20 point score increase?

[brinleys]

We are rebuilding our credit after a brain tumor in 2020 for my husband and cancer last spring for me - thankfully we are both healthy now.  

We have been renting for 2 years and now our landlord wants to sell our house and we would love to purchase it. After a brain tumor for my husband, the loss of a baby in December 2023, and cancer for me last year our credit has taken a hit and we have wiped out our savings. Our "Fico 8" is between 578 and 598. We have no debt. Last week we paid off a secured credit card, we are hoping that our pay to delete for another small credit card is approved, and we paid the final payment on our car loan. We had previosly paid off all student loans, and own the other 2 vehicles (one for our teens to share and a van to haul kids).

Yearly income $135K, Purchase price of the home is 200K - the house is a heck of a deal, 3500 sq feet, 5 bedrooms, 2 bathrooms and sits on half an acre in town. It only lacks a garage. The landlord would like to sell in the next 60 days.

We are working with a local mortgage lender and he can do a USDA loan if we can get our middle credit number to 600 - we are 20 points shy - how likely is it with the payoffs of the rest of our debt this month for our score to move that much?  Does anyone have any tips or are we wasting our time even trying.  

[FicoMike0]

Welcome to the forum, you came to the right place, some who post here really know this stuff.

60 days is tight, but likely doable.

For the wizards to give best advice, list all accounts, limits and balances.

No auto, student, or other installment loan?

If no, look up ssl. 20+ points there. Paying off auto loan will likely result in a score penalty, ssl will at least get that back.

On revolving accounts, you want to do azeo, look it up, and manage reported utilization. You want total utilization to report under 9% and individual under 29%. Make sure you understand  reported  utilization. If you paid all accounts to zero, another penalty. Look up all post dates, you'll want to start azeo right away.

Mortgage scores are not fico8. You should get all three (or six, since there are two of you) mortgage scores so you have a baseline. I'm sure myfico has a paid sub for that, but credit.com offers a seven day free trial that provides them too.

[FlaDude]

As @FicoMike0 said, older FICO models are typically used for mortgages. These are often different than FICO 8. Is the item you are planning to PFD your only charge off or derogatory mark, or will there still be others if this goes away? This probably would have been better posted in the Mortgage forum, but I'll tag  @ShanetheMortgageMan so maybe he can chime in.

[ShanetheMortgageMan]

The FICO scores that mortgage lenders use are versions 5/4/2, and they can definitely be obtained here at myFICO with the "Advanced" product.  Usually the FICO 5/4/2's are lower than FICO 8 scores, but not always.  Since you are preparing to purchase I'd strongly recommend you review the version that mortgage lenders use, or you could be in for a surprise.

Regarding the SSL (Share Secure Loan) technique, I hadn't heard of that until @FicoMike0 mentioned it, but I was able to find a prior thread with a ton of good information on it at https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Sec... which may help you.

Definitely need to know what delinquent marks appear on your credit over the past 24 months.  Can you provide a list of each one and the month/year it occurred?  Outside of bankruptcies, foreclosures and short sales, USDA financing is generally concerned with your credit history over the past 12 months.  Have all payments been made on time for that long?

@FicoMike0  I wasn't aware that Credit.com provides the 5/4/2 versions for free, I went to their website and it says that they give a free Experian® Vantage 3.0 credit score, are you certain they also provide the FICO 5/4/2's as well?  Not doubting you, just genuinely curious.

[FicoMike0]

@ShanetheMortgageMan 

I haven't tried credit.com for probably a year. I'll try them again. I distinctly recall that they had all numbered fico versions through 9, including the auto and bank card versions. A lot of scores! No version 10. 

I just tried them again. When I log in I get 

Technical Faliure 

Here's a link for a 7 day free trial.

https://www.credit.com/extracredit

[FicoMike0]

As far as the ssl, it worked for me in both fico8&9. I didn't check mortgage scores.

It adds an installment loan for credit mix and optimizes associated utilization, under 9%. The boost showed up as soon as it reports. The big issue is being able to prepay 91% without accelerating the loan term, which only nfcu and penfed do. This isn't an issue for the op, since they're only looking for a 60 or so day boost. Still, these loans are at 2%, pretty cheap.  Everyone loves navy, but you need military association to join. Anyone can join penfed, but they have a 30 day wait after deposit. Then it may take 30 days to report, there's 60 days. 

No time to think! I'd hate for these folks to miss out, it sounds like a good deal.

[Realist]

---

@brinleys wrote:

We are rebuilding our credit after a brain tumor in 2020 for my husband and cancer last spring for me - thankfully we are both healthy now.  

We have been renting for 2 years and now our landlord wants to sell our house and we would love to purchase it. After a brain tumor for my husband, the loss of a baby in December 2023, and cancer for me last year our credit has taken a hit and we have wiped out our savings. Our "Fico 8" is between 578 and 598. We have no debt. Last week we paid off a secured credit card, we are hoping that our pay to delete for another small credit card is approved, and we paid the final payment on our car loan. We had previosly paid off all student loans, and own the other 2 vehicles (one for our teens to share and a van to haul kids).

Yearly income $135K, Purchase price of the home is 200K - the house is a heck of a deal, 3500 sq feet, 5 bedrooms, 2 bathrooms and sits on half an acre in town. It only lacks a garage. The landlord would like to sell in the next 60 days.

We are working with a local mortgage lender and he can do a USDA loan if we can get our middle credit number to 600 - we are 20 points shy - how likely is it with the payoffs of the rest of our debt this month for our score to move that much?  Does anyone have any tips or are we wasting our time even trying.  

---

Doesn't hurt to ask, but why not ask the owner if they would consider a land contract for "x" amount of years?  Considering you have an already proven history of payment, you can mention you need some time to set things right with a lender, to buy out the property properly, sooner than later.

This provides upside for you and your family, and should the market remain stable, upside for the seller also.  This provides you with both time, and potential equity towards the value of the future purchase, and for the seller, if you bulk, he keeps all the payments, and reaquires the property for resale at a later time.      Sometimes it might make sense to sweeten the pot on payment, but also knowing this may go towards the property purchase.

Oddly, I have cousin who has incredibly low credit scores.  It's never stopped him from acquiring houses on land contract.  I do know there are properties and owners out there for these kinds of deals.