FICI 5/4/2 Conundrum: Few Open Accounts

[Anonymous]

Hello! First time poster here. I've read some posts on the topic of raising the stubborn FICO mortgage scores. I am going through the last stages of a divorce, and have begun paying off the many, many collection accounts we had.

It seems everything I've read says the FICO 2 is sensitive to balances on open accounts. I'm paying off old collections, but all of my accounts were closed for non payment. The only open credit cards I have are actually just user privileges on my mom's accounts.

I can manage 10% utilization on those accounts, but is that enough? I thought about opening more so I could manage them, but heard opening accounts is bad for FICO 2. I have one open installment loan with a perfect but short history, a clean student loan that will pay off soon, a closed 2nd mortgage and open mortgage that are current for the last few months.

Any advice on how to get unstuck?

FICO 8: 573/579/564
FICO 5/4/2: 533/508/512
FICO 9: 618/606/597

[AllZero]

Once all your collection updates as paid, is when the healing process can begin. Your scores will improve once the collections starts ageing.

Do you have any other derogatory or delinquency?

Are you planning to refinance your mortgage?

[Anonymous]

Thank you for taking the time to respond.

Everything open (not much) is current. But they have delinquencies from earlier this year. I really just started trying to turn things around late summer. I noticed that one of my creditors deleted the trade line once paid, and I expect 2 more to do the same. The one deletion that occured didn't really seem to improve my score much.

I have one creditor that reports an unpaid collection every month even though I'm paying them monthly to reduce the balance, so any gains I make through the beginning of the month gets seriously diminished when they report.

I'm not trying to refinance, but I'd like to be able to sell my home and buy another next year. It sounds like time, not new credit, is the answer?

[AllZero]

The recency as well as the severity of your delinquencies are impacting your score.

If you have major delinquency 90,120, etc. day lates, they will keep your scores supressed for entire time they are on your report. You might see some relief once it ages to 2 years.

As you've experienced, the monthly updated collection has kept your score suppressed. You won't see score improvement until the last collection has been paid.

If you can do PFD Pay For Delete, that would be great.

It's recommended to have 3 open revolving credit cards and 1 open installment (mortgage, student) loan for score improvement. Based on your scores, you'll probably need a secured card.

It's also recommended not to apply or obtain any new accounts 12 months leading up to a mortgage. So you'll have to time your application. You'll see a 10-15 point increase when AoYA Age of Youngest Account >12 months.

[Anonymous]

Thank you again. I think I'll have to try for an online lender for my mortgage next year just to move forward, then refinance once I can access lower rates. It seems non-bank lenders have more forgiving, albeit more costly, alternatives from what I've gathered.

[AllZero]

You're welcome.

Find a local credit union or lender when the time is right.