Need help raising score 18 points for mortgage!!!

[Anonymous]

Hello everyone!

This is my first post here so just want to say thank you in advance for any help you guys may give me!

So im in the process of applying for my first mortgage and to make a long story short my DTI with the house is too high. One of the reasons its too high is because they average my income over the last 24 months but i just graduated from school last april so im sure you can see where that is a problem. Anyways... I need my credit score to be a 640 before they can go above 50% DTI for the loan. Unfortuantely im currently sitting at 622.

Now here is what ive done so far!

I have two capital one credit cards both of which had a $750 CL. I have paid both of those cards off and have stopped using them. One of the cards got a CLI of $3000 so my new limit is $3750...other card got denied. Now, one of my cards reports on the 19th and the other on the 3rd so once those hit my credit report im hoping for atleast some movement in my score.

The other thing required for me to get the mortgage and lower my DTI is to sell my truck. Currently i owe $26,7xx on it and thank god i have about $2000 in equity. My local dealer agreed to just write me a check for the vehicle and im not obligated to buy anything from them. The question is will getting rid of my auto loan help or hurt my score?!

I have 5 late payments in my credit history of 4 years. All of those five payments are from when i was in school. I tried calling capital one last night to see if i could get some of those removed as ive read of others sucess doing so and had no luck...

Any other ideas?

[Anonymous]

Getting rid of the auto loan is unlikely to help your score. In fact, paying it off could hurt your score by effecting your overall credit mix. The main thing hurting your score are the five late payments. In time, the effect of those late payments will reduce, but in the short-term it is not something you can change (unless you are able to get the lender to remove it). 

Don't let both credit cards report a zero balance. Make sure at least one reports a balance between 1-9% and the other reports a zero balance. This will maximize your score from a utilization basis. Closing out your autoloan is a harder decision. You might want to reduce the amount of the loan or close it out and take a smaller loan to improve your DTI without getting rid of an installment loan. If you have other installment loans (e.g. student loans), this won't be as much of an issue. 

[Anonymous]

Thanks for the info.

Im currently on the phone with capital one to see if i can get a goodwill adjustment and get those lates removed. I doubt it will work but who knows...

[aav]

Don't let the mortgage company check your credit frequently without your consent. When refinancing mine checked it everyday hoping to get a higher score and the inquires dropped my score and they stayed on my acct for two years. Normally shopping for a mortgage should not do that, but I had to wait for each one to drop before I could really improve my score. 

[Anonymous]

So get this...

One of my capital one cards reported last friday. So instead of taking a shot in the dark and having them pull my credit i figured id pay the $60 and do a soft pull here to see where im at.

Heres what i got!

Equifax - 726

Transunion - 702

Experian - 698

Im so suprised by such a huge jump that im still not certain these are my scores! I used the simulator and saw that if i pay off the $200 balance on my other capital one credit card ($750CL) i will be in the 730-750 range for all three reports. Im so shocked that my two credit cards have that much effect on my scores!

[IamB2]

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@Anonymous wrote:

So get this...

One of my capital one cards reported last friday. So instead of taking a shot in the dark and having them pull my credit i figured id pay the $60 and do a soft pull here to see where im at.

Heres what i got!

Equifax - 726

Transunion - 702

Experian - 698

Im so suprised by such a huge jump that im still not certain these are my scores! I used the simulator and saw that if i pay off the $200 balance on my other capital one credit card ($750CL) i will be in the 730-750 range for all three reports. Im so shocked that my two credit cards have that much effect on my scores!

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The scores you get on here may not necessarily be the same as the ones your lender gets. Mortgages use (generally) FICO 04 (an older version of the FICO score - developped in 2004) whereas this site uses FICO 08. I recently pulled my FICO 04 from equifax (Score Power) and it was 707, pretty close to my 710 that shows on here. So although they are close, it may be slightly higher on here.

[StartingOver10]

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@Anonymous wrote:

Hello everyone!

This is my first post here so just want to say thank you in advance for any help you guys may give me!

So im in the process of applying for my first mortgage and to make a long story short my DTI with the house is too high. One of the reasons its too high is because they average my income over the last 24 months but i just graduated from school last april so im sure you can see where that is a problem. Anyways... I need my credit score to be a 640 before they can go above 50% DTI for the loan. Unfortuantely im currently sitting at 622.

Now here is what ive done so far!

I have two capital one credit cards both of which had a $750 CL. I have paid both of those cards off and have stopped using them. One of the cards got a CLI of $3000 so my new limit is $3750...other card got denied. Now, one of my cards reports on the 19th and the other on the 3rd so once those hit my credit report im hoping for atleast some movement in my score.

The other thing required for me to get the mortgage and lower my DTI is to sell my truck. Currently i owe $26,7xx on it and thank god i have about $2000 in equity. My local dealer agreed to just write me a check for the vehicle and im not obligated to buy anything from them. The question is will getting rid of my auto loan help or hurt my score?!

I have 5 late payments in my credit history of 4 years. All of those five payments are from when i was in school. I tried calling capital one last night to see if i could get some of those removed as ive read of others sucess doing so and had no luck...

Any other ideas?

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Actually you have two issues:  DTI and score.  If you sell the truck is your DTI reduced enough so you don't need a 640 mid score?

When you are talking about mortgages, vehicle payments really hurt many people - exactly how it is hurting you. You are far better off getting rid of the truck  (and payment) so your DTI is reduced so you can afford the house. After you close you can go out and get another vehicle that will work for you with lower payments.

It is more important to have your DTI fit the guidelines.

As to the score, you can have a rapid rescore after you show your cards paid off, except for one card reporting at less than 10% of the credit limit.

Note:  the other poster warning you about not getting rid of the truck payment would be right if you had no other installment payments. However, don't you have student loans or some other installment?

[justrock]

I was a co-signer on my son's auto loan-- a $416 a month payment.  When that amount was in my DTI I was only qualifying for a $100,000 loan- not nearly enough to buy in my area.  The plan had always been for him to re-finance when I was ready to buy, so he did.  My score did not drop at all, in fact it went up a couple of points,  I then qualified for an additional $45,000 and got a lovely home that I just moved into this week.

[DallasLoanGuy]

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@Anonymous wrote:

Hello everyone!

This is my first post here so just want to say thank you in advance for any help you guys may give me!

So im in the process of applying for my first mortgage and to make a long story short my DTI with the house is too high. One of the reasons its too high is because they average my income over the last 24 months but i just graduated from school last april so im sure you can see where that is a problem. this is an interesting statement. we average 24 months income on self employed and commission incomes. are you one of those? reason i ask is.... we usually want 24 months employment for those. and you just got out of school Anyways... I need my credit score to be a 640 before they can go above 50% DTI for the loan. Unfortuantely im currently sitting at 622.

Now here is what ive done so far!

I have two capital one credit cards both of which had a $750 CL. I have paid both of those cards off and have stopped using them. One of the cards got a CLI of $3000 so my new limit is $3750...other card got denied. Now, one of my cards reports on the 19th and the other on the 3rd so once those hit my credit report im hoping for atleast some movement in my score.

The other thing required for me to get the mortgage and lower my DTI is to sell my truck. Currently i owe $26,7xx on it and thank god i have about $2000 in equity. My local dealer agreed to just write me a check for the vehicle and im not obligated to buy anything from them. The question is will getting rid of my auto loan help or hurt my score?! do you have another auto? the underwriter will question a recently paid off auto if it isnt a very old trade line. 

I have 5 late payments in my credit history of 4 years. All of those five payments are from when i was in school. I tried calling capital one last night to see if i could get some of those removed as ive read of others sucess doing so and had no luck...

Any other ideas?

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[ezdriver]

If you have alternative transportation solutions, then sell the truck. You then go get one or two additional credit cards. After 6 months of ontime payments [after losing the truck loan], you will be in a position to get that mortgage. That's what I would do anyway.