topic Re: Trying to Buy a Home FICO Help!! in Mortgage Loans

Trying to Buy a Home FICO Help!!

Anonymous — Sat, 17 Apr 2021 00:37:50 GMT

Ok so here is the situation, any help would be immensly appreciated!!

I am looking to buy a home in California, however my FICO score is 640 average across all (3) boards, my wife's is 620. This is using the FICO8 score, I just paid off $5k in collections we had for medical debt after a surgery I had two years ago, we now have zero in collections, will our scores go up fast, and how much will it go up? We have 5 credit cards and only 2 have balances and they are under the 30% rule. My wife has only been working for a year because she was finishing school, but I have been steadily working for over 25 years, will this affect us as well? Or because I am the primary on the loan and she is the co-applicant does that help? A mortgage broker told me she could do a re-score to see how much it has gone up, but does that happen instantly? Can the mortgage broker help get my score up? The total balance on my credit cards is $3k, should I pay it off and have a zero balance?

Re: Trying to Buy a Home FICO Help!!

AllZero — Sat, 17 Apr 2021 02:36:38 GMT

Not knowing your exact details, below are benchmarks for FICO 8. Scores lenders use for mortgage are EX2, TU4, EQ5; should react similarly.

Remember these aggregate utilization thresholds: 9%, 29%, 49%, 69%, 89%
Remember these individual utilization thresholds: 29%, 49%, 69%, 89%

If you're not crossing a threshold, you won't be getting points.

Look into AZEO Technique. All Zero Except One card reporting a small balance e.g. ~$10 or at least between 1-4.5% aggregate utilization. Use a bank card. Do not use a store or charge card.

You might want to address any derogatory you have; delinquency, charge off, collection, etc. If they are updating monthly, it'll keep your scores suppressed.

Re: Trying to Buy a Home FICO Help!!

AllZero — Sat, 17 Apr 2021 00:43:50 GMT

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, pub.5.17.20

Re: Trying to Buy a Home FICO Help!!

Anonymous — Sat, 17 Apr 2021 02:06:43 GMT

I have no idea what you just wrote but here are my particulars:

My credit score is 640, all of my derogotory accounts were paid off last week which totalled $4k, I have 5 credit cards and 3 of them have a zero balance and two of them which have a credit limit of $5k each have just been paid down to under $1,500. How much will my credit go up?

My wife has a 620 score and she had the same items in collection and the same credit cards, how much will her credit go up?

Re: Trying to Buy a Home FICO Help!!

AllZero — Thu, 22 Apr 2021 05:46:32 GMT

@Anonymous wrote:
I have no idea what you just wrote but here are my particulars:

My credit score is 640, all of my derogotory accounts were paid off last week which totalled $4k, I have 5 credit cards and 3 of them have a zero balance and two of them which have a credit limit of $5k each have just been paid down to under $1,500. How much will my credit go up?

My wife has a 620 score and she had the same items in collection and the same credit cards, how much will her credit go up?

TL;DR To fully optimize your credit report, you want only 1 card to report a balance. Not to exceed $100 reporting. If you are not in the position to pay it down that much, then only 1 card should be reporting less than 29% utilization, e.g. $1,450 balance on that $5,000 credit limit card.

Unknown where you scores will go. Were the collection(s) deleted or will they delete after you paid them? If they are deleted, I would imagine your scores will go up. If not deleted, is it reporting $0 balance?

There is a score penalty if you are over the threshold of accounts with balances somewhere around ~25%. If at 2/5 revolving accounts (CC Credit Cards) are reporting a balance, you are at 40% of accounts reporting a balance. The older scoring models, e.g. EX2, TU4, EQ5 are sensitive to that. You want 1/5 which is 20%. That should put you under the threshold.

Amount of debt or utilization is a large factor in your score. If you can reduce your utilization as noted in the first paragraph, then you will see additional score increases.

Re: Trying to Buy a Home FICO Help!!

AllZero — Sat, 17 Apr 2021 02:40:54 GMT

@Anonymous wrote:
The total balance on my credit cards is $3k, should I pay it off and have a zero balance?

You don't want to report all zero balance. You actually lose points for that. Optimally, you want to report a balance not to exceed $100.

Re: Trying to Buy a Home FICO Help!!

AllZero — Sat, 17 Apr 2021 02:50:20 GMT

@Anonymous wrote:
however my FICO score is 640 average across all (3) boards, my wife's is 620. This is using the FICO8 score

You want to obtain your mortgage scores. e.g. EX2, TU4, EQ5.

Free mortgage scores

EX2 + 3 Bureau FICO 8 scores and reports for free or $1 at Experian or CreditCheckTotal (part of Experian). Cancel in 7 days or less to avoid the reoccurring charge.

TU4 WyHy quarterly score. Not sure on membership requirement. Maybe hard pull TU?

EQ5 Get a savings account with DCU. Soft pull EQ to be a member. Free monthly score.

You can also obtain your 3 bureau mortgage scores at . Cancel plan after you obtain your scores and reports to avoid re-occurring monthly charge.

Re: Trying to Buy a Home FICO Help!!

Anonymous — Sat, 17 Apr 2021 05:09:19 GMT

So your telling me there's a chance?

@AllZero wrote:
@Anonymous wrote:
I have no idea what you just wrote but here are my particulars:

My credit score is 640, all of my derogotory accounts were paid off last week which totalled $4k, I have 5 credit cards and 3 of them have a zero balance and two of them which have a credit limit of $5k each have just been paid down to under $1,500. How much will my credit go up?

My wife has a 620 score and she had the same items in collection and the same credit cards, how much will her credit go up?
TL;DR To fully optimize your credit report, you want only 1 card to report a balance. Not to exceed $100 reporting. If you are not in the position to pay it down that much, then only 1 card should be reporting less than 29% utilization, e.g. $1,450 balance on that $5,000 credit limit card.

Unknown where you scores will go. Where the collection(s) deleted or will they delete after you paid them? If they are deleted, I would imagine your scores will go up. If not deleted, is it reporting $0 balance?

There is a score penalty if you are over the threshold of accounts with balances somewhere around ~25%. If at 2/5 revolving accounts (CC Credit Cards) are reporting a balance, you are at 40% of accounts reporting a balance. The older scoring models, e.g. EX2, TU4, EQ5 are sensitive to that. You want 1/5 which is 20%. That should put you under the threshold.

Amount of debt or utilization is a large factor in your score. If you can reduce your utilization as noted in the first paragraph, then you will see additional score increases.

Re: Trying to Buy a Home FICO Help!!

AllZero — Sat, 17 Apr 2021 05:15:26 GMT

@Anonymous wrote:
So your telling me there's a chance?

Yes, there is always a chance if you make it possible.

Re: Trying to Buy a Home FICO Help!!

4sallypat — Sat, 17 Apr 2021 17:05:17 GMT

@Anonymous wrote:
....... mortgage broker told me she could do a re-score to see how much it has gone up, but does that happen instantly? Can the mortgage broker help get my score up? The total balance on my credit cards is $3k, should I pay it off and have a zero balance?

Yes, a good mortgage broker can help tremendously with scores - last year at the start of the pandemic, we were around 660-680 scores but the mortgage broker has us concentrate on only the major card company balances (Chase, Citi, Barclays, BofA, Amex) and not to worry about the store cards, Synchrony, Comenity, etc...

Lo and behold, by paying those cards down to below 10%, utilization & paying off a car loan early, our scores jumped to the mid 700s today.

Just yesterday, we got our persistent mortgage broker to do a hard pulled desktop UW pre approval for $600,000 loan at under 3% with a median EX2 FICO score of 715.

Hats off to this mortgage broker who knew exactly what to pay off !

Today we are home shopping in Southern Calfiornia - heart of the super crazed housing prices!

Going to be shocked I am sure according to our realtor!

Re: Trying to Buy a Home FICO Help!!

Anonymous — Tue, 20 Apr 2021 03:04:37 GMT

I just received a letter from Amerisave with the following credit scores:

Equifax Beacon® 5.0 (609)
Experian®/Fair Isaac Risk Model V2SM (641)
TransUnion FICO® Risk Score, Classic 04 (633)

Now just last Friday I paid off (9) accounts I had in collections and Rash Curtis and Assoc. Sent me the PFD letter after my payment cleared. They also told me they would report to all (3) credit Bureus on April 25 to be deleted. So will my credit go up tremendously? I will no longer have any accounts in collections and my credit cards were all paid down and are all under the 30% threshold. The guy at Rash Curtis told me he believes my credit will go up by as much as 50 points?

Re: Trying to Buy a Home FICO Help!!

AllZero — Tue, 20 Apr 2021 03:28:14 GMT

@Anonymous wrote:
I just received a letter from Amerisave with the following credit scores:
Equifax Beacon® 5.0 (609)
Experian®/Fair Isaac Risk Model V2SM (641)
TransUnion FICO® Risk Score, Classic 04 (633)
Now just last Friday I paid off (9) accounts I had in collections and Rash Curtis and Assoc. Sent me the PFD letter after my payment cleared. They also told me they would report to all (3) credit Bureus on April 25 to be deleted. So will my credit go up tremendously? I will no longer have any accounts in collections and my credit cards were all paid down and are all under the 30% threshold. The guy at Rash Curtis told me he believes my credit will go up by as much as 50 points?

What MMS are you trying to achieve?

Excluding the collection, if any, what other derogatory or delinquency do you have, e.g. charge off, 30, 60, 90, 120, day lates?

ETA When your scores were pulled, did it reflect the paid off, paid down accounts? Or those accounts have not reported yet?

Re: Trying to Buy a Home FICO Help!!

Anonymous — Tue, 20 Apr 2021 03:47:17 GMT

No other charge offs or delinquency on my report, everything will be up to date. My credit was pulled on April 13, and my collection accounts will be deleted by April 25 when Rash Curtis send the month end to the credit bureaus. I am trying to get a score close to 700 so my interest rate stays low.

Re: Trying to Buy a Home FICO Help!!

AllZero — Tue, 20 Apr 2021 03:59:43 GMT

@Anonymous wrote:
No other charge offs or delinquency on my report, everything will be up to date. My credit was pulled on April 13, and my collection accounts will be deleted by April 25 when Rash Curtis send the month end to the credit bureaus. I am trying to get a score close to 700 so my interest rate stays low.

Based on the pull date, I would guess your scores will increase once the updated revolving accounts are reported as paid down/off in the addition of the collection removal.

You have a lot of moving parts. I hope you get your goal score.

Re: Trying to Buy a Home FICO Help!!

Anonymous — Tue, 20 Apr 2021 04:14:31 GMT

Thank you so much for your advice! The only thing that really bothers me is that I had to put in a dispute for NELNET, my wife's school loans. I had to actually put down COVID as a reason payments stopped. Somebody also told me I could also buy points to lower my interest rate, I do not want to go down that road.

@AllZero wrote:
@Anonymous wrote:
No other charge offs or delinquency on my report, everything will be up to date. My credit was pulled on April 13, and my collection accounts will be deleted by April 25 when Rash Curtis send the month end to the credit bureaus. I am trying to get a score close to 700 so my interest rate stays low.
Based on the pull date, I would guess your scores will increase once the updated revolving accounts are reported as paid down/off in the addition of the collection removal.

You have a lot of moving parts. I hope you get your goal score.

Re: Trying to Buy a Home FICO Help!!

4sallypat — Tue, 20 Apr 2021 14:58:17 GMT

Try Better Mortgage - they are all online, will do a FannieMae UW and they will make an offer with varying amounts of interest and points.

Yes, student loans can be cumbersome - my wife is paying 0.25% each month but the mortgage lender sees it as a 1% debt.

If we didn't have that student loan, we would qualify for over $750,000 in So Cal !

Re: Trying to Buy a Home FICO Help!!

Anonymous — Tue, 20 Apr 2021 21:32:55 GMT

@4sallypat wrote:
Try Better Mortgage - they are all online, will do a FannieMae UW and they will make an offer with varying amounts of interest and points.

Yes, student loans can be cumbersome - my wife is paying 0.25% each month but the mortgage lender sees it as a 1% debt.
If we didn't have that student loan, we would qualify for over $750,000 in So Cal !

I live in Northern California, I need at least a $1.2 Million loan to buy a $1.6 million house. I will be putting down about $480K from the proceeds I get for selling my current home, I have about $600K in equity and I have been in my home for 18 years and never taken a HELOC. With so much down does that help? It will be close to 40% down, I'm just worried about our credit scores, my wife and I are in the 625 to 640 range but we just paid off everything in collections and we got our PFD letter yesterday confirming the deletion of the accounts which will take place on April 25. Hopefully our scores go up tremendously, I make $180K a year and my wife makes $75K a year so we should hopefully qualify. We have no credit cards with a balance over $1k and they all have a $5k credit limit, total of (5) and only two of them have the $1k balance. My wife's school loan is for $45k as she was going to nursing school so that could be a hindrence.

Re: Trying to Buy a Home FICO Help!!

Anonymous — Thu, 22 Apr 2021 02:08:22 GMT

@4sallypat wrote:
@Anonymous wrote:
....... mortgage broker told me she could do a re-score to see how much it has gone up, but does that happen instantly? Can the mortgage broker help get my score up? The total balance on my credit cards is $3k, should I pay it off and have a zero balance?
Yes, a good mortgage broker can help tremendously with scores - last year at the start of the pandemic, we were around 660-680 scores but the mortgage broker has us concentrate on only the major card company balances (Chase, Citi, Barclays, BofA, Amex) and not to worry about the store cards, Synchrony, Comenity, etc...

Lo and behold, by paying those cards down to below 10%, utilization & paying off a car loan early, our scores jumped to the mid 700s today.

Just yesterday, we got our persistent mortgage broker to do a hard pulled desktop UW pre approval for $600,000 loan at under 3% with a median EX2 FICO score of 715.

Hats off to this mortgage broker who knew exactly what to pay off !

Today we are home shopping in Southern Calfiornia - heart of the super crazed housing prices!

Going to be shocked I am sure according to our realtor!

Congratulations!! Hope you buy the home of your dreams! We just paid off (9) accounts in collections and received the PFD letter from Rash Curtis, and my credit cards (2) were paid down to below 10%, my score was 625 when I checked this morning, how much will it go up?

Re: Trying to Buy a Home FICO Help!!

Pmveezy — Thu, 29 Apr 2021 06:40:57 GMT

Hello, are you able to share who you went through for your loan? We are also looking here in SoCal.