CC balances - Closing Costs - Credit Scores - Request for your Adcice

[srn]

First, i would like to thank this forum and the members who have given me good suggestions which helped me improve my scores.

In Feb, my myfico scores were:

EQ: 655, EX: 676, TU: 670

Below are my card limits/balances in Feb:

Balance	Limit
$4,032.56	$5,000.00
$3,986.48	$5,000.00
$2,190.00	$4,100.00
$11,269.83	$12,000.00
$2,108.22	$3,000.00
$2,095.49	$2,500.00

My current myfico scores are: EQ: 700, EX: 722,TU: 767

Below are my current card limits/balances:

Balance	Limit	Util
$2,356.01	$5,000.00	47.12%
$1,450.00	$5,000.00	29.00%
$1,123.16	$4,100.00	27.39%
$5,705.75	$12,000.00	47.55%
$550.00	$3,000.00	18.33%
$0.00	$2,500.00	0.00%

I am planning on to bringing down my first card to 28% util (47.12 % to 28 %) by the end of this month.

I have been paying down my card balances and i see the increase in my scores. My Closing is in August. From now on, i am planning on saving for the closing costs. At the same time i need to make sure my scores do not go down.

Is making minimum payments every month OK from now on. Does making just the minimum payments decrease my scores. Or do i need to pay little over my minimum payments. What would be my ideal game plan ?

Request for your advice.

Thank you.

[StartingOver10]

Congratulations on your big score increases! I hope you are using mortgage scores from here and not the FICO 08 scores. Mortgage lenders only use the mortgage scores. If you haven't pulled your mortgage scores yet, they are on the 3B report (along with all the other scores). Your lender will use the middle score.

It is perfectly fine to pay minimums when you get your scores to where they need to be when storing cash for closing costs. You can't have too much cash on hand 

What type of mortgage are you applying for - conventional or FHA or USDA or VA? It makes a difference.

[Anonymous]

Congrats on those great scores!  I agree, always good to have some extra cash at hand when closing on a new home. 

[Anonymous]

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@srn wrote:

First, i would like to thank this forum and the members who have given me good suggestions which helped me improve my scores.

In Feb, my myfico scores were:

EQ: 655, EX: 676, TU: 670

Below are my card limits/balances in Feb:

Balance	Limit
$4,032.56	$5,000.00
$3,986.48	$5,000.00
$2,190.00	$4,100.00
$11,269.83	$12,000.00
$2,108.22	$3,000.00
$2,095.49	$2,500.00

My current myfico scores are: EQ: 700, EX: 722,TU: 767

Below are my current card limits/balances:

Balance	Limit	Util
$2,356.01	$5,000.00	47.12%
$1,450.00	$5,000.00	29.00%
$1,123.16	$4,100.00	27.39%
$5,705.75	$12,000.00	47.55%
$550.00	$3,000.00	18.33%
$0.00	$2,500.00	0.00%

I am planning on to bringing down my first card to 28% util (47.12 % to 28 %) by the end of this month.

I have been paying down my card balances and i see the increase in my scores. My Closing is in August. From now on, i am planning on saving for the closing costs. At the same time i need to make sure my scores do not go down.

Is making minimum payments every month OK from now on. Does making just the minimum payments decrease my scores. Or do i need to pay little over my minimum payments. What would be my ideal game plan ?

Request for your advice.

Thank you.

---

As long as you aren't using the cards, making the minimum payment won't drop your scores, as your utilization isn't going up. That said, continuing to drop the utilization may help the scores go up more. Additionally, if you can afford to not put anything on the cards, you can also afford to put your necessary purchases on them, and then pay off those purchases right away (assuming that you get some sort of rewards for using the cards, this makes more money in the long run). 

I understand the debate over saving for downpayment/closing costs vs. paying off the credit cards. If you're already dealing with someone for the mortgage, one of the things you might consider is asking them to fold the closing costs into the mortgage. That would allow you to either continue to pay down the cards or to put money aside in the event something happens. 

[Lemmus]

...iirc one of the CRAs has a checkbox "pays more than minimum" on each account ...assuming that plays into their calcs somehow ...thus I always pay more even if it is just $1 ...but SO10 is absolutely right in that you want to put as much aside for closing costs and post move surprises as you can ...just my view and worth what it cost you

[srn]

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@StartingOver10 wrote:

Congratulations on your big score increases! I hope you are using mortgage scores from here and not the FICO 08 scores. Mortgage lenders only use the mortgage scores. If you haven't pulled your mortgage scores yet, they are on the 3B report (along with all the other scores). Your lender will use the middle score.

It is perfectly fine to pay minimums when you get your scores to where they need to be when storing cash for closing costs. You can't have too much cash on hand 

What type of mortgage are you applying for - conventional or FHA or USDA or VA? It makes a difference.

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Convntional 5% down.

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[StartingOver10]

With a conventional loan you want your mortgage mid-score to be a min of 720 and preferably 740 or 760 for the best rates and the best PMI rate.  The higher your score the lower your PMI rate.  Google PMI rate tables and you will see the substantial difference. It is based on score and down payment amount.

[srn]

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@StartingOver10 wrote:

Congratulations on your big score increases! I hope you are using mortgage scores from here and not the FICO 08 scores. Mortgage lenders only use the mortgage scores. If you haven't pulled your mortgage scores yet, they are on the 3B report (along with all the other scores). Your lender will use the middle score.

It is perfectly fine to pay minimums when you get your scores to where they need to be when storing cash for closing costs. You can't have too much cash on hand 

What type of mortgage are you applying for - conventional or FHA or USDA or VA? It makes a difference.

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Just checked my mortgage scores, they are:

EQ: 692, EX: 693,TU: 733

[StartingOver10]

Not bad at all   Your mid-score is currently 693.

Pay down your balances and get as many to zero as possible and you will see your score jump.  You can get a conventional loan with a 693 mid score, but you get a much better rate (interest rate and PMI rate) if your mid-score is at least 720, It will make a big difference in your PMI rate.

Are you under contract already? If not, consider having the seller pay some or all of your closing costs and pre-paid expenses.  The guidelines will allow a seller contribution up to 3% of the purchase price for buyers closing costs and pp's.

[srn]

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@StartingOver10 wrote:

Not bad at all   Your mid-score is currently 693.

Pay down your balances and get as many to zero as possible and you will see your score jump.  You can get a conventional loan with a 693 mid score, but you get a much better rate (interest rate and PMI rate) if your mid-score is at least 720, It will make a big difference in your PMI rate.

Are you under contract already? If not, consider having the seller pay some or all of your closing costs and pre-paid expenses.  The guidelines will allow a seller contribution up to 3% of the purchase price for buyers closing costs and pp's.

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I am already on contract. I have already payed the 5% (earnest deposit + 25% on upgrades). I will try to pay down some of my balances.