@Anonymous wrote:
My husband has a credit card with a $300 limit...the balance recently was $43, we paid it off in full and today was the 'report' day...it showed at zero, that's good, but his score decreased by 5 points...yikes...
If you're going to fixate on the numbers then set a higher threshold. 5 points isn't a significant change. Scores will vary a bit just from normal activity. I'd suggest at least 20 points. Better yet, focus on report data but you'll need to educate yourself on how reports are assessed. Here's a starting point for FICO scoring. It won't tell you everything you need to know. It is just a starting point.
https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=revolving+utilization+closed+accounts+site:myfico.com
@Anonymous wrote:
his scores are: 657, 642 and 639. The 639 took the 5 point ding and is now at 634. WE ARE TRYING TO GET A MORTGAGE BY MID-JUNE...
What scoring models and CRA's? You always need to consider the specific model when referencing scores. You also need to consider the relevance of a given model/CRA to a given creditor/product as creditors do not all use the same scoring model. FICO itself has many scoring models used by creditors. See also the Understanding FICO Scoring subforum and its stickies.
If those scores are FICO 8's then keep in mind that mortgage lenders do not use FICO 8.
@Anonymous wrote:
From what I've been reading (and knowing our situation), the only conclusion I have come up with is that his card is showing NO UTILIZATION / USAGE...
I wouldn't jump to that conclusion. It's certainly possible but to verify you'd need to compare reports from before and after the scoring change to determine the cause(s). However, again, I wouldn't recommend sweating over 5 points.
It's not the current balance on the card that matters. It is the reported balance. The balances and limits on a report are used to determine revolving utilization. If you know the report date of the account that's another way you can determine what the reported balance is. When was the payment made? When is the report date for that account? Is it a Chase card? Where are you getting scores from?
Back up and start with the factors and their typical weights. Considering these factors when reviewing your reports will indicate to you where you need to focus for maximum gain.
https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=revolving+utilization+closed+accounts+site:myfico.com
Payment History is the biggest factor. You must have 100% postitive Payment History and no derogs. If you have lates, collections, etc then hit the Rebuilding subforum, carefully research before taking action and see what you can do to address those items.
Amounts Owed is the next biggest factor and Revolving Utilization falls under it and has a significant impact. If you have high revolving utilization then get it down. 30% is the suggested max. It is not ideal, just a suggest maximum.
Most other factors just take time and responsible management to build so you're not likely to find any serious gains in such a short span of time. Addressing derogs can take quite a bit of time. If you're planning on buying a home you really need to review your reports and begin working on things way in advance.
@Anonymous wrote:
Won't be at 30 percent utilization when trying to get pre-approved (mid-June)
What will you be at? Again, 30% is a suggested max. Lower is better and revolving utilization has a significant impact.
@Anonymous wrote:
One late payment (December 2015) - read FHA post that said no late payments in the past 2 years
@Anonymous wrote:
Paid judgment (now showing Deleted / Satisfied Paid in full)
Paid 2 collections (total $77.64)
Derogs tend to have a significant impact as long as they are on your reports. You want them all removed if possible. Hit the Rebuilding subforum. See if you can get goodwill removal of the late but understand that the creditor is under no obligation to remove valid information. Is the judgement deleted or is it not? Carefully research in Rebuilding to see if you can negotiate pay-for-deletes for the collections. Paying them won't help much if any. You want removal.
@Anonymous wrote:
In using a calculator online it says we could 'afford' a home over $300K, we are looking more at 195K to 220K
Regardless of what the calculator says, how are you going to afford a mortgage and associated costs of home ownership if you can't get your revolving utilization down? Buying the home is just the start of the expenses.
@Anonymous wrote:
What do you think our overall chances are?
We can't answer that. We are not underwriters for your mortgage lender. You need to be discussing this with your loan officer. Don't overlook the Mortgage subforum.
