how can I diversify my credit types?

[Anonymous]

I'm halfway through a 2-yr plan to improve my credit enough to qualify for a mortgage with good interest rate. I've raised my FAKOs about 50 points, to low 600s, just by the passage of time and paying on time, more than the minimum, reducing balances, and not applying for any new credit (except for utilities in April 07, when I moved to a new state).

Are old mortgages, revolving accounts, and credit cards counted in the "diversity" score? According to my triple report, which I got from CreditKeeper, counting all old accounts, I have had 3 real estate accounts (all paid off, the last one 2 years ago, but with some late payments), 9-12 revolving accounts (depending on which CRA you look at), and 15 installment accounts, which are student loans that have passed from one lender to another. TU calls 3 revolving accounts (including the current one) "Other Accounts"--these are Beneficial consumer loans that gradually got larger, each paying off the one before.

Of my currently active accounts, I have one CC with a $950 limit (currently $400 bal.), a Target card with a $200 limit ($0 bal., hardly ever use it), a student loan balance of about $60K, and a revolving (or TU "other" ) account balance of about $8K (down from $11K). The available credit on the revolving loan is zero because I am paying it through CCCS (my only payment thru them, & there is no mention of CCCS on my CR). I have not had a late payment on any acct. since Dec. 06.

I intend to apply for a mortgage in Feb. 2009, and by that time to have the revolving loan paid down to a balance of no more than $1500, which will be little less than 10 remaining payments at the minimum of $160 per (I read here that a balance equal to 10 or fewer payments would not be included in my DTI ratio).

Is this a diverse enough mix? In NO WAY do I want to take on an auto loan, I am quite happy with my old, completely paid-for car that I bought with cash. What other options would I have? I shudder at the thought of getting another credit card! I really do NOT want one!

Thanks for any analysis/help!!

Message Edited by nature_lover on 01-08-2008 03:22 PM

[fused]

I would say you have a good credit mix. And yes, open and closed accounts in good standing factor favorably and equally in FICO scoring. For a better score I would pay down revolving debt to less then 10% of your available credit on each account. For even a better score only carry a balance on one or two of your cards. As for the loans just pay em on time...never be late. You said your FAKOs are low 600s, why? Do you know your FICO scores? It's possible there could be a big difference between the two.

[Anonymous]

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@fused wrote:

. . . You said your FAKOs are low 600s, why? Do you know your FICO scores? It's possible there could be a big difference between the two.

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I had a string of 30 and 60 days on a mortgage in fall & winter 2006, and a couple of 30 day lates on my CC and Target card at that time also. I also had a couple of collections that I paid in Jan 07 but at a discount. I have written a GW letter to Homecomings about the lates on the mortgage but haven't heard anything from them yet. I'm also getting it together to write a GW to West Asset Mgt about one of the collections. I think I need to concentrate more on GW letters for now.

I'm holding off for a while on spending money for FICOs, until I've reduced my CC and revolving loan balances enough to feel that I might have made a big improvement. I do subscribe to CreditKeeper so I see all 3 reports every month, along with the 3 FAKO scores they provide. I know my util is still pretty high, so I'll just keep chipping away at it before I get the FICOs. I would like to see them, but I'm watching every penny, either paying down debt, or putting away toward a down payment.

Thanks for the encouraging words!

[fused]

It really sounds like you are on top of things. And yes, a credit monitoring service is the way to go...saves money. Stick around and let us know how things go. We all love to hear good news. GL!