Looking for advice on how to improve Mortgage Scores after CH7

[Anonymous]

New to forum and I would like to start by saying- this forum is AMAZING! Thank you so much to those who contributes, shares information, experiences and advice! 

I am asking for help/advice/input/ anything you can provide to help us improve our chances in getting a decent mortgage 1.5-2 years from now.

Backgroung: Last year we file for Chapter 7 bankruptcy and were discharged in Feb. 2019. We are currently working on rebuilding credit. We both have 3 credit cards each that we pay in full ( will start doing the AZEO method soon), I have $24k in student loans, my husband has a car loan. We also have a mortgage and another vehicle loan that we didn't reaffirm but continue to pay (were never late on either). We have a little bit of equity in our house and hoping to get $40-50K after we sell. We are looking to purchase in $350-400k range.

Our income is $146k/year and will increase by at least 6%. Current DTI is 24%

Our scores are:

mine: EQ 658  mortgage score 629

           TU 648  mortgage score 679

           EX  629  mortgage score 674

husband's:

            EQ 651  mortgage score 648

           EX  630  mortgage score 657

Thank you in advance for any information!

[Anonymous]

as the age old expression goes.

"Time heals all wounds"

not the advice your looking for, but. the best there is.

continue to pay everything on time. pay down all the loans as quickly as can which helps to improve DTI. Eventually the scores will start to move up.

[Anonymous]

Thank you! 

I was under the impression that 24% DTI is actually good, this includes current mortgage, car loans and student loan. We do not have revolving credit card debt. What DTI % should we be trying to get to?

[AllZero]

What is you and your DH current reported revolving individual and aggregate utilization %?

What about current reported installment utilization %

[Anonymous]

sorry, should not have assumed that did not include your current mortgage. DTI is certainly fine then... but as with any lender, any installment loans that can be lowered, showing a lower minimum payment per month looks better on paper.

i guess my initial comment holds true, time will be your best friend

[Anonymous]

What is you and your DH current reported revolving individual and aggregate utilization %?
My current revolving utilization is 7%, my DH is 10%
What about current reported installment utilization %

I do not know what the % is. How can I find out? One car loan was not reaffirmed, therefore, it is not reporting ( I did include it into DTI though).

Another car loan is brand new (July '19). We put $3.5k down on $24k car. I assume the utilization is pretty high. There is no way I would pay it down to 8.9% in 1 year. 

[AllZero]

---

@Anonymous wrote:

What is you and your DH current reported revolving individual and aggregate utilization %?
My current revolving utilization is 7%, my DH is 10%
What about current reported installment utilization %

I do not know what the % is. How can I find out? One car loan was not reaffirmed, therefore, it is not reporting ( I did include it into DTI though).

Another car loan is brand new (July '19). We put $3.5k down on $24k car. I assume the utilization is pretty high. There is no way I would pay it down to 8.9% in 1 year. 

---

When you're ready to apply for mortgage or want to test to see how high your mortgage scores can go, implement AZEO All Zero Except One card reporting a small balance >8.9% utilization, e.g. $10-$20.

Excluding mortgage, installment loans (auto, student) react similar to revolving accounts. If you cross a scoring threshold, you can gain/lose points.

If you look at your credit report, you can see the utilization %. eg Balance/Loan=Utilization. While >8.9% is optimal and extracting every last available FICO point, it's not absolutely necessary if you've met your middle mortgage score requirement. You can calculate your auto/student utilization in 12 months time and see where you land.

Known CC scoring thresholds are 8.9, 28.9, 48.9, 68.9, 88.9%