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Need advice on how to pay off cards for mortgage score increase

Vj926
New Contributor

Need advice on how to pay off cards for mortgage score increase

Hi friends, i need advice on how to pay off following cards to increase my mortgage score. Following are my scores and card details:

 

My FICO Score 8 EQ - 742 TU - 723 EX - 699

My Mortgage Scores EQ - 722, TU - 663, EX - 683

 

My open card balances -

APPLE CARD - 2953 balance. Limit - 5250. 56% Utilization

DCU Card - 2383 balance. Limit - 10,000 - 23% utilization

Pentagon Credit Union - 2150 balance. Limit - 15000 - 15% utilization

Citi cards - 155 balance. Limit - 500. - 31% utilization. Already paid this $155, yet to report

Paypal - 289 balance. Limit - 2500.

 

I am confused about the following options.

1) Pay off everything.

2) Pay off all but one. If yes, which account i should leave with balance and how much

3) Should i pay specific percentage on all accounts and leave 6% balance on each of them

 

Which of these will give me the best possible mortgage score bump? Thanks for your time.

 

10 REPLIES 10
dragontears
Senior Contributor

Re: Need advice on how to pay off cards for mortgage score increase


@Vj926 wrote:

Hi friends, i need advice on how to pay off following cards to increase my mortgage score. Following are my scores and card details:

 

My FICO Score 8 EQ - 742 TU - 723 EX - 699

My Mortgage Scores EQ - 722, TU - 663, EX - 683

 

My open card balances -

APPLE CARD - 2953 balance. Limit - 5250. 56% Utilization

DCU Card - 2383 balance. Limit - 10,000 - 23% utilization

Pentagon Credit Union - 2150 balance. Limit - 15000 - 15% utilization

Citi cards - 155 balance. Limit - 500. - 31% utilization. Already paid this $155, yet to report

Paypal - 289 balance. Limit - 2500.

 

I am confused about the following options.

1) Pay off everything.

2) Pay off all but one. If yes, which account i should leave with balance and how much

3) Should i pay specific percentage on all accounts and leave 6% balance on each of them

 

Which of these will give me the best possible mortgage score bump? Thanks for your time.

 


To get the biggest boost to mortgage scores, pay ALL of them off and leave a $10 balance on only one card (doesn't matter which).

Message 2 of 11
Vj926
New Contributor

Re: Need advice on how to pay off cards for mortgage score increase

Thank you @DR . Sometimes, i have seen score dropping when i pay full balance for an account. Is it temporary?

Message 3 of 11
dragontears
Senior Contributor

Re: Need advice on how to pay off cards for mortgage score increase


@Vj926 wrote:

Thank you @DR . Sometimes, i have seen score dropping when i pay full balance for an account. Is it temporary?


Which model do you see that for? For FICO8 AU, store and CU cards can be treated differently for scoring purposes but that doesn't apply to mortgage scores to the best of my knowledge. 

Message 4 of 11
Vj926
New Contributor

Re: Need advice on how to pay off cards for mortgage score increase

Thank you. i think the scores drop i saw was on Fico Score 8 and not for mortgage scores.

Message 5 of 11
Revelate
Moderator Emeritus

Re: Need advice on how to pay off cards for mortgage score increase

I'd leave a yuppie food stamp on the Citi card personally though $10 or even $5 is fine too, everything else 0.  One balance on a national bankcard that is in your name (not AU) = optimal for everyone on every relevant score.

 

Yes retail and CU and other cards *should* be counted the same, but I've seen some wonky behavior with CU cards on EX FICO 2 and DCU is explicitly one of those, not worth it risking it on a mortgage app.




        
Message 6 of 11
Vj926
New Contributor

Re: Need advice on how to pay off cards for mortgage score increase

Thanks Revelate. In your experience, have seen Fico 8 being different than the mortgage score?. I see score drop in Fico 8 when i pay off credit cards

Message 7 of 11
JVille
Valued Contributor

Re: Need advice on how to pay off cards for mortgage score increase

AZERO - all zero except one and the one needs to be a National credit card like Citibank.... 

Message 8 of 11
Adkins
Legendary Contributor

Re: Need advice on how to pay off cards for mortgage score increase


@JVille wrote:

AZERO - all zero except one and the one needs to be a National credit card like Citibank.... 


And not a Chase credit card. Chase will report a zero balance once the card is paid to zero. 

Last HP 06-30-2022



Message 9 of 11
4sallypat
Valued Contributor

Re: Need advice on how to pay off cards for mortgage score increase

I was in the same situation last year when we were looking for a house.

 

Found a patient mortgage broker who knew that we could not pay off all our debt (AZEO) so he had us work on the ones that affected 5,4,2 mortgage scores.

 

Over a period of 4 months, we paid down only certain major cards (less than 9% UT) and left the store cards, co-branded and LOC alone.

Overall debt at that time went from $40K to $25K which helped our scores tremendously.

Went from mid 600s to low 700s.

 

Worth finding a good, patient, score simulator mortgage broker!

Message 10 of 11
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