Need Help/Advice re: raising Mortgage Score

[Anonymous]

Hello there-  my boyfriend and I are looking to sell our current home next spring/summer and are planning to move to a town in the same state.  We've purchased a lot, and plan to build our new home (one we will be in for the next 15 years or so).   Getting ready for a construction >>> permanent mortgage, I need to do some credit building.  

I checked my FICO scores recent, and my FICO 8's are all in the 690-710 range.   However, my FICO mortgage scores are not as high.  Currrently my three mortgage scores (5/4/2) are 645/654/647, respectively.  Back in May the scores were 650/667/675 respectively.  The dip in the scores between May and July is probably due to some new tradelines I added, as well as my mortgage being sold by MB Financial to Fifth Third bank.  I understand it takes a little time for the dust to settle when mortgages are sold/assumed by another bank.

In any event, I need to get my mid mortgage score over 680 by next winter if possible (I'm told 680 is the minium for a construction > perm mortgage loan for most banks).   My income to debt ratio is good- combined we make about $200K/year.   I need to understand how best to handle my tradelines to optimize the mortgage score.  Here are my balances/limits:

Capital one card:  $1115/3500 kinit

Chase Slate card:  $ 747/ 2500 limit

Care Credit card:    $0     /700 limit

Local CU card/line:  $0  / 500 limit

Syncrony Home card:  $4400/ $4500 limit

Personal loan (reports):  $3500/6500 initially borrowed.

I am able to pay these all down to zero within a couple of months, but I wonder if I'm better off doing the paydown in some particular manner to help?  Maybe equal amounts over six-nine months?

Also, I have two 30 day lates on a Capital One Auto loan from about 10 months ago.  My credit card with them and a prior car loan with them have no lates at all.   The two 30 day lates arose because I lost my brother and my mom within two months and I was just struggling to get back and forth across the country to take care of family needs, and to maintain my job.  I fell behind but quickly realized it and came current.  I am going to try a Goodwill letter with Capital ONe because if ever there was a good reason, this is it.  

Finally, i was one day late on a mortgage payment to MB around the same period for the same reason, and so my report shows one 30 day late on the mortgage.  I could try a Goodwill letter to MB as well, though they no longer hold the loan.

Any advice you can give would be so very helpful.  Thank you in advance; I greatly appreciate the help!

[Anonymous]

FICO takes into account your highest individual card utilization(yours is 97%) and total UTI across all accounts(yours is 53%).  This is certainly hurting your scores by quite a bit.  There are talked about thresholds here where you'll receive point gains by crossing them.  Anything above 88.9% is considered maxed so you should receive some points back if you pay down the Sync card that you have.  By paying this card down, your total UTI will also cross scoring thresholds.  88.9%, 68.9%, 48.9%, 28.9%, and 8.9% are the accepted UTI thresholds where you'll receive point gain/loss by crossing.

I believe mortgage scores are also affected by the # of accounts with balances.  The less accounts with a balance, the better.  You can do a search here on the forums for the AZEO method(All Zero Except One).  I would recommend if possible, to implement this method.

You can do an online request for credit limit increases such as on your Capital One card.  It is only a soft inquiry so no harm would come of that.  Of course any increases you get will directly affect your utilization in a positive way. 

As you have already mentioned, the goodwills for the lates is the way to go.  Hope this helps.  GL! 

[Anonymous]

@Overmedicated—- oh my goodness, super super helpful! Knowing those thresholds where utilization has incremental effect in the score is great. Also the info. Re: having one card at maximum being harmful is good to know. All around solid advice that gives me a good roadmap.

I’ll see if I can request credit line increases with only a soft pull. I think Chase does hard pulls for CLI, but I’ll find out. Cap One may do just a soft pull...

Thanks very much for the reply.

[Anonymous]

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@Anonymous wrote:
@Overmedicated—- oh my goodness, super super helpful! Knowing those thresholds where utilization has incremental effect in the score is great. Also the info. Re: having one card at maximum being harmful is good to know. All around solid advice that gives me a good roadmap.

I’ll see if I can request credit line increases with only a soft pull. I think Chase does hard pulls for CLI, but I’ll find out. Cap One may do just a soft pull...

Thanks very much for the reply.

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Chase is 100% hard so don't bother with them.  Capital is 100% soft.  I'm not sure about the other cards but you can certainly do a search in these forums.

[Anonymous]

Synchrony is 100% soft- I just asked for and was given increases on those two cards. Capital One is next.

Of course this is one tool (increasing limits) in a toolbox. I took note of the ABOZ acrynom, so I’ll be paying down to zero all lines except one, and that one will be $20 balance. It looks like (from the MyFICO simulator) that the max benefit will happen if I take 6 months to pay down the balances, instead of doing it all at once.

Thanks again.

[Anonymous]

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@Anonymous wrote:
Synchrony is 100% soft- I just asked for and was given increases on those two cards. Capital One is next.

Of course this is one tool (increasing limits) in a toolbox. I took note of the ABOZ acrynom, so I’ll be paying down to zero all lines except one, and that one will be $20 balance. It looks like (from the MyFICO simulator) that the max benefit will happen if I take 6 months to pay down the balances, instead of doing it all at once.

Thanks again.

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Simulators including the one here are notoriously unreliable.  Making payments to get to AZEO or paying it all down at once will make no difference at all.  You don't need to be at AZEO until someone pulls your mortgage scores but as long as you know the ideal path where to be at then you'll have optimized what you have direct control over. 

Fantastic news on the CLIs!  Let us know how your score reacts.  I always love to hear results.  GL!

[Anonymous]

Absolutely. After I get the cards paid down and (hopefully) my goodwill letter for removal of the two lates acted upon, I’ll come back and report. This is a challenge and I’m hopeful I’ll get some real results on the mortgage score. :0)

[Anonymous]

Will do! I’ll definitely report back....thanks!

[LOC]

Great information!