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9 points shy of approval. when to re apply

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Anonymous
Not applicable

9 points shy of approval. when to re apply

I just got denied approval of a home loan. I was 9 points shy of being approved. Im going to get a secured credit card to show a new line of credit and it will drop our credit usage from 17% to around 10%. When would be a good time to reapply?
Message 1 of 13
12 REPLIES 12
tufa4311
Established Contributor

Re: 9 points shy of approval. when to re apply


@Anonymous wrote:
I just got denied approval of a home loan. I was 9 points shy of being approved. Im going to get a secured credit card to show a new line of credit and it will drop our credit usage from 17% to around 10%. When would be a good time to reapply?

Is the secured card going to require a hard inquiry? If so, you'll loose point for that. In addition, you'll lower your AAoA which also can cause a loss of points.

 

As for when would be a good time to re-apply, that would be when your credit score is at the minimum requirement. Do you get free FICO's? While it won't be the same scores as pulled by the mortgage guys it shold be close.

796 TU FICO 08 (08/2018)
758 TU FICO 08 (01/12/2016)
753 TU FICO 08 (11/21/2015)
740: EQ Score Power (Beacon 5.0) FICO 04 (01/23/2015)
755 TU FICO 08 (01/21/2015)
652 TU Lender Pull (06/10/2014)
665 TU FICO 08 (05/21/2014)
Goal: 800+
Message 2 of 13
Anonymous
Not applicable

Re: 9 points shy of approval. when to re apply

Lower util and wAtch your score go up. I lowered it 20% and went up 50 points.
Message 3 of 13
Anonymous
Not applicable

Re: 9 points shy of approval. when to re apply

If you have less than 3 accounts you MAY not necessarily take the ding for anew account, however, it would be a simpler more elegant solution to just take the money you were going to use for the secured card and pay down the accounts.

Message 4 of 13
Anonymous
Not applicable

Re: 9 points shy of approval. when to re apply

Basically my history consists of a few negatives that have all been paid in full and marked as so. Only thing i have going for me is being an authorized ussr on my wife's card. Within 4 months i have boosted my credit over 100 points. I was going off creditsesame. The score they give me transunion and is about 30 points higher than my experian i believe it was. So when they averaged out my 3 i was 9 points shy. As for the credit card being a hard pull i will have to ask. I just know that they report to all three which is what i need to bring up my other 2 scores. This is the only route i can think of.
Message 5 of 13
StartingOver10
Moderator Emerita

Re: 9 points shy of approval. when to re apply

First, congratulations on taking care of the negative items.

 

What you need to do now is to get one or two credit cards that are in your name to increase your score. Ideally you would have 3 cards in your name, that will give you the most bang for your buck.

 

Check Capital One first before you try for a secured card. 

 

As to your comments on the mortgage scores, you used the term 'average'.  The lender doesn't average your 3 scores, they choose the middle score. The mortgage lender only uses FICO mortgage scores which you can get here as a soft pull.  The scores from creditsesame are nothing like the FICO mortgage scores at all so don't even look there.

 

Yes credit cards are a hard pull...usually.  There are a couple of secured cards talked about on this board that are not hard pulls, I will see if I can find them for you.

Message 6 of 13
StartingOver10
Moderator Emerita

Re: 9 points shy of approval. when to re apply

According to MyJourney, another poster here, this is the best card to apply for:

Secured 

Good APR 

Easy approval 

Reports to all 3 CB's 

https://www.sdfcu.org/emv-creditcards

Message 7 of 13
Revelate
Moderator Emeritus

Re: 9 points shy of approval. when to re apply

Wait a second, unless you're in a thin file scenario, why would you drop money on a secured card to improve score rather than simply writing a similarly sized check for your debt and get both a similar FICO boost but also a financial one too in paying off a non-trivial APR vs. secured interest which at best is minimal and far less?

 

If you want to talk how to strategize for a 9 point game we'd be happy to do that, but what you suggest isn't realistically a good course of action for most people.

 

If the mortgage lender kicked you out for not having your own tradelines, you're stuck for a time period anyway and go get your own card (or maybe even own 2-3 cards as they will probably require 3 tradelines in that case... but a lot of mortgage lenders have moved off this old standard as I understand it, no longer a GSE mandate); however, if they allowed the 1 AU to proceed and it's just a score issue, address the utilization issue directly would be my recommendation.




        
Message 8 of 13
Anonymous
Not applicable

Re: 9 points shy of approval. when to re apply

I've been doing a lot of research as I'll be buying another home in the next 18 months or so. Do not open a new card it will drop your score more. Pay your uti down as much as you can. From my personal experiment it seems to be between 3 and 9% uti gets me the max points per month. 

Message 9 of 13
takeshi74
Senior Contributor

Re: 9 points shy of approval. when to re apply


@Anonymous wrote:
I just got denied approval of a home loan. I was 9 points shy of being approved. Im going to get a secured credit card to show a new line of credit and it will drop our credit usage from 17% to around 10%. When would be a good time to reapply?

It's not about time it's about your credit.  A good time to apply is when your credit show the requisite improvement necessary for an approval.  There's no fixed timeframe for that and it all depends on what changes for you.

 

General advice is no new credit 6 months to 1 year prior to a mortgage so don't count on a new card helping.  On top of mortgage lenders being wary of new accounts in that timeframe, as stated above, you're incurring an HP and dropping AAoA.  You have to consider all factors and not just one.  If you need to drop revolving utilization then you need to pay down balances to get it down.  We can't tell you that a decrease of X% will yield Y points.

 


@Anonymous wrote:
Basically my history consists of a few negatives that have all been paid in full and marked as so.

Unfortuantely, paid does not really help.  Carefully research before addressing derogs.  Dergos tend to have the biggest impact and properly dealing with them generally yields the biggest improvements.  If not paid off you generally want to aim for PFD's as you want them entirely removed from your reports -- that is, if creditors/CA's will agree to PFD's.  At this point you're really just left with goodwill requests and they're under no obligation to comply.  The Rebuilding subforum is intended as resource for these matters.

 


@Anonymous wrote:
I was going off creditsesame. The score they give me transunion and is about 30 points higher than my experian i believe it was. So when they averaged out my 3 i was 9 points shy. 

You cannot rely on a score generated by one model to determine a score generated by a different model even if both models are FICO's.  I'm not aware of any mortgage lenders that use the VantageScores that CK provides.  Mortgage lenders do not tend to use FICO 8 scores either.  If you want to know what score a creditor will pull for you then you need to know the CRA's and the specific scoring model(s).  myFICO does provide scores used by some mortgage lenders as part of the additional scores offered one time or once/year depending on product purchased.

 

 

tl;dr -- Get your existing revolving balances down and don't count a new card unless you're intended to purchase a home at least a year down the road.  Even then you should still get them down.  For other recommendations we need to better understand your credit.  However, based on what you've said I'd highly recommend pursuing GW requests to have your derogs removed.

Message 10 of 13
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