FHA LOAN - bringing score up by 20 points to ger approved

[Emery79]

Hi everyone,

My hubby and I want to buy a house within six months.  His credit scores are fine, 640, 650,635. My scores are low, 600, 613, and 595.  My LO told me we need to have at least 620 to get preapproved for the home loan.  My credit carrds are pretty much maxed out. 

creditor  limit/bal

cap one 1000/930

cap one 500/435

creditone 400/300

macys 100/11.00

target 500/425

walmart 300/272

GE money 700/600

HSBC bbuy 510/445

HSBC 320/245

car loan 25000/ balance is 3700

My question is  how can I increase my score in about two or three months, I have about 1000 dollars, and dont know what to pay first to bring my scor up at least 20 points.  I am able to pay another 1000 next month.  which credit cards should I pay first?

thanks

[AtmyOffice]

What I just did to bring my score up about 30 points (I dont have baddies, just high utilization) was - by suggestion of my mortgage broker - to get as many of my accounts under 50% utilization as possible. He actually picked the ones with the lowest credit limits and it worked in about 30 days - you have to wait for the payments to be reported to the credit bureaus.

[mauve]

And don't do anything other than make the basic payment on the car.

Ideal scoring for revolving credit is when you have a balance on less than half of your cards and the remaining cards are each under 9%.

For maximum score boost, I'd pay the minimum on everything plus pay off all of the lowest balances.  I honestly don't know which is most effective, getting all down to 50% or getting more to 0.  You're scored on both your individual account utilizations as well as your total utilization of revolving credit. 

[Anonymous]

I'm in a similar situation where I want to buy a house, worked hard to get Equifax score up to 626, only to be told that I now need at least 640 for a mortgage loan with FHA!! I haven't had any luck with getting my TU score since November and haven't a clue how to find out my EXP score...

I'm hoping to purchase in 2  months but I'm starting to feel like this dream is still a long ways off...

[MarineVietVet]

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@Anonymous wrote:

I'm in a similar situation where I want to buy a house, worked hard to get Equifax score up to 626, only to be told that I now need at least 640 for a mortgage loan with FHA!! I haven't had any luck with getting my TU score since November and haven't a clue how to find out my EXP score...

I'm hoping to purchase in 2  months but I'm starting to feel like this dream is still a long ways off...

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Hello and welcome to the forums.

Why can you not get your TU score? Have you tried to buy it here? I'm not sure what you mean.

As far as the EX score no one has been able to buy their own Experian FICO score since February of 2009. Creditors can pull Experian and also there is a CU (PSECU) in Pennsylvania that supplies that information to it's members only.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[MBOhio2]

I am curious about OP's question too since I'm about to start paying down credit card debt with large chunks of $ too.... so the ultimate question seems to be, which will get you the bigger score boost?

Option 1: 1 or 2 cards paid to $0 while other cards have high util % OR...

Option 2: 3 or 4 cards paid to below 50 % util

Anyone know?

[ShanetheMortgageMan]

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@MBOhio2 wrote:

I am curious about OP's question too since I'm about to start paying down credit card debt with large chunks of $ too.... so the ultimate question seems to be, which will get you the bigger score boost?

Option 1: 1 or 2 cards paid to $0 while other cards have high util % OR...

Option 2: 3 or 4 cards paid to below 50 % util

Anyone know?

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I don't have any proof, but for someone who has multiple revolving accounts near their limits my credit vendors have always suggested that as many accounts be paid to $0 for maximum score increase, and it's worked.  However somehow I think if someone was at $0 on 6 cards of equal limits, and utilized 3 cards to 100%, and left the remaining 3 cards at 0% utilization, there score would be lower than if all 6 cards were utilized at 50%.  Perhaps someone who has plenty of credit and doesn't mind juggling some payments for a few months could utilize their credit for experimental scoring purposes.

[MBOhio2]

I bet the "Understanding FICO Scoring" board guys/gals can answer this... I'll post over there and report back

[AtmyOffice]

::raises hand!::

We ran my lender's credit simulator because I needed 10 points to qualify for FHA. It said I would get the maximum benefit paying as many accounts under 50% as possible vs paying off some completely. I paid the balances DOWN under 50% on the ones with smaller credit limits and it worked. My score went up 35+ points and I only spent 1500. My total debt is around 20K my total Credit Limits are around 30K. Hope that helps in the Petri Dish of credit score analyzing.

Edited to correct: I didnt' pay off. I paid balances under 50%.

[Anonymous]

I believe you get a small hit for each accounts utilization and another hit for total utilization.  That is why paying a couple and leaving a couple is not ususally the best way.