Help!! Which score is used for mortgage approval?

[Anonymous]

I have the credit karma app & Experian app - following my credit scores. Recently paid off all collections. Have 1 closed account/repo charge off. 0 DTI. I want to buy my own home but credit scores are still low to mid 500's.  FICO 2 shows as 624. I don't WANT any cards/debt other than owning my own home. What do I do?

[dragontears]

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@Anonymous wrote:

I have the credit karma app & Experian app - following my credit scores. Recently paid off all collections. Have 1 closed account/repo charge off. 0 DTI. I want to buy my own home but credit scores are still low to mid 500's.  FICO 2 shows as 624. I don't WANT any cards/debt other than owning my own home. What do I do?

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Ignore Credit Karma scores, they are never used for mortgages 

Scores used for mortgages are EX2, TU4 and EQ5.

If you have no open accounts your credit scores will remain poor as there is no way for the algorithm to determine how you are currently handling your credit obligations. 

At one point I was dead set against having credit cards at all but then I tried (and failed) to buy a house. After that experience I opened one secured card, charged a tank of gas (back when I lived somewhere that it was ~$20/tank), paid in full after the statement. After 6 months of doing this I was able to buy my first house. 

[Anonymous]

MMS, Middle Mortgage Score

Take your mortage FICO score from each bureau: the middle value score is the one they'll use

myFico provides these for about a $40 subscription that you can cancel right after, while still having access.

[Jnbmom]

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@Anonymous wrote:

I have the credit karma app & Experian app - following my credit scores. Recently paid off all collections. Have 1 closed account/repo charge off. 0 DTI. I want to buy my own home but credit scores are still low to mid 500's.  FICO 2 shows as 624. I don't WANT any cards/debt other than owning my own home. What do I do?

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I believe they use FICO 2, 5 for mortgage .

Forget credit karmas score its vantage and not used. If your Experian FICO 8 is in the 500's , do you have a lot of negatives ?

Do you have any credit cards?

[Anonymous]

I have no credit cards, yes I have negatives from last year but everything has been closed/paid. I have NO current open accounts.

[Jnbmom]

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@Anonymous wrote:

I have no credit cards, yes I have negatives from last year but everything has been closed/paid. I have NO current open accounts.

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Not sure when you plan on applying for mortgage , but only having negatives even paid will not help your score . You will need to open a few cards , you don't need to go in debt use for little things and pay off, but you are going to have to have some positive accounts reporting .

[NC_Mtg_Loaner]

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@Anonymous wrote:

I have no credit cards, yes I have negatives from last year but everything has been closed/paid. I have NO current open accounts.

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2/3 of your credit score is based upon the data being reported to the bureaus from your open and active accounts which is why it's critical to open 2-3 accounts (installment and two revolving accounts are ideal) and manage them properly.   Don't charge more than 30% on each account each month and pay them down to under 10% (but not off in full) every month is recommended in order to maximize your score.

Yes, we understand you don't like to pay high interest rates on cards.   

However, you don't need a credit card with $1000 balance carried every month.....even if  you did and the rate were 30% on that card you would only pay $300 interest per year, but that's not the issue---it's the activity of this monthly account that once reported allows your score to rise when the algorithms measure the account activity each month.