Mortgage Score Boost

[FloridaGirl89]

Hey everyone, 

I'm looking to purchase my first home currently I have two credit cards (navy Fed and Self) both report between 1-5% utilization every month. 

I have 4 charge offs (2 have a balance) 

And one Late payment from a closed capital one card. 

I recently had a collections that I paid and the company did a pay to delete I receive the email with the attached letter that was also mailed out to me. Once TU, EQ and EX receive the notification .. how many points do you think I'll gain from the removal ?? My current middle score is 563 and myFICO says I need 57 more points to meet the approval requirements. 

Also any tips on boosting my score more?

[JoeRockhead]

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@FloridaGirl89 wrote:

Hey everyone, 

I'm looking to purchase my first home currently I have two credit cards (navy Fed and Self) both report between 1-5% utilization every month. 

I have 4 charge offs (2 have a balance) 

And one Late payment from a closed capital one card. 

I recently had a collections that I paid and the company did a pay to delete I receive the email with the attached letter that was also mailed out to me. Once TU, EQ and EX receive the notification .. how many points do you think I'll gain from the removal ?? My current middle score is 563 and myFICO says I need 57 more points to meet the approval requirements. 

Also any tips on boosting my score more?

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Welcome to the forum, pay one of your active credit cards down to zero and only allow the other one to report a small balance. If those charge offs are credit cards, the CL is replaced by the remaining balance, so until they're paid in full, they're scored as 100% utilization. Getting them paid to zero would help your scores but I can't say if there's 57 points there. The passage of more time will heal all things.  

[FloridaGirl89]

Thank you for your response. The charge offs are not credit cards.

[VAMortgageGuy]

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@FloridaGirl89 wrote:

Hey everyone, 

I'm looking to purchase my first home currently I have two credit cards (navy Fed and Self) both report between 1-5% utilization every month. 

I have 4 charge offs (2 have a balance) 

And one Late payment from a closed capital one card. 

I recently had a collections that I paid and the company did a pay to delete I receive the email with the attached letter that was also mailed out to me. Once TU, EQ and EX receive the notification .. how many points do you think I'll gain from the removal ?? My current middle score is 563 and myFICO says I need 57 more points to meet the approval requirements. 

Also any tips on boosting my score more?

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The collection removal could result in 20-60  points depending on the overall credit profile. The main thing to look at is how the charged off  accounts are reporting. If they're reporting every month, they are going to continue to suppress your scores so you'll want to settle them. You can contact the creditor and offer to settle the accounts for pennies on the dollar.  Once the accounts update to show paid, zero balance you should see a bump in your scores.

[FloridaGirl89]

Great thanks for the feedback, Since this post all charge offs has been paid and collection remove. So I should see a new score Nov 1st. Hopefully I get a nice boost from the charge offfs.

[Thomas_Thumb]

The collection removal could bump score 50 points. The paid charge offs should further help Fico 9 scores but, may not add any boost to "mortgage" Ficos.

As mentioned above, allow only 1 of 2 cards to report a balance. Fico mortgage scores (particularly EQ) penalize when more than 50% of cards report balances.

What are your scores by CRA?

[FloridaGirl89]

I only have two credit cards and they both always report between 1-4 % utilization. 

I paid a charge off early this year and got a small boost on mortgage score. 

[Thomas_Thumb]

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@FloridaGirl89 wrote:

I only have two credit cards and they both always report between 1-4 % utilization. 

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Fico has a scoring factor that looks at %/# of cards reporting a balance. It does not matter how small the balance is on the card. So, drop to one card only reporting a balance. Both cards can be used every month. Just pay one to $0 prior to statement cut date.

Having 2 of 2 cards report a balance vs 1 of 2 can significantly drop score. Just yesterday a poster with a clean file reported an 11 to 30 point drop with 2 of 2 vs 1 of 2 reporting small balances. The impact is less on dirty files but, can still be significant.

Aggregate revolving utilization and highest individual card utilization are important scoring factors. Your utilization is in the optimal range. However, both cards still are reporting balances.

Curious: what type of account was the prior charge off that was paid resulting in a small score increase? Also, can you list current mortgage scores by CRA?

[FloridaGirl89]

The charge off was from an old bank account that I had a balance on from 2023. 

Currently as of yesterday the scores 

617 EQ

581 EX

547 TR

[Thomas_Thumb]

@FloridaGirl89 

Any update on scores?