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How to raise mortgage scores in 2 months for VA loan Post-Chapter 13?

yodi2007
Contributor

How to raise mortgage scores in 2 months for VA loan Post-Chapter 13?

I am looking to purchase a home in the couple of months using a VA loan. I pulled my FICO scores they are the 2-4-5 scores are as follows. 575/613/620. with the 613 being the middle score. My FICO 8 scores are 630/603/649. I need to at least get my 613 up as it's the middle score. I have just discharged my Chapter-13 in December. I have paid off my 4 CC down to 0$ (0/2000, 0/250, 0/500, and 0/100). I still have about another 6 cards that is (1450/3000, 1800/3000, 618/700, 200/1000, 650/1000, and 400/600). I will have 5 of the 6 paid off in the next two weeks, no loans to pay them off, just from my paycheck. I have no late payments in the past 2 years. I just have a student loan that was 30 days late in 2019 as I forgot the forbearance and this loan didn't make it into the chapter 13 case as I was in college when I filled in my next to last semester. Please help!

11 REPLIES 11
CH-7-Mission-Accomplished
Valued Contributor

Re: How to raise mortgage scores in 2 months for VA loan Post-Chapter 13?

Can you list the 10 credit cards that you currently and their opening date and interest rates?

 

Eyeballing it, it looks like you owe about $5K total.   If you have the $$$, you should pay off all of the cards to zero except one bank card that can report like $10.   FICO penalizes you for having too many accounts with balances.   It prefers you have only one and that that card have only a miniscule amount owing.   Do NOT open any new credit until your loan is closed and funded.    By looking at your individual cards we can probably suggest the best ones to pay down the one to leave a small balance on.   What middle mortgage score do you need?   Please provide some answers and I will try to help.

Message 2 of 12
yodi2007
Contributor

Re: How to raise mortgage scores in 2 months for VA loan Post-Chapter 13?


@CH-7-Mission-Accomplished wrote:

Can you list the 10 credit cards that you currently and their opening date and interest rates?

 

Eyeballing it, it looks like you owe about $5K total.   If you have the $$$, you should pay off all of the cards to zero except one bank card that can report like $10.   FICO penalizes you for having too many accounts with balances.   It prefers you have only one and that that card have only a miniscule amount owing.   Do NOT open any new credit until your loan is closed and funded.    By looking at your individual cards we can probably suggest the best ones to pay down the one to leave a small balance on.   What middle mortgage score do you need?   Please provide some answers and I will try to help.


Loan Officer said she has gotten people VA loans with a score as little as 585 this past year with a much worst credit history such as BK, a 30 day late, but makes good money and have been at their job for over 20 years. I want to get my middle scores and all scores in general up. The higher the better the outcome may be. I have been informed by the LO not to open any new credit lines or make large unknown deposits other than payroll deposits.

 

Cards not paid yet

Dell Finacial (open date 4/2021) =1450/3000 (0% for 24 months)

Paypal Credit (open date 10/2021)= 1800/3500 (0% for 24 months)

First Premier Mastercard (open date 1/2020) = 618/700 (24%)

AMEX Bluecash (open date 6/2021)= 200/1000 (17%, Wife's Credit Card, piggy backing on her card)

Credit One Visa (open date 1/2020) = 400/600 (25%)

Bestbuy Storecard (open date 3/2020) =650/1000

 

Cards paid with zero balance

Navy Federal Visa (open date 2/2019) = 0/2000 (17.99%)

USAA Visa (open date 2/2018) = 0/250 (17%, Secured Card)

Walmart Store Card (open date 4/2019) = 0/300 (24%)

Sams Club store card (open date 4/2019)= 0/100 (was 1500 but for some reason they lowered it several times in 2020)

Credit One AMEX (open date 3/2020) = 0/700 (24%)

 

Other information

2 cars paid cash for

Disabled son who recives 900/month for disability

Reduced cell phone bill from 380/month to 175/month (son and daughter in law was on plan)

Filling a VA claim soon for tinnitus and other ailments

Completed Chapter 13

1 of my student loans is in deferment

166/month plan to pay for college with 5 payments left

20k in savings account (plan to have another 10-15k deposited from payroll deposit by March)

2k in checking account

Wife has an Amazon Visa Card = 700/1800 (not sure %, not listed on her card)

Have assets in crypto currency (Value unknown at the time of the writing this as I have it stored on encrypted cards)

Have investments in stocks (Value 15k)

 

 

Message 3 of 12
TXPocohontas
Contributor

Re: How to raise mortgage scores in 2 months for VA loan Post-Chapter 13?

Sounds like you are on the right track.

 

I would pay them in this order:

 

$600     Best Buy

$400     Credit One Visa

$600     First Premier Mastercard - leave the $18 balance because they will charge you $6.25 fee if you don't have a balance

$1450   Dell

$1800   Paypal

$200     AMEX Bluecash

 

Your scores are going to go up once they report the new balances.  Keep in mind that creditors typically report balances 3-5 days after your statement due date.   Hope that helps.  Keep up the great recovery work!  Wishing you and your family many blessings. Smiley Happy

Starting Fico 8 Score Dec 2019: 469 TU 501 EQ 453 EX
Current Score: 791 TU 769 EQ 784 EX
Goal Score: 820 Across the board
First Premier CL $300 BAL $0, Lane Bryant CL $750 BAL $0, Credit One AMEX CL $600 BAL $0, NFCU Visa CL $9100 BAL $0, Capital One QuickSilver CL $2000 BAL $0,Ashleys Homestore CL $3500 BAL $0,
LATE PAYS/COLLECTIONS/BANKRUPTCIES/CHARGEOFFS/JUDGEMENTS 0
Message 4 of 12
JVille
Valued Contributor

Re: How to raise mortgage scores in 2 months for VA loan Post-Chapter 13?

Agree and Stop applying for new credit it's killing you! Do NOT give anyone but the lender you intend to us your or wife's SS #. Your inquiries are also causing damage. Even if they promise a Soft Pull do NOT do it!!! 

Message 5 of 12
yodi2007
Contributor

Re: How to raise mortgage scores in 2 months for VA loan Post-Chapter 13?

Paid my Best Buy store card down and my Experian Fico 8 went from a 649 to 620, losing 29 points for paying it down! Why did it do that?

Message 6 of 12
Mortgage-Specialist
Established Contributor

Re: How to raise mortgage scores in 2 months for VA loan Post-Chapter 13?

I don't believe it has anything to do with paying down  the card

Message 7 of 12
yodi2007
Contributor

Re: How to raise mortgage scores in 2 months for VA loan Post-Chapter 13?


@Mortgage-Specialist wrote:

I don't believe it has anything to do with paying down  the card


It has to be! I opened no new credit lines, no defaults, no lates, no reduced credit limits, no accounts closed, and I mean nothing! After Bestbuy posted a decrease in util, the next day my score drops 29 points! WTH? How does one gain an affect in credit scoring when they dock you for paying?

Message 8 of 12
yodi2007
Contributor

Re: How to raise mortgage scores in 2 months for VA loan Post-Chapter 13?

Update to my Credit Card payments!

Cards not paid in full yet

Dell Finacial (open date 4/2021) =1450/3000 (0% for 24 months)

Paypal Credit (open date 10/2021)= 1800/3500 (0% for 24 months)

First Premier Mastercard (open date 1/2020) = 21/700 (24%) (Instructed to keep at least 18 usd so i don't get charged for non-activity fee)

Bestbuy Storecard (open date 3/2020) =262/1000 (caused my Fico8 to drop from 649 to 629 after a 350+ payment)

 

Cards paid with zero balance

USAA Visa (open date 2/2018) = 0/250 (17%, Secured Card)

Walmart Store Card (open date 4/2019) = 0/300 (24%)

Sams Club store card (open date 4/2019)= 0/100 (was 1500 but for some reason they lowered it several times in 2020)

Credit One AMEX (open date 3/2020) = 0/700 (24%)

AMEX Bluecash (open date 6/2021)= 0/1000 (17%, Wife's Credit Card, piggy backing on her card)

Credit One Visa (open date 1/2020) = 0/600 (25%)

 

Card using to pay everyday things

Navy Federal Visa (open date 2/2019) = 1000/2000 (17.99%) (Also will payoff again this week after payday)

Message 9 of 12
homeloanexpert
Established Contributor

Re: How to raise mortgage scores in 2 months for VA loan Post-Chapter 13?

@yodi2007

Hello my fellow Veteran!

 

Congratulations on paying off your BK Chapter 13. As you may already know, there's no waiting after a discharge of a BK CH13 for FHA ,VA or USDA. It doesn't really sound like you need much help. You have a good sound strategy in play for paying off the remainder of your debt. If that was your decision. As a lender, from this desk, you are actually going to go now. Many lenders go down to 580,  and some of us can actually go down as low as 500 case by case. So at 600+ you are eligible now. Please continue working on your scores, for every 20 point incremental rise, there are enhancements to the pricing. Meaning the rates are lower.

Branch Manager - Specializing in FHA, VA, USDA, Conventional, Jumbo, Portfolio and Non-QM Loan Products.
Message 10 of 12
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