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This whole credit thing is new to me, but in short we already have an accepted offer on a house, but we're 3 points aways from getting the loan approval. Last month we put small amount on 3 credit cards and let them report. That didn't change his score at all which I didn't think it would. However this month another card with a small amount reported and it dropped him a point. So now 4 credit cards have small balances. I have an Old NAvy card that I upped the credit limit and paid the $7 dollar balance. That reported this morning and it didn't chance the score at all. Now 2 more cards will be reporting in the next few days that the small balances were paid off. So that will leave only 1 out of the 4 cards with a small balance. There's $56 on it with a $1900 limit. Do you think the 2 cards that will report paid off will help boost my husbands score or won't it change anything. I'm getting so frustrated with this. Please advice.
What are you using for scores?
Equifax and Transunion. They take the middle score so Experian isn't an option because it's the highest. Equifax is 612 now 611 because of the point drop and Transunion was 617 however that dropped 2 points to 615 when out Citi cc reported the small balance.
One of the scoring criteria is the number of cards as a percent of total cards that report a balance at the time of scoring.
You definately want less than half reporting any balance... and the lower the percent with balance, apparently the better. However, most seem to have found that having at least one card report a balance, and having that balance between 1-9%, is the ideal.
Having an increased number of cards reporting enables you to reduce the % of balance a bit easier, as the denominator gets bigger. However, while FICO looks at your report anew with each scoring, the reported balance on an account only changes once a month, after the credtior reports to the CRA. So make sure getting to $0 balance occurs just before the report to the CRA, which is usually just after their normal billing date.
Just out of curiosity, are these "new cards" recently opened? If so, their addition may have had a secondary impact of reducing your average age of accounts, thus offsetting gains made by increased CL and reduced % cards reporting a balance.
No 3 of the cards are at minimun 3yrs or older. The secured credit card is new. Taking out that card was "supposed to give us 10pts which it did on Equifax and Experian but it did nothing to Transunion. At the bginning of Feb. now 3 of the 4 will report a zero balance. So now I'm really hoping that when the other 2 report it will move our credit score up, but I don't know.
@Anonymous wrote:Equifax and Transunion. They take the middle score so Experian isn't an option because it's the highest. Equifax is 612 now 611 because of the point drop and Transunion was 617 however that dropped 2 points to 615 when out Citi cc reported the small balance.
If you are going to their sites, you are not getting any score that will be used by ANY lender, mortgage or not.
I know the scores arn't actually the right scores my lender is using, but when I see it go down a point from the score they say I'm at. Does that mean I didn't neccessarily drop a point, but then more than that if it doesn't change say on the Equifax score does that mean it didn't change at all or it could have changed when my lender pulls it. Did that make sense?
@Anonymous wrote:I know the scores arn't actually the right scores my lender is using, but when I see it go down a point from the score they say I'm at. Does that mean I didn't neccessarily drop a point, but then more than that if it doesn't change say on the Equifax score does that mean it didn't change at all or it could have changed when my lender pulls it. Did that make sense?
Don't assume that if a non-FICO (we call them FAKOs) drops that your FICO would too. I've had a FAKO drop once for 8 points and my corresponding FICO increased 58 when compared on the same day. Never assume they move in the same direction.
I think you have a good chance of getting those points.