What would you add/remove to my credit profile?

[Anonymous]

In order of oldest to newest:

7500 SL - 9 yrs (currently rehabbing, to complete 12/2013)

1K MC USAA - 8 mos

3K Visa USAA - 3 mos

2500 Unsecured PL - this month

15K Visa USAA - this month

15K Visa USAA - this month

11,350 Secured PL (vehicle lien) - this month

Scores showing in my sig have all been affected by inquiries. Income is $72K.

CC util is about 1%, but if I can find a way to pay my rent with a CC, it'll be around 7.5%. I'm in the garden at least until 9/2013. Tell me what you think I should go for when I exit the garden, if anything. Maybe I should just garden for the next 3 or 4 years to add some longevity? Or, will the credit cards I have support me on my way to breaking 800? About the loans, is it better to pay them off sooner, or wait? Do I even need them?

Anyway, you get the idea.

My credit profile is clay in your hands.

[chasmith]

To maximize your scores and target a mortgage, I would stay in the garden at least a year to age off the inquiries and get the SL rehabbed.  (Your scores seem really good with a SL that reports past problems).  With your low utilization you don't need more credit, and beyond three "bank cards" you don't need more cards, you need to get your AAOA up after all the recent accounts..

I would keep at least one installment loan reporting.

Why would you pay your rent with a CC?  I believe you could use USAA Billpay to pay from CC but that is a cash advance charging interest from the first day.  Landlords won't want to take the CC because they pay a fee to clear the card transaction.

Utilization at 1% is certainly no worse than 7.5%.  Consider rotating which card shows a balance each month, be sure at least one but less than half the cards report a balance.

Finally, an 800 score is nice but 740-760 gets you the best mortgage rates. 

[Anonymous]

Thank you.

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@chasmith wrote:

... (Your scores seem really good with a SL that reports past problems).   

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The SL baddies aged off, and the Sallie Mae is reporting good payment history because I had the insurance cover them.

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@chasmith wrote:

I would keep at least one installment loan reporting.

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I was thinking of this. I had planned to pay off both loans before 10/2013 to save on interest. Based on your advice, I would have to extend the payoff dates for one of the loans. Which loan should I choose? Would the SL count? The SL won't appear on my CR until after 12/2013, that is, if it gets picked up that early. I've heard of some loans taking 6 months to pick up. So, in the meantime, I could just pay the loan that would cost me the least interest over that time, right?

An option I had been considering was to pause gardening, depending on my CR, to apply or refinance for another unsecured loan 9/2013 so my credit profile can show I can qualify for a higher unsecured limit than $2500. I suppose I can always wait.

Oh, and I'm not planning on mortgaging until sometime in 2015. I had planned to show good maturity and credit graduation until then, with my last inquiry in the last quarter of 2014.

[chasmith]

I'd keep only the installment loan that costs the least interest.  Prepay all but "X" payments to carry to when you expect the SL to report.

You have good limits for your income, and while the Experian FAKO score gives me a plus for average limits above 5K, I'm not sure limits impact FICO, it's utilization against those limits that matters.

My only other comment is that you have all your eggs in the USAA basket.  I like USAA too, but are you able to join Navy Federal CU?  I would consider joining NFCU, or another CU to maintain another banking resource.

Don't do things to squeeze extra score that aren't good financial moves.  In another year you'll be solidly in the 700s on all three CRAs, you just need 35 points on EX to get your mid-score to 740 for best mortgage rates.  But do be aware that if that vendor pull was for the car loan it might be "auto-enhanced" and not the same scores a mortgage lender would pull.

[Anonymous]

I think I'll pay off the higher costing one in a year, and ride the other one out like you suggest. I don't need the money, just the payment history. Even SL rehab programs require at least 10 months of payments to prove good payment history. 

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@chasmith wrote:

My only other comment is that you have all your eggs in the USAA basket.  I like USAA too, but are you able to join Navy Federal CU?  I would consider joining NFCU, or another CU to maintain another banking resource.

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Yes, I have thought on having all my eggs in the USAA basket. The products are so good, though. I'll try to get into NFCU; thank you for the suggestion. 

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@chasmith wrote:

Don't do things to squeeze extra score that aren't good financial moves.  In another year you'll be solidly in the 700s on all three CRAs, you just need 35 points on EX to get your mid-score to 740 for best mortgage rates.  But do be aware that if that vendor pull was for the car loan it might be "auto-enhanced" and not the same scores a mortgage lender would pull.

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Great advice. I'm going to edit my original post to reflect that it is an auto loan, because I just called the bank and it is auto-enhanced (that's a wow for me). However, the scores in my sig are from a mortgage lender.