Need help!!!

[Anonymous]

Hello, this is my first post.  I am trying to clean up my credit in anticipation of purchasing a home in the next 2 years.  I have been a bit careless with my credit and have spent a fair bit of time paying for this and trying to clean everything up.  I can't seem to get my score to move at all and need to know where to go from here.  I would appreciate any advice, guidance, or best practices that anyone can help me with!

EQ: 588 (their monitoring service)

EX: 625 (lender pull)

TU: 660 (their monitoring service)

Credit Karma: 650

MyFICO: 640 (based on EQ)

Utilization is about 37% across all cards; 27 open cards; 12 with balances. Some balances are over 50% utilization on individual card. Total CC debt $7,000.  4 personal loans total about $14,000.  Auto loan $7,500. Oldest card 10 years; AAoA 2.5 years (went on an application spree about a year ago).  EQ shows 61 inquiries, TU 11 and EX 9.

A few questions - will paying down the CC debit vs the installment debt increase the score faster, or knocking out some of the installment debt? Also, how long do inquiries truly effect your score? I have heard anywhere from 120 days to the full 2 years.  

Appreciate any advice!

[MT936]

I would pay off your credit card debt and try to only let 1 card report with a balance that is 1-9% and the others report 0 balance so that might mean you have to make multiple payments during the month but you must get your total utilization down as soon as possible it will help your score a great deal. As for hard pulls they stay in your report for 2years

[jamie123]

To groom your scores prior to a new mortgage credit application you want to have the following:

1. All credit cards except for one reporting a $0 balance. The remaining card should report from 0 to 9% of its credit line. If you pay all the cards to $0 you will have a lower score than if one card reports a small balance.

2. Have the least amount of inquiries as possible. Inquiries only affect your scores for one year but stay on your report for two years. THAT MEANS STOP APPLYING FOR CREDIT! 61 inquiries? Really? Was that necessary?

3. Paying down installment debt will have very little if any impact on your scores. If you paid all your installment loans off it would actually hurt your scores. However, any monthly payments that you have for installment loans will be subtracted from your monthly income for mortgage purposes. So if you qualify for a $1200 monthly mortgage payment but have a $100 installment loan, you will then only qualify for a $1100 monthly mortgage payment. It would be best to pay off all your installment loans except for the one with the lowest payment. You will have a higher score with one active installment loan reporting.

Your scores will rise immediately after your credit card balances start dropping. Like, the day after the reported balances start dropping. You are being dinged HARD for having your UTI above 30%.

Now is the time to clean up your credit reports. If you have ANY baddies on your report like late payments or charge-offs, visit the "Rebuilding Credit" forum to learn how to have them removed. Really, the last baddie on your report carries the most negative impact on your scores. One recent late payment can pull your scores down by 50 to 75 points. Removing baddies is really the fastest way to increase scores.

Your scores actually don't look too bad. If you get your UTI under 10%, get rid of all the inquiries and stop applying for new credit, I can see your scores in the 690s to 710s. But that is just my WAG.