Credit Advice

[Anonymous]

I'm trying to buy a house in a year. I think it's best to do absolutely nothing until then, but I would appreciate any feedback. 

The only credit I have outside of the last six months or so is a student loan opened 15 years ago with several late payments (60+ days) occuring at the end of 2010 around the time that it was ultimately paid off. There is also a collection (small ATT bill) that's been paid but still shows up on my Experian report. I'm told that should come off late this year as well. 

I have a car loan (co-signed) for which I owe $10k of the original $12k. 

Amex Blue Cash $1k (yet to report) 

Amazon Store Card $1k

Chase Amazon Rewards $500

BoA Cash Rewards $500

Capital One Platinum $500

Discover Secured $200 (eligible to upgrade in a week or so) 

Citi Secured $200 (eligible to upgrade in a year) 

I started in the mid-500s about 8 mos ago and I'm now reporting 660-685 FICO 8 scores for all three credit bureaus with perfect payments and 7% utillization. I'd like to be in the mid-700s by the time I'm ready to purchase a house. I'm pretty sure my big mistake was applying for too much credit to start since I now have around 8-12 inquiries with each bureau and a low AAoA (45 mos counting the student loan and 5 mos without it - I've seen both). 

The simulator on this site says I can get my scores up to 780 for EQ and TU and 705 for EX with 11 mos of on-time payments. Also by this time all of my derogatories will have dissapeared. 

A few questions: 

At what percentage paid off will my installment loan cease to be a negative mark? 

Would it be wise to close that gabage Citi card that is going to take forever to graduate to help my AAoA or just keep it open? 

Can I expect the negative impact of my app spree to have waned in a year's time? 

What's the best way to freeze my credit reports? 

If I could be added as an authorized user on someone's ancient CC account would that be helpful? 

Thanks. I wish I found this forum earlier last year when I started this journey. 

[SouthJamaica]

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@Anonymous wrote:

I'm trying to buy a house in a year. I think it's best to do absolutely nothing until then, but I would appreciate any feedback. 

The only credit I have outside of the last six months or so is a student loan opened 15 years ago with several late payments (60+ days) occuring at the end of 2010 around the time that it was ultimately paid off. There is also a collection (small ATT bill) that's been paid but still shows up on my Experian report. I'm told that should come off late this year as well. 

I have a car loan (co-signed) for which I owe $10k of the original $12k. 

Amex Blue Cash $1k (yet to report) 

Amazon Store Card $1k

Chase Amazon Rewards $500

BoA Cash Rewards $500

Capital One Platinum $500

Discover Secured $200 (eligible to upgrade in a week or so) 

Citi Secured $200 (eligible to upgrade in a year) 

I started in the mid-500s about 8 mos ago and I'm now reporting 660-685 FICO 8 scores for all three credit bureaus with perfect payments and 7% utillization. I'd like to be in the mid-700s by the time I'm ready to purchase a house. I'm pretty sure my big mistake was applying for too much credit to start since I now have around 8-12 inquiries with each bureau and a low AAoA (45 mos counting the student loan and 5 mos without it - I've seen both). 

The simulator on this site says I can get my scores up to 780 for EQ and TU and 705 for EX with 11 mos of on-time payments. Also by this time all of my derogatories will have dissapeared. 

A few questions: 

At what percentage paid off will my installment loan cease to be a negative mark? 

It varies from profile to profile but once it gets down to 9% it's optimum. But do not pay it down to zero prior to applying for a mortgage.

Would it be wise to close that gabage Citi card that is going to take forever to graduate to help my AAoA or just keep it open? 

You should try to have all of your credit cards, but one, report a zero balance, with the other reporting a sub 30% balance. Closing the account will not help you in any way. So leave it alone.

Can I expect the negative impact of my app spree to have waned in a year's time? 

It will be reduced. Time heals all wounds.

What's the best way to freeze my credit reports? 

Personally I wouldn't mess around with stuff like that at a time like this.

If I could be added as an authorized user on someone's ancient CC account would that be helpful? 

No no no.

Thanks. I wish I found this forum earlier last year when I started this journey. 

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[Anonymous]

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@SouthJamaica wrote:

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 If I could be added as an authorized user on someone's ancient CC account would that be helpful? 

No no no

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Great response by SouthJ as always.  One point of clarification.  The reason that you don't need an extremely old account added to your profile is that you already have one: a very old closed student loan account.  And this account should be remaining on your reports for another two years or more.

If, in contrast, your oldest account was (say) three years old, then being added as an AU to a very old credit card would be a great idea (as long as that CC had a $0 or very small balance).

PS.  After all your derogs fall off at the end of this year, you should make sure your CCs are optimized in terms of balances and then pull your mortgage scores.  The mortgage lender will use these and not your FICO 8 scores.  You can get them here at myFICO. 

PPS.  Since you have a ton of inquiries, you will get a good deal of benefit when they are all 1 year old.  (They will have zero effect after that.)  Further, your "Age of Youngest Account" will also be at least 1 year, and that is a factor that can have a significant effect on your score.

[RobertEG]

An additionally problem with adding an AU account is that it will automatically result in your score, even if it is increased, no longer representing an evaluation of your own credit history.

In a manual review, upon seeing that your score is influenced by information from the credit history of another, the prospective creditor has no way to "back out" the effect of that information and obtain a score based only on your own credit history.  Thus, it may call into question the value of your score in their credit determination.

Adding AUs is generally beneficial in rebuilding, where the creditor does not do a manual review, and thus will simply rely on your score.

However, as the amount of credit increases, there is more liklihood of a manual review, with possible questioning of your score as not representative of only your own risk analysis.

Some mortgage lendors will request that you remove any AUs as part of their underwriting process, thus providing them a score that is an evaluation of only your own credit risk.  If you plan on apping for a mortgage, you might not want to add an AU account.