Mortgage Question

[Anonymous]

Hello,

My wife will be graduating medical school in the next few weeks. We are going to do a Physician Mortgage - so the bank pulls credit and my score comes back at 719 which is one point away. Would my score increase one point by paying some debt down and not opening any credit cards or missing any payments?

Thanks for all the help

[Anonymous]

If you have CC debt that reports on a monthly basis, then paying it down may help you.  It really depends on what the card balances and limits are, and if you can provide details, a more specific answer can be given.

Paying down installment debt is unlikely to help much, and paying off and closing installment loans can hurt your score.

Opening new CCs will probably hurt you, unless the additional credit they provide significantly lowers your utilization.  The costs are hard inquiries, new tradelines, and reduced AAoA.  Opening CCs in the context of a mortgage is typically a no-no.

Missing payments will hurt you a lot.

[meehan22]

if you have outstanding cc balances- pay them off and you'll get your one point. 

[Anonymous]

Thanks for the replies - I have some cash Reservers in the bank but I am afraid to use them to pay 2 high cc down with because then I won't have a minimum reserve for the loan not unless you can count IRA.

[Shogun]

For the best possible bump in score, you can tweak your util.  Max is all cards paid off, and one card reporting less than 9%.  I don't know what your balances are or your cash reserves, but this is the fastest way to get a bump.

[Anonymous]

Thanks - I had a car lease and just made the final payment on that - but I DO NOT intend on purchasing a car, I have an old pickup I could drive. Will that help any at all?

[Shogun]

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@Anonymous wrote:
Thanks - I had a car lease and just made the final payment on that - but I DO NOT intend on purchasing a car, I have an old pickup I could drive. Will that help any at all?

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Actually, probably not.  And if that was your only installment loan, you could see a drop due to a loss of mix of credit.  Can you take that lease payment and use it to now pay down that util?

[Anonymous]

Oh yah - I plan on doing that - I don't use the CC just paying them down monthly.

[Anonymous]

I probably should add that the lender we did our pre - qualifying through actually sent us a letter stating that we've been pre-qualified for an amount and that we qualify for their 100% Physician Loan ........so am I worrying for no reason over the one point?

[fot1]

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@Anonymous wrote:
I probably should add that the lender we did our pre - qualifying through actually sent us a letter stating that we've been pre-qualified for an amount and that we qualify for their 100% Physician Loan ........so am I worrying for no reason over the one point?

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I would still try to get that 1 piont..  Shouldn't take much, just pay down a few utli %.. Pre-qualified isn't set in stone.. You don't get to stop worrying untill you get the keys..lol