topic Re: Need to Increase Mortgage scores 100 points in Mortgage Loans

Need to Increase Mortgage scores 100 points

Harmony12 — Mon, 07 Sep 2020 04:51:13 GMT

How do I raise my mortgage scores 100 points in less than 9 months? I am wanting to purchase (possible new construction) and close by July 2021.

My current mortgage scores FICO 5,4,2 are: 609, 620, 607. I would like to have bring all of my scores up by a minimum 100 points.

Data points

80% utilization

10 30 day lates

10 60 day lates

some 90/120 day lates

45 total lates and/or delinquency accounts

6 Total Charged off acounts

4 charge offs - $0 balance

1 charge off CC - 3438/4000 - monthly payments being made and CR updates monthly on EX and EQ

1 charge off (old auto loan) - 4031/15000 hasn’t updated in 1 year; not making payments

8 credit card accounts

1 CLOC -$500

1 auto loan 13783/19486

$65k student loans

Inquiries

EQ - 5

TU - 2

EX - 1

Re: Need to Increase Mortgage scores 100 points

AllZero — Sat, 05 Sep 2020 22:47:55 GMT

AZEO to reduce your reported utilization shall give you some score relief.

Aggregate 1-9% utilization

Individual 1-29% utilization.

I would recommend reading the below from ABCD2199
The Truth about Credit Card Utilization
My 11 Rules to Credit Rebuilding
FICO Score: What to pay down first?

From Birdman7
General Scoring Primer and Version 8 Master Thread rev.5.17.20

Re: Need to Increase Mortgage scores 100 points

Anonymous — Sun, 06 Sep 2020 05:55:23 GMT

Pay off everything you can, and leave only a small balance on one bank card. Your utilization is killing you. Mortgage scores love zero-balance accounts, so the more you can pay off the better. Try goodwill letters on those lates as well, and if you have some unpaid items in collections, try for PFD agreements to clean things up.

What you can accomplish comes down to dedication to a plan, how much money you can put toward this stuff, and a little luck.

Re: Need to Increase Mortgage scores 100 points

Harmony12 — Mon, 07 Sep 2020 05:27:59 GMT

@Anonymous Luckily, I have 0 collections accounts now. My installment accounts have 100% on time payments. And only 2 of CC have 100% on time payments. I haven’t had a late payment in 2 years (finished school). Okay, I will pay down my CC using the AZEO method. Do you think that will get me 100 point mortgage score boost?

My open CC with lates are with Comenity and Capital One. Do you think I will have success with goodwill letters?

Re: Need to Increase Mortgage scores 100 points

NC_Mtg_Loaner — Sun, 06 Sep 2020 17:53:36 GMT

HOw many months hx do you have of paying those student loans.

I have found that student loans can be the anchor keeping one's score in the low 600's until there is sufficient hx of paying them on time--I've just never learned about that "magic #" that is the amount of time required for scores to be maxed.

Re: Need to Increase Mortgage scores 100 points

Harmony12 — Mon, 07 Sep 2020 05:27:25 GMT

@NC_Mtg_Loaner I have less than a year paying on student loans. What is the magic number?

Re: Need to Increase Mortgage scores 100 points

JVille — Sun, 06 Sep 2020 19:24:18 GMT

Get your REAL Fico Mortgage scores NOT Fico 8. You need to see what lenders see.

Re: Need to Increase Mortgage scores 100 points

Harmony12 — Mon, 07 Sep 2020 05:26:58 GMT

@JVille I posted my current mortgage scores above.

Re: Need to Increase Mortgage scores 100 points

TheKid2 — Mon, 07 Sep 2020 02:55:14 GMT

I assume you mean July 2021 on the new build - not 2 months ago. From my experience, the COs (and 120s) are going to be extremely penal until they fall off. I saw my mortgage scores go from 633, 526, 581 up to 679, 686, 674 in 2 months. But, this was AFTER I had already settled all my outstanding CO balances AND I had paid my existing CCs to AZEO (actually to AZE2, but that's a different story). It took about 2 months for all the reporting to catch-up to my settlements and paying off all my cards. Score wise, all past due CO debt is counted against Util until you settle or pay it off. It's basically like you have an extra maxxed out card factored into your Util - on top of reporting a CO every month. It's super penal.

Once you get the CO paid off and the CCs paid off to AZEO, it's not unreasonable to think you could get high enuogh for a mortgage on new construction. Paying off the CCs also helps your DTI and that is a factor in approval. Let us know how it goes.

Re: Need to Increase Mortgage scores 100 points

Harmony12 — Mon, 07 Sep 2020 05:26:32 GMT

@TheKid2

Yes, July 2021. Haha I went back and edited the date; thank you.

Most of my lates are from fall 2016 - mid 2018. Most of my Charge offs are from early-mid 2018 but are paid off with the exception of two. I don’t see myself paying the charged off auto loan.

Wow! You scores increased that much within 2 months? That’s about an average of 100 points which is right where i’m trying to be. I’m sure I will not get the maximum score benefits because of the old auto loan. I have about $7300 in CC debt including the charged off card. Hoping to get that paid very quickly.

Re: Need to Increase Mortgage scores 100 points

TheKid2 — Mon, 07 Sep 2020 13:21:17 GMT

@Harmony12 wrote:
@TheKid2
Yes, July 2021. Haha I went back and edited the date; thank you.
Most of my lates are from fall 2016 - mid 2018. Most of my Charge offs are from early-mid 2018 but are paid off with the exception of two. I don’t see myself paying the charged off auto loan.

Wow! You scores increased that much within 2 months? That’s about an average of 100 points which is right where i’m trying to be. I’m sure I will not get the maximum score benefits because of the old auto loan. I have about $7300 in CC debt including the charged off card. Hoping to get that paid very quickly.

The scores did go up that much, so I'm here to tell you that it is possible! But, you need to be extremely diligent - in a nutshell you need to not be seeking credit (no inquiries) and pay down the debt you do have.

Best of luck and you should let us know about your progress! You can do it.

Re: Need to Increase Mortgage scores 100 points

Harmony12 — Mon, 28 Sep 2020 13:34:25 GMT

Update

I have paid my CCs off from 80%-90-% utilization to AZEO less than 7%. I even paid in full a charged off Credit card that I had with NFCU that continued to report every month because I made very minimum payments. I am now back in good with NFCU and they asked if I wanted to apply for any products.

I am expecting all of the accounts to update by mid October. I am hoping I can get the 700-720 mid score that I want.

Re: Need to Increase Mortgage scores 100 points

spiritcraft1 — Mon, 28 Sep 2020 13:31:25 GMT

@Harmony12 wrote:
I am now back in good with NFCU and they asked if I wanted to apply for any products.

I wonder what they would say about a Mortgage? I think CU's in general like it when you make them whole again.

Re: Need to Increase Mortgage scores 100 points

Harmony12 — Mon, 28 Sep 2020 13:36:12 GMT

@spiritcraft1 I am not sure. I remember reading somewhere that NFCU mortgages are hard to qualify with a good a credit profile. My over profile has been shaky with lates and chargeoffs.

Re: Need to Increase Mortgage scores 100 points

spiritcraft1 — Mon, 28 Sep 2020 13:38:39 GMT

@Harmony12 wrote:
@spiritcraft1 I am not sure. I remember reading somewhere that NFCU mortgages are hard to qualify with a good a credit profile. My over profile has been shaky with lates and chargeoffs.

I don't know the answer to that either, just a thought about asking. Perhaps another local CU that holds their own paper?

Re: Need to Increase Mortgage scores 100 points

Harmony12 — Mon, 28 Sep 2020 13:42:30 GMT

To be honest at the moment, I haven’t given much thought about the lender as long as I have a great rate and minimal fees. I am most worried about my mortgage scores getting to the 700s right now.

Why do you say a local CU that holds own paper?

Re: Need to Increase Mortgage scores 100 points

spiritcraft1 — Mon, 28 Sep 2020 14:18:18 GMT

@Harmony12 wrote:
To be honest at the moment, I haven’t given much thought about the lender as long as I have a great rate and minimal fees. I am most worried about my mortgage scores getting to the 700s right now.

Why do you say a local CU that holds own paper?

Many do. A local example here is BCU. Their mortgages are held in house.

Re: Need to Increase Mortgage scores 100 points

Harmony12 — Mon, 28 Sep 2020 14:54:12 GMT

@spiritcraft1 @Is there any benefit to it?

Re: Need to Increase Mortgage scores 100 points

spiritcraft1 — Mon, 28 Sep 2020 15:00:33 GMT

@Harmony12 wrote:
@spiritcraft1 @Is there any benefit to it?

They can be more flexible if not selling the note. Theoretically and depending on CU and relationship of course.

Re: Need to Increase Mortgage scores 100 points

TheKid2 — Mon, 28 Sep 2020 19:33:27 GMT

Nice job paying off the debt! As someone with COs also, I am curious if you get to your goal of a 700 middle mortgage score. Even with all my debt paid down to AZEO and the COs paid off, the best I could do was 679 middle score. CO does not appear to factor in how many you have, so would like to know if you see having 1 paid CO as "1 or more" for the older scoring models (like mortgage) and still get to 700.

You most definitely do NOT need a 700 middle score to get a mortgage - in fact, according to my broker the 679 was fine and I breezed through underwriting. Closed 2 months ago. He said I wouldn't have seen a better rate unless I could get to 720, which just wasn't happening with paid COs.

Good luck! Please come back and update us on how you do!