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How to increase mortgage score

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Tankee
Valued Member

How to increase mortgage score

Hello,

 

I've recently been pre qualified for a mortgage loan. There was one last credit card charge off account that I was told to pay (even though they would not delete). I paid it.

 

1.Will it actually help boost my credit score? The house won't be complete (new construction) until March 1 so I have a few months to work on the scores.

 

2. I do not have any other charge offs. I have 4 active credit cards and 1 store card. If I get another card would it hurt/help my mortgage score increase?

 

3. All of my cards have a $500 limit but I am keeping a $10.00 balance on all of them, paying it off and then charging them again.

 

Any advice on how to boost my score? I am 16 points (middle score) from being able to get a better loan.

Past- EQ- 600; TU-624; EX-608 (10/1/2020)
Current-EQ-629, TU-651, EX-640 (11/1/2020)

Goal: EQ- 700; TU- 700: EX-700
Capital One- $500; Capital One- $500; Credit One- $500 Credit One- $500 Wayfair- $500 Ulta- $500
Message 1 of 3
2 REPLIES 2
CashBackQueen
Frequent Contributor

Re: How to increase mortgage score

1. The charge off being paid probably won't give you any extra points, but it will look better to lenders.

 

2. I wouldn't apply for any new cards. That will just hit you with an inquiry and also drop your AAoA and AoYA which could cost you even more points.

 

3. Are you letting all 5 cards report a balance? Letting only one report will gain you some points right there.

 


@Tankee wrote:

Hello,

 

I've recently been pre qualified for a mortgage loan. There was one last credit card charge off account that I was told to pay (even though they would not delete). I paid it.

 

1.Will it actually help boost my credit score? The house won't be complete (new construction) until March 1 so I have a few months to work on the scores.

 

2. I do not have any other charge offs. I have 4 active credit cards and 1 store card. If I get another card would it hurt/help my mortgage score increase?

 

3. All of my cards have a $500 limit but I am keeping a $10.00 balance on all of them, paying it off and then charging them again.

 

Any advice on how to boost my score? I am 16 points (middle score) from being able to get a better loan.


 

BK7 DC 1/2/18 • Progress as of 5/10/22:


TCL: $89,350 • If it ain't got rewards, I don't want it Smiley Wink
Message 2 of 3
vertekal
Regular Contributor

Re: How to increase mortgage score

Pay all cards down to zero EXCEPT one, and have it report a very low (3-5% or so) balance. This has been discussed quite a bit in these forums .. read up on the AZEO (all zero except one) method. 

 

Paying off the charge off probably won't do a lot for your score, but having it paid off may be required by the lender. 

FICO 8:
EQ: 1/2018: 494 | 4/2021: 652 (+158)
TU: 1/2018: 536 | 4/2021: 657 (+121)
EX: 1/2018: 499 | 4/2021: 641 (+142)

Mortgage Scores:
EQ: 9/2020: 560 | 4/2021: 648 (+88)
TU: 9/2020: 564 | 4/2021: 649 (+85)
EX: 9/2020: 576 | 4/2021: 672 (+96)

Message 3 of 3
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