that account. First, that it's clean. Second, that it's at low utilization. Third, that it's old; the older it is than the OPs oldest account the better. Whoever provides the AU account doesn't have to have perfect credit, they just need that single account to be perfect with respect to those 3 factors since that's all that would land on OPs CR.

Re: Stuck. What else can I do before buying a house to raise my score?

SouthJamaica — Fri, 11 Dec 2020 20:16:43 GMT

@Anonymous wrote:
Hi guys new here!

I currently have a 735 score.

I only have 2 credit cards one with 500 one with 3000. Balance is zero since i pay the bill every month.

I have a car loan never been late

And one normal personal loan never been late half done with it

I know the easy answer is to apply for another credit card but isn't that a No-No before buying a house because it looks like you're desperate for more credit? I know the age of accounts will go down as well as another hard inquiry I have one other hard inquiry on my report from one year ago for a credit card any tips or ideas on what I should do?

No you should not apply for anything!!!!

The "easy answer" is let one of your 2 cards report a small balance each month -- it can be as little as $10 or so -- then pay it off after the reporting date.

Usually the statement date is the reporting date, but we would need to know who your lenders are to confirm.

Re: Stuck. What else can I do before buying a house to raise my score?

Anonymous — Fri, 11 Dec 2020 23:10:43 GMT

@Anonymous wrote:
@Anonymous wrote:

WIth higher credit limits on existing accounts that will increase your credit utilization which makes up 30% of a credit score.

another option is having a family member with perfect credit to add you on as an authorized user on a card which exceptional payment history and a high credit limit depending on the FICO model this will also increase your credit score
A couple of corrections on your overall good points above. First, higher credit limits increase available credit which then lowers credit utilization assuming balances don't change.

Second regarding the AU account addition, there are 3 things you'd want to see from that account. First, that it's clean. Second, that it's at low utilization. Third, that it's old; the older it is than the OPs oldest account the better. Whoever provides the AU account doesn't have to have perfect credit, they just need that single account to be perfect with respect to those 3 factors since that's all that would land on OPs CR.

Thanks that's what I meant LOWER not higher

Re: Stuck. What else can I do before buying a house to raise my score?

Anonymous — Wed, 23 Dec 2020 07:37:51 GMT

Yes what would be the perfect remedy to your situation is an authorized user account being added with a clean history and low utilization, regardless of age as long as it’s over a year old, because that will give you points for your third card.

Re: Stuck. What else can I do before buying a house to raise my score?

Anonymous — Wed, 23 Dec 2020 07:42:57 GMT

@Anonymous wrote:
A few points:

1 - Under no circumstance should be apply for any credit leading up to your mortgage app.

2 - You referenced a single score, but didn't say which scoring model it came from. Your focus should be on your mortgage scores.

3 - If you have two CCs, you want to report a small ($5-$20) balance on one of them each cycle while the other reports $0. If you are reporting $0 on both you are missing out on Fico points.

@Anonymous I can't fully agree with your first statement. Well it's true 98% of the time, not always.

I have helped members here who's only choice was to grab another card to increase their score in order to get their house. There was no other way to increase their score.

Theres an LO on here that comes to help customers and gets advice from everyone and they have approved plenty of mortgages with recent accounts. They do it all the time.

So while that's a mantra around here, it's not really true that lenders won't approve you with recent accounts. Now, there are a lot of lenders that won't, but there are plenty that still will.

now that's not to say that I recommend anyone doing so unless they were in certain particular circumstances where it would increase their score. For most people, it would decrease their score and be a liability, but there are particular situations where it will improve Score.

Re: Stuck. What else can I do before buying a house to raise my score?

Anonymous — Wed, 23 Dec 2020 15:30:02 GMT

I don't disagree that there can be exceptions, but they are few and far between. 9 times out of 10 those that we see asking about improving their mortgage scores leading up to an app are not ones that can afford to give up points. I mean, the entire point of their thread is how to raise scores. And, most of the time adding new accounts won't raise scores. And yes, plenty of people can open new accounts just prior to a mortgage, especially those with rock-solid clean/thick/aged files. But again, those are rarely the people that are posting about how to raise their mortgage scores just prior to an app.

Re: Stuck. What else can I do before buying a house to raise my score?

Anonymous — Wed, 23 Dec 2020 19:39:14 GMT

No these weren’t rocksolid files at all as a matter fact they were dirty and they still didn’t care about the new accounts and still got mortgages approved regularly.

But you’re right, 98% of the time it’s not a good idea, but if they’re already in a new account scorecard, not on an average age threshold and have < 3 cards, it’s just what the doctor ordered.

I need to try to find the thread for you when I’ve got extra time; there’s a good thread where we talked about it.

Re: Stuck. What else can I do before buying a house to raise my score?

Anonymous — Wed, 23 Dec 2020 21:40:34 GMT

Cool I look forward to checking it out.

Re: Stuck. What else can I do before buying a house to raise my score?

Anonymous — Fri, 25 Dec 2020 22:14:06 GMT

BBS Matter fact I’m running around like a chicken with my head cut off so don’t let me forget shoot me a PM and I’ll look it up, that way I’ll have something to remind me.

Re: Stuck. What else can I do before buying a house to raise my score?

Anonymous — Sat, 26 Dec 2020 02:15:08 GMT

@Anonymous wrote:
not sure who your cards are with but what about asking for a credit line increase WITHOUT having a hard inquiry on your credit reports. (AMEX & Citi typically don't do a hard inquiry for credit line increase but definetly ask the lender before to be 100% sure). WIth higher credit limits on existing accounts that will increase your credit utilization which makes up 30% of a credit score.

another option is having a family member with perfect credit to add you on as an authorized user on a card which exceptional payment history and a high credit limit depending on the FICO model this will also increase your credit score

It is also possible that the particular lender discards AU accounts or requests they be removed.

It could also be discarded by the anti-abuse algorithm (does that apply to mortgage scores)?

Regardless, the AU trick doesn't always work in your favor and is not a guarantee, just like adding a mew credit line may or may not help nortgage scores - different reasons why, but still may or may not help in the end. At least AU accounts can be removed, worst case scenario.

Re: Stuck. What else can I do before buying a house to raise my score?

Anonymous — Sat, 26 Dec 2020 04:34:46 GMT

@Anonymous wrote:
@Anonymous wrote:
not sure who your cards are with but what about asking for a credit line increase WITHOUT having a hard inquiry on your credit reports. (AMEX & Citi typically don't do a hard inquiry for credit line increase but definetly ask the lender before to be 100% sure). WIth higher credit limits on existing accounts that will increase your credit utilization which makes up 30% of a credit score.

another option is having a family member with perfect credit to add you on as an authorized user on a card which exceptional payment history and a high credit limit depending on the FICO model this will also increase your credit score
It is also possible that the particular lender discards AU accounts or requests they be removed.

It could also be discarded by the anti-abuse algorithm (does that apply to mortgage scores)?

Regardless, the AU trick doesn't always work in your favor and is not a guarantee, just like adding a mew credit line may or may not help nortgage scores - different reasons why, but still may or may not help in the end. At least AU accounts can be removed, worst case scenario.

@Anonymous no, the anti-abuse portion of the algorithm did not come into being until version 8. Authorized user accounts are counted just like primary accounts for the mortgage scores. They always count full Monty.

That's why AZEO on the mortgage scores is only one card. On version 8 & 9 if you have an authorized user account that's not discounted, you also need a small balance on one of those to optimize. So versions 8 and 9 have a modified AZEO, one primary with a small balance plus one authorized user with a small balance.

So authorized user accounts always count for the mortgage scores. But that doesn't always mean they will be helpful. If they have baddies or high utilization or if you've got 20 open accounts, or certain other situations, it may or may not be good, depending.

I've heard a lot of people discuss lenders possibly not counting authorized user accounts/requiring them to be removed, but I've never actually read a single thread where it's actually happened.

So is it real or some of the inaccurate common wisdom we've been rooting out? I don't know. I can only tell you the general effect on score. I can't tell you what a lender is going to require.

Re: Stuck. What else can I do before buying a house to raise my score?

Anonymous — Sat, 26 Dec 2020 05:34:35 GMT

I don't know the answer regarding AU accounts possibly needing to be removed as a lender requirement, as I have not heard of that just like you. I would think if it was in fact a "thing" though it would only matter with an on the cusp type middle score where the lender felt that AU account could be the make or break factor. Would like to hear from someone that actually ran into the issue though if they're out there.

Re: Stuck. What else can I do before buying a house to raise my score?

randomguy1 — Sat, 26 Dec 2020 06:39:16 GMT

@Anonymous wrote:
I don't know the answer regarding AU accounts possibly needing to be removed as a lender requirement, as I have not heard of that just like you. I would think if it was in fact a "thing" though it would only matter with an on the cusp type middle score where the lender felt that AU account could be the make or break factor. Would like to hear from someone that actually ran into the issue though if they're out there.

Lenders imo want to make the mortgage work. In my particular case, my AU helped me tremendously and put me in top tier.