topic Re: My dream house is up for sale! How do I boost my credit score quickly? in Mortgage Loans

My dream house is up for sale! How do I boost my credit score quickly?

thathouseismine — Wed, 28 Jun 2023 16:05:07 GMT

Hey Everyone,

The house just a few miles from my apartment is up for sale and it has been my dream home. I have enough money to make the downpayment but my credit scores are not that great. How do I boost it ASAP? Here is some info:

FICO 8: TU: 631, EX: 690 EQ: 624

FICO 2 Mortgage: EX: 660

1) Education loan: Balance $3449 - Payment deferred

2) Education loan: Balance $4739 - Payment deferred

3) Comenity bank CC: Charge-off

4) Collection account with $233 balance

5) Auto loan: Balance $21965 out of 30869 - current

6) Apple CC: Balance 0 out of 2000

7) Citi CC: Balance 974 out of 7700

8) CapOne CC: Balance 174 out of 2000

9) Citibank CC: Balance 0 out of 4000

10) Macys CC: Balance 539 out of 2100

11) Navy Fed CC: Balance 3445 out of 25000

12) Navy Fed CC: Balance 471 out of 6500

13) Navy Fed CC: Balance 316 out of 25000

14) Furniture Charge card: Balance 0 out of 4000

15) Wells Fargo CC: Balance 477 out of 11000

16) Installment debt consolidation: Balance 2357 out of 3106

Re: My dream house is up for sale! How do I boost my credit score quickly?

ShanetheMortgageMan — Wed, 28 Jun 2023 16:51:51 GMT

If your Equifax & TransUnion mortgage scores are around 660 then that is usually good enough for FHA financing, conventional might even be an option too but would have higher interest rates.

Potential ways to boost your scores are: doing a pay-for-delete or paying the charge-off off (especially if it's reporting a late payment each month), doing a pay-for-delete on the collection account, following the AZEO method and paying off all credit cards except leaving a small balance on one of them, and visiting the Rebuilding Your Credit and Understanding FICO® Scoring sections as you probably will get better score improvement advice in those parts of the forums.

Re: My dream house is up for sale! How do I boost my credit score quickly?

VAMortgageGuy — Wed, 28 Jun 2023 20:35:38 GMT

Look at the collection account and the charge off. If those accounts are reporting every month, they will act like a lid on scores.

On the collection, you want to negotiate a pay for delete. Don't try to settle for less money. Your only goal is to get the account deleted.

On the charge off, you can negotiate the pay off because your goal is to update the account from charged off to paid, zero balance.

Does that make sense?

Re: My dream house is up for sale! How do I boost my credit score quickly?

Yumsetti — Fri, 30 Jun 2023 20:40:12 GMT

Hello -

Have you figured out your DTI ratio yet? Since you have a Navy Federal Credit account, does that mean you're in the military and/or qualify to get a VA loan? VA loans don't have minimum qualifying credit scores but approval is based on a review by the lender.

Is your charge off #3 in collections? If so, getting that and #4 paid off would be my first move.

Second, based on your DTI, debt to income ratio, I would focus on paying down whatever credit cards will impact your monthly debt minimums to bring you under a 41% DTI which would include your future mortgage payment.

I'm too lazy to add up your credit utilization, but under 20% would be a good start and getting as low as possible would be ideal.

Deferred loans aren't a deal breaker, but lenders can include a .5% of total due as future monthly payment of those loans ypu have.

I think your best bet would be to research Realtors or mortgage lenders in your area and ask them as well. A lender can at least counsel you based on the information you provide without pulling a hard credit inquiry.