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2 year Discharge Date coming up and I want to buy a house (653 FICO Score)

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2 year Discharge Date coming up and I want to buy a house (653 FICO Score)


Hi everyone. I need advice, recommendations - whatever I can get. Here's the story.

 

Went bankrupt with my late husband in 2017 (lots of large medical bills and existing cc debt due to previous divorces). Was discharged April 24th, 2018. Lost our house (he was the only one on the mortgage), kept the cars and a small piece of investment property. We moved in with my parents and have been here since the discharge. My husband died in August 2019. It's just me and our two year old now.

 

Since the two year discharge date is coming up at the end of the month, I am hoping to look into purchasing a home. Since my late husband was the only one on the previous mortgage, technically I am a first time home buyer. According to the Experian App, my FICO score is 653. I have two credit cards that I use and pay off. My car is paid for, and the only monthly bills that I can really claim are my cell phone and the electric bill that I pay at my parent's house. I have saved a sizable amount for a down payment. 

 

What steps can I take to bring my score up to a more favorable score? I have been trying for months and can't seem to crack it. Please help. 

 

Thank you all so very much

 

 

8 REPLIES 8
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New Contributor

Re: 2 year Discharge Date coming up and I want to buy a house (653 FICO Score)

Sorry to hear about your late husband, I couldn't imagine. If you can get above 680, you'll be better off, 720 is about the best rate qualification for some lenders it is 740.

 

Keep a small balance on each card like$10. If you have 3+ish months maybe get a 3rd card before looking at mortgage's pre-approvals. Just to have another trade line.

 

It sounds like your DTI ratios will be really good as they're not going to use your phone or utility bills towards DTI. Only payments on your credit report. 

Message 2 of 9
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Senior Contributor

Re: 2 year Discharge Date coming up and I want to buy a house (653 FICO Score)

Actually you'll want to allow a small balance to report on only one card. Use both but pay off one of them to zero before it reports. This method is called AZEO, lots of info that's searchable here. It tends to give one the highest optimization of FICO 8 scores. 

Mortgage scores love zero-balance accounts, the more the better. I have not seen a comparison of gains in F8 scores with one balance reporting vs gains in mortgage scores with no balances reporting, but conventional wisdom here has been to get into AZEO to pretty up your reports.

 

You want to be very careful applying for any credit before a mortgage as you'll have to explain it, and new lines of credit will likely cost you points for the new account and the inquiry. At least six months is recommended but if you can go 12 months with no applications before a mortgage it's better because when your youngest revolving account hits a year of age, it can give you a 15-20 point boost.

 

I wish you the best in your mortgage application and extend condolences as well for the loss of your husband Smiley Sad



Rose Gold NPSL | BCP | Delta Gold | Hilton Surpass | Hilton Honors | PenFed PCR | IT Cash | IT Chrome | GHSFCU Visa Plat | Quicksilver | Target | VS | Home Depot | Lowes | Sams MC | Firestone | Overstock | Kohl’s | 2017 Audi A6 Prestige S-Line





TCL $85,100| Agg. Util under 5%
Message 3 of 9
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Re: 2 year Discharge Date coming up and I want to buy a house (653 FICO Score)


@researchguy996 wrote:

Sorry to hear about your late husband, I couldn't imagine. If you can get above 680, you'll be better off, 720 is about the best rate qualification for some lenders it is 740.

 

Keep a small balance on each card like$10. If you have 3+ish months maybe get a 3rd card before looking at mortgage's pre-approvals. Just to have another trade line.

 

It sounds like your DTI ratios will be really good as they're not going to use your phone or utility bills towards DTI. Only payments on your credit report. 


Having all cards report a balance is a nice ding to your reports. Same applies having no cards report a balance. Plus no apps for a year before a mortgage approval. Not the greatest advice. Read up on the AZEO method on the forums. More than 50% of cards reporting is a ding. All cards major ding.

Message 4 of 9
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Re: 2 year Discharge Date coming up and I want to buy a house (653 FICO Score)


@ImTheDevil wrote:

Actually you'll want to allow a small balance to report on only one card. Use both but pay off one of them to zero before it reports. This method is called AZEO, lots of info that's searchable here. It tends to give one the highest optimization of FICO 8 scores. 

Mortgage scores love zero-balance accounts, the more the better. I have not seen a comparison of gains in F8 scores with one balance reporting vs gains in mortgage scores with no balances reporting, but conventional wisdom here has been to get into AZEO to pretty up your reports.

 

You want to be very careful applying for any credit before a mortgage as you'll have to explain it, and new lines of credit will likely cost you points for the new account and the inquiry. At least six months is recommended but if you can go 12 months with no applications before a mortgage it's better because when your youngest revolving account hits a year of age, it can give you a 15-20 point boost.

 

I wish you the best in your mortgage application and extend condolences as well for the loss of your husband Smiley Sad


Yo @ImTheDevil . What about a SP SSL and pay it down quick. OP didnt mention a installment loan. Theres 20-30 pts. Could go the Self route. OP could explain she got it to raise her scores. Got me thinking. Could work.

Message 5 of 9
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Senior Contributor

Re: 2 year Discharge Date coming up and I want to buy a house (653 FICO Score)

Nothing at all wrong with that in my mind. If there is one available on SP, the points gained for credit mix would likely far outweigh the few points lost for a new account. 



Rose Gold NPSL | BCP | Delta Gold | Hilton Surpass | Hilton Honors | PenFed PCR | IT Cash | IT Chrome | GHSFCU Visa Plat | Quicksilver | Target | VS | Home Depot | Lowes | Sams MC | Firestone | Overstock | Kohl’s | 2017 Audi A6 Prestige S-Line





TCL $85,100| Agg. Util under 5%
Message 6 of 9
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Super Contributor

Re: 2 year Discharge Date coming up and I want to buy a house (653 FICO Score)


@ImTheDevil wrote:

Nothing at all wrong with that in my mind. If there is one available on SP, the points gained for credit mix would likely far outweigh the few points lost for a new account. 


Great minds think alike. Smiley Happy @debbooooo look into a SelfLender loan. Apply 1 month before you app. Then pay it down to 8%. Then apply once you see the score bump from the loan. Thats should get you a 20-30 pt gain.

Message 7 of 9
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Valued Contributor

Re: 2 year Discharge Date coming up and I want to buy a house (653 FICO Score)


@FiresOut wrote:

@ImTheDevil wrote:

Actually you'll want to allow a small balance to report on only one card. Use both but pay off one of them to zero before it reports. This method is called AZEO, lots of info that's searchable here. It tends to give one the highest optimization of FICO 8 scores. 

Mortgage scores love zero-balance accounts, the more the better. I have not seen a comparison of gains in F8 scores with one balance reporting vs gains in mortgage scores with no balances reporting, but conventional wisdom here has been to get into AZEO to pretty up your reports.

 

You want to be very careful applying for any credit before a mortgage as you'll have to explain it, and new lines of credit will likely cost you points for the new account and the inquiry. At least six months is recommended but if you can go 12 months with no applications before a mortgage it's better because when your youngest revolving account hits a year of age, it can give you a 15-20 point boost.

 

I wish you the best in your mortgage application and extend condolences as well for the loss of your husband Smiley Sad


Yo @ImTheDevil . What about a SP SSL and pay it down quick. OP didnt mention a installment loan. Theres 20-30 pts. Could go the Self route. OP could explain she got it to raise her scores. Got me thinking. Could work.


Just an FYI the SSL trick doesn't really work for mortgage scores it is a FICO 08 trick. The new account will likely do more damage than the 0-5 points that the SSL trick will give for MORTGAGE scores. 

Scores hover around 800
Haven't been AZEO in over a year
Rome was not built in a day, neither is a good credit profile
Message 8 of 9
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New Member

Re: 2 year Discharge Date coming up and I want to buy a house (653 FICO Score)

I am nervous applying for a loan even if there is a loophole that will help raise my credit score. Has anyone done this trick before and been successful? I am not great at finances and finance lingo (my husband was better at those things) and so it's daunting to try something that I don't have a guarantee at. Could I get a little more info on the concept/process? 

 

Thank y'all for your patience and suggestions!!!

 

 


@dragontears wrote:

@FiresOut wrote:

@ImTheDevil wrote:

Actually you'll want to allow a small balance to report on only one card. Use both but pay off one of them to zero before it reports. This method is called AZEO, lots of info that's searchable here. It tends to give one the highest optimization of FICO 8 scores. 

Mortgage scores love zero-balance accounts, the more the better. I have not seen a comparison of gains in F8 scores with one balance reporting vs gains in mortgage scores with no balances reporting, but conventional wisdom here has been to get into AZEO to pretty up your reports.

 

You want to be very careful applying for any credit before a mortgage as you'll have to explain it, and new lines of credit will likely cost you points for the new account and the inquiry. At least six months is recommended but if you can go 12 months with no applications before a mortgage it's better because when your youngest revolving account hits a year of age, it can give you a 15-20 point boost.

 

I wish you the best in your mortgage application and extend condolences as well for the loss of your husband Smiley Sad


Yo @ImTheDevil . What about a SP SSL and pay it down quick. OP didnt mention a installment loan. Theres 20-30 pts. Could go the Self route. OP could explain she got it to raise her scores. Got me thinking. Could work.


Just an FYI the SSL trick doesn't really work for mortgage scores it is a FICO 08 trick. The new account will likely do more damage than the 0-5 points that the SSL trick will give for MORTGAGE scores. 




Message 9 of 9
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