Need Advice - Fico2,4, 5 needs repair

[Anonymous]

Hi, I'm new to the forum but came here after researching my scores.

I am in a situation where I need to refinance my house. I have over 120k in equity however when I applied yesterday I was declined due to my scores being too low.

I had been going off the score that credit karma showed me, which shocked me when my real fico scores came back (for mortgages).

My situation:

I need to refinance to do two things, pay off my credit card debt plus a charge off AND I need to buy out (partially) my coowner of the house.

I can probably get her (the coowner) to wait a little bit but I need to have an idea of how long I need to get my score up enough to get approved.

I was told I need a minimum of 620 to get approved.

Current scores: Fico 5=538, Fico 4=578, Fico 2=497

Fico 8=597,624,597

Reasons my score is low:

• Federal Loan that was put on defferment reported three months of overdue payments 90,120,150 days late. I have tried to get this removed since it was going on deferrement but apparently since it is federal they won't.
• late mortgage payment from December, paid december and january at the same time to catch up. Wells Fargo has said they won't remove that late note on my credit report either.
• late payments on other cards in 2011 and 2012 but all my current ones are up to date and not late.
• Charge off on one card. I got in a argument with the card company (I KNOW....) and didn't pay while we were disputing. they charged it off.
  • I've been offered three options 1) pay $1500 2) pay $4000 or 3) pay the full amount of $7200
  • I can pretty easily do 1 or 2, but was needing the refi to do 3 (which is what I intended to do...)

The credit simulators on EQ, EX and TU are all doing Fico 8 so I am not sure what would be my best moves to change the Fico 2,4,5

And I'm not sure what amount of time I would need to get my score up enough.

I just have to get it to 620 as the mid score so that I can refi.

Can you guys offer any advice? Do you have any ideas on what would be the best moves or how long it would take?

Thank you.

Todd

[medicgrrl]

What current cards do you have reporting open? What are the balances and credit limits? Paying the charge off will probably help because it's most likely affecting utilization. How old are the student loan lates?

[Anonymous]

FICO's score models, including the older ones, are based on giving negatives for:

• High utilization on one or more cards
• High overall utilization (this includes your balance on the chargeoffs if it is listed)
• Recent 30D lates (these hurt less after 2 years)
• Recent 60D lates (these hurt less eventually)
• Any 90+D lates/chargeoffs (these hurt for 7 years)
• Any public records (liens, bankruptcies, judgments, etc)
• Recent inquiries for credit
• Recent new account dings (these age off quickly)
• Low AAoA of all accounts

What's your utilization on EVERY credit card?

Do you have any public records?

What is your AAoA of all accounts?

When was your latest account open?

Unfortunately at your scores, you have a lot to attack all at the same time.  Getting the other person off the loan may not be feasible for quite a bit, your best bet may be to just sell the property and split the proceeds as your agreement tells you to, then go and rent while rebuilding.  Or get lawyers and have the other owner of the property finance you personally and you pay them off over a period of time at a specific interest rate.  Then get a roommate to pay rent and give that rent as payment to the other owner.

[Anonymous]

Negative:

Chase Card charge off: Balance = $7,086 with Limit = $6000 (opened 4/1/2006)

Collection (on equifax, not sure what it is for...)

$53

Open Cards: (Balance/Limit)

Capital One Visa: $1,394/$1,500 (11/1/2004)

Capital One MasterCard: $356/$500 (6/1/2005)

CBNA (Best Buy Card): $252/$300 (3/1/2012)

Synchrony (Walmart): $632/$660 (2/1/2016)

Target: $6,383/$6700 (11/1/2004)

Federal Student Loan:

90/120/150 late for July, August, September 2016.

[Anonymous]

You are maxed out on everything.  Take your open credit card balances and stick them in the "utilization sheet" on the credit spreadsheet in my signature.  This will tell you EXACTLY what to pay off to get your utilization to a happy place with FICO.

That chargeoff, if reporting a balance, is going to probably screw it all up though because it's reporting a $7000 balance with a $0 limit, so even paying down your open accounts may have little effect on your scores unfortunately.

This is a tricky one.  My guess is you're going to need somewhere around $20,000 just to get your FICO scores up, and you can't get that without refinancing.   Even hard money lenders will likely not touch your scores at this point and they'll charge a ridiculous interest rate if they do.

I would say your only bet at this point is to lawyer up you and the other seller and discuss payment options to pay them out over time, but that's dangerous because if you're late, they can foreclose on you and you'll get stuck with all the legal fees while they'll get the asset's net proceeds.

Your only positive outcome would be to just sell the property together, split the proceeds as your agreement dictates, and hope to buy your own place in 1-2 years or so after rebuilding.  If you use your proceeds from the sale to liquidate your high utilization, you may even get approved for a new mortgage in less than 6 months.  It's impossible to know.

[medicgrrl]

I think you're going to have to wait until December for no other reason than the mortgage late. You'll need 12 months with good payments. If you can do that then make a plan to pay off the CO first and then start working on paying off the credit cards over the next 6 months. I think your scores will be where you need them by then.

[Anonymous]

Does it matter if I pay the CO at the lower rate vs. paying the full balance?

When I do pay it is there anything to ask for credit report related or will just paying it take care of it?

[800goal800]

Question on your spreadsheet.   I have some chargeoffs that are showing a balance and a credit limit.   I'm assuming this is still factored into utilization and is applicable to your spreadsheet ?

[medicgrrl]

They'll show it as settled for less but that makes no difference in FICO scores

[Anonymous]

If they are reporting a limit, enter $0. If they are reporting a balance, enter that balance. I do believe chargeoffs can count against you.

I just realized that entering COs on my spreadsheet would break the account count tho, so I need to account for that somehow. I'll ponder it.