Need Advice - First time Home Buyer - Boost mortgage scores

[Anonymous]

Updated POST in RED: As of today 12/11  -  I've been reading the forum daily and working to improve my utilization as advised from you all. My scores are improving and my goal of purchasing a home may be an option Summer 2021. Thank you all so much!

Please review my updates and provide any advise, it is all much appreciated.

MyFico Mortgage scores  615, 663, 595

Current MyFico Mortgage score: 627, 665, 617  - updated score available 1/2021

Current Open CCs: 

Navy Federal CC  22358 balance//24000 limit - 93% utilization

20879/2400  - 87% utilization  - Goal is to pay down to below 89%****

Synchrony CC 2946 balance/ 4400 limit  - 67% utilization

2164/4400 - 49% utilization  - Paying down to 27% on Jan 1

Synchrony CC 1202 balance/2500 limit - 48% utilization (2 lates in 2015 & 1 late in 2014)

625/2500  - Paying down to $0 on Jan 1

Capital One CC 846 balance/ 1850 limit - 46% utilization

489/1850  - Paying down to $0 on 12/25

Comenity/VS CC 1492 balance/ 2700 limit  - 55% utilization

680/2700  - Paying down to $0 on 12/25

Macys CC 5933 balance/ 7300 limit  - 81% utilization (3 lates in 2015 & 1 late in 2014)

5230/7300  - 72% utilization  - Goal is to pay down below 30%****

Closed Account: 

Synchrony/Paypal Credit 3146 balance/5231 limit (6 lates in 2019 - most recent in December)

2659/5231 limit (5 lates showing from 2019) I was able to GW the Dec 2019 late

Goal is to pay down to $0****

My credit utilization is extremely high. I have 3k available a month to pay down debt, looking to purchase my first home summer 2021. What are my best options/payment strategies to boost my mortgage credit scores? Should I pay off the Paypal credit closed account in full? I'm currently making payments each month on this account on time each month. No other recent lates on my credit. Any advice is greatly appreciated.

[Anonymous]

bump

[AllZero]

Below are benchmarks for FICO 8. Scores lenders use for mortgage are EX2, TU4, EQ5; should react similarly.

Remember these aggregate utilization thresholds: 8.9%, 28.9%, 48.9%, 68.9%, 88.9%
Remember these individual utilization thresholds: 28.9%, 48.9%, 68.9%, 88.9%

If you're not crossing a threshold, you won't be getting points.

You might want to address any derogatory you have; delinquency, charge off, collection, etc. If they are updating monthly, it'll keep your scores suppressed.

[CreditCuriosity]

@Anonymous spam filter ate your orignal message so restored it due to multiple edits.  Regardless merged your two posts together

[AllZero]

@CreditCuriosity.  Thank you.

[AllZero]

I would recommend reading the below from ABCD2199
The Truth about Credit Card Utilization
My 11 Rules to Credit Rebuilding
FICO Score: What to pay down first?

From Birdman7
General Scoring Primer and Version 8 Master Thread rev.5.17.20

[Anonymous]

The paypay credit closed account is reporting monthly and not a charge off or collection. If I pay that off will I get a score boost?

[jrands]

Is the $3000 on top of what you already pay, or is it the total amount you have on hand to pay the minimum+additional? What is your total minimum payment each month?

[Anonymous]

My total min pay is 3k per month. 

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@jrands wrote:

Is the $3000 on top of what you already pay, or is it the total amount you have on hand to pay the minimum+additional? What is your total minimum payment each month?

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[Anonymous]

There are 2 general strategies for paying off debt in multiple accounts, commonly known as snowball and avalance.

I think it would simplify your finances a bit by doing the snowball. Pay off the cards by order of how much dollar amount balance they have, smallest first. Don't spend using those cards any more until you get out of credit card debt. That makes one less bill and one less minimum payment to worry about for each card you can payoff.

I would save the NFCU card for last. It has a huge dollar amount balance. Going with this plan, it should be the only card that you'll still have a balance on next summer. I suspect the NFCU card may have the lowest APR of all of them. Credit cards from credit unions generally don't charge more than 18% APR; banks have much higher maximum rates. Paying off the lowest APR last is also part of the avalanche method.

You should pay off your PayPal card just like the others. The fact that it is closed doesn't matter. If it was "charged off", that would be a bit different, but closed is ok and nothing to worry about really.

I guess you'll be trying for a VA loan? You'll need to set aside about 5% for closing costs and a bit more if you are not exempt from the funding fee. Honestly, my initial impression is that next summer will be too early, but you'll do what you need to do.