Increasing Credit Limit

[BB42]

Hi All,

I've just started this June in trying to monitor and repair my credit score. I am new to the site and like many have made errors in managing debt, and errors in trying to fix it, including misunderstanding that all credit scoring is not created equal(fakos). Looking to purchase a home April of 2017, so I have a few months to make score improvements. I've met with a mortgage broker and provided him a 3 bureau credit report, he was not concerned with me being approved as my incomes is good,monthly DTI is 9%, no liens ,judgments or bankruptcies. He just urges improvement in the FICO

1. My scores listed below are as of June 28th with me at 69% utilization on my credit union issued Visa CC which I just got 11/15. It's my first CC and has a $5K limit, I will have it down to 30% this month and by Summer's end have it and will keep it @ 9% ..so I expect a bump up

2. I have some medical collections that I just arranged pay for deletion, but they haven't posted yet, so I'm hoping a bump of some sort in the next cycle


3. I have (2) auto loans that are closed and paid satisfactory in 2015, but they incorrectly show several 30 day late payments in 2014 (there are some legit one that show for 2013)

I have documentation that shows there were no late payments after December 2013 on the auto loans ....is it worth disputing those payments as the accounts are closed? I don't expect much of a bump if any in score, but wanted the credit report to read more accurate so no questions would be raised by lenders


We've not had a mortgage since 2012 and were never late on it, nor have I been late on any type of payment (auto, student loan or CC) since 2013.

Anyone see a reason why I should not be @ 675 on a middle mortgage score when applying in January for pre approval ? Secondly, someone suggested that I ask for a CC increase, which would automatically lower my utilization...however, I'm already committed to paying the balance down over the next 6 weeks, so regardless of limit, I would not use the card more

Thanks for your insight



6/28/2016
FICO 8
EQ: 632 TU: 651 EX:639


MORTGAGE
EQ:620 TU: 612 EX:647

[Anonymous]

I think you will be looking very good come January if you can get your utilization below 10% and you have no new delinquencies.

I would say that if increasing your limit only involves a "soft inquiry" on your credit then you have nothing to lose by applying. Now, if it is a hard inquiry that's another story given that you are applying for a mortgage.

I don't know how many cards you have, but the optimal number for FICO is 3, so keep that in mind as well.

Good luck!

[Anonymous]

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@BB42 wrote:
Hi All,

I've just started this June in trying to monitor and repair my credit score. I am new to the site and like many have made errors in managing debt, and errors in trying to fix it, including misunderstanding that all credit scoring is not created equal(fakos). Looking to purchase a home April of 2017, so I have a few months to make score improvements. I've met with a mortgage broker and provided him a 3 bureau credit report, he was not concerned with me being approved as my incomes is good,monthly DTI is 9%, no liens ,judgments or bankruptcies. He just urges improvement in the FICO

@1. My scores listed below are as of June 28th with me at 69% utilization on my credit union issued Visa CC which I just got 11/15. It's my first CC and has a $5K limit, I will have it down to 30% this month and by Summer's end have it and will keep it @ 9% ..so I expect a bump up

2. I have some medical collections that I just arranged pay for deletion, but they haven't posted yet, so I'm hoping a bump of some sort in the next cycle


3. I have (2) auto loans that are closed and paid satisfactory in 2015, but they incorrectly show several 30 day late payments in 2014 (there are some legit one that show for 2013)

I have documentation that shows there were no late payments after December 2013 on the auto loans ....is it worth disputing those payments as the accounts are closed? I don't expect much of a bump if any in score, but wanted the credit report to read more accurate so no questions would be raised by lenders


We've not had a mortgage since 2012 and were never late on it, nor have I been late on any type of payment (auto, student loan or CC) since 2013.

@Anonymous see a reason why I should not be @ 675 on a middle mortgage score when applying in January for pre approval ? Secondly, someone suggested that I ask for a CC increase, which would automatically lower my utilization...however, I'm already committed to paying the balance down over the next 6 weeks, so regardless of limit, I would not use the card more

Thanks for your insight



6/28/2016
FICO 8
EQ: 632 TU: 651 EX:639


MORTGAGE
EQ:620 TU: 612 EX:647

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Welcome to myfico forums.

If the CU credit card is your only CC,   for FICO scoring purposes, you need 2-3 positive credit cards reporting and 1 installment loan reporting positive payments.  Are you still paying the student loans or mortgage?  If so, either will count as the installment loan.   You can look into a prequal for Cap 1 and see if anything shows up.  This could give you a 2nd and 3rd.  Also you could consider secured credit cards.  I started off with a secured Cap 1 and secured Discover card when I started rebuilding. Also, as you correctly pointed out, keeping your UTI under 10% is optimum.  How is the auto loan company that you dealt with?  Would they go back the entire duration of the loan and check each payment to see if it was late?  If not, and they will work with you, then it shouldn't be any problem getting the lates corrected, but if it were me, I would focus more on things that I can control like UTI and positive payment history, and taking care of the medical collections.  Good luck.

[BB42]

Thanks for the response and feedback!  It was a small hometown bank that financed my (2) auto loans that had the error, the bank has since been taken over by another, including a change of administration, so the loan officer who could confirm the error is gone.  I'm certain the payments were on time, because I use autopay from a national bank, so I'm able to down load the payments trail and all of the payments (checks direct from the bank) are listed and show process dates withine 3 days of my payment due date.  So I never was outside my grace days, let alone 30 days late. 

I do pay my student loans on time, and I have one auto loan.  outside of the credit union CC, that's all I have going.  Should I wait unti my CC reaches 1 year old (Ocbober) before I apply for another secured card?

[Anonymous]

I'd go ahead and get 2 more cards now, from my understanding new credit shouldn't (if possible) be opened within 6 months of getting a mortgage. And the month before you start the mortgage process have 2 cards report a zero balance and 1 card report a balance of less than 10% for optimal scoring

[Anonymous]

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@BB42 wrote:

Thanks for the response and feedback!  It was a small hometown bank that financed my (2) auto loans that had the error, the bank has since been taken over by another, including a change of administration, so the loan officer who could confirm the error is gone.  I'm certain the payments were on time, because I use autopay from a national bank, so I'm able to down load the payments trail and all of the payments (checks direct from the bank) are listed and show process dates withine 3 days of my payment due date.  So I never was outside my grace days, let alone 30 days late. 

I do pay my student loans on time, and I have one auto loan.  outside of the credit union CC, that's all I have going.  Should I wait unti my CC reaches 1 year old (Ocbober) before I apply for another secured card?

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@Anonymous @Anonymous said you have 3 months to apply for new credit prior to your mortgage.  At this point it shouldn't be about limits, but getting 2 cards to maximizing scoring and being smart about what cards to apply for.  Cap 1 is usually good cause they have the prequal.  Discover can be iffy.  Barclays approves with your current scores, but likes a year of payment history though.  There are good secured cards and if you look on the forum you could find more information on them. 

[Anonymous]

I'd definitely recommend Capital 1 in this scenario along with Bank of America secured (not unsecured). Use the pre-qual tool for Capital One to see what cards you can get and also app for B of A. I had their secured card and in 5 months it graduated to unsecured and I got a 3X increase to boot!

[RonM21]

I think you will get there OP, especially if you pay down the utilization and the accounts that were said to be being deleted come off. This in combination with some of the suggestions given to you about where to go from here.

I do agree with the recommendation of Cap1 for another card for sure. Maybe even for 2.

[BB42]

I receive Cap 1 CC offers that I supposedly pre-qualify for weekly in my mailbox . These letters immediately head to the trash as I was not in the market for a new card. After reading the advice here, I searched the house hoping one of these letters survived, but no success. I did go to the site, did the prequalify tool,  it suggested a quicksilver rewards card, so I applied online…but no instant approval?!?!?!?!

Within seconds of me hitting the submit button online, my alert for Transunion sounded. I’m now second-guessing if I should have waited for my current CC to report before applying for Cap 1.   Although as of today utilization is at 30%, it won’t update to the bureaus until the 12th so it isn’t reflected in score or the report.

So if Cap 1 pulled the TU it most likely showed when I was at at 69% utilization.

The message from Cap 1, was …”we’ll need more info before a decision” so hopefully they will at least call or email so that I can clarify. Surely don’t want to lose points for inquiry and not be able to make them up from the gains of CC usage.

[Anonymous]

Call Cap1 (not sure if they are open on Saturdays). It might be a verification issue, it was for hubby. He was approved immediately when he called. And Cap1 pulls all 3 bureaus