topic Re: Would paying down personal loan help Mortgage score? in Mortgage Loans

Would paying down personal loan help Mortgage score?

Anonymous — Wed, 02 Mar 2022 20:46:51 GMT

I only need a few more points to get a better interest rate on a refinance. If I paid extra on my personal loan would that help the mortgage score? Need 5 points.

Re: Would paying down personal loan help Mortgage score?

RSX — Wed, 02 Mar 2022 21:21:29 GMT

depends on what the loan percentage currently is

if you are above 50%, then paying it down to 47% could get you some points

for that matter, check all accounts and see if their % is optimized

i did this in preparation for my Auto Loan - got all accounts under 50% for 2 months prior, even if it cost me some interest short term, it helped me get the lowest rate for my Loan - which is long term

Re: Would paying down personal loan help Mortgage score?

Anonymous — Wed, 02 Mar 2022 21:54:48 GMT

Thanks for the advice!

Re: Would paying down personal loan help Mortgage score?

pizzadude — Thu, 03 Mar 2022 02:57:59 GMT

What does your overall / individual revolving utilization look like? If you can improve this it's usually the fastest route to a FICO score bump.

Re: Would paying down personal loan help Mortgage score?

Anonymous — Thu, 03 Mar 2022 14:39:25 GMT

Credit Usage is 52%

Re: Would paying down personal loan help Mortgage score?

Mortgage-Specialist — Thu, 03 Mar 2022 14:52:18 GMT

I do not see credit score increases from reduced installment balances. You may want to stick to reducing revving account balances and collection PFD's

Re: Would paying down personal loan help Mortgage score?

dragontears — Thu, 03 Mar 2022 15:06:56 GMT

@Mortgage-Specialist wrote:
I do not see credit score increases from reduced installment balances. You may want to stick to reducing revving account balances and collection PFD's

This

Loan utilization is a score factor for FICO8 not mortgage scores.

Focus on revolving utilization

Re: Would paying down personal loan help Mortgage score?

RSX — Thu, 03 Mar 2022 17:29:51 GMT

@dragontears @Mortgage-Specialist

Thanks for your responses on the Installment loans not being a mortgage score factor - i will keep this in mind for future advice