Newbie Seeking Advice

[DollyLama]

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@Anonymous wrote:

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@DollyLama wrote:

Just to add, as if has been a shocker for many who apply for a mortgage and find out their scores are significantly lower. At minimum, 6 months before you think about shopping for a home, spend the $ here (the only place it's available) and get your 3B reports- as it will have your Mortgage scores, not just your FICO 8 scores, which can vary widely depending on the file, along with bankcard, auto scores, etc. Mortgage scores are typically a tri merge report from all 3 bureaus, they throw out the highest score and the lowest, and use your "middle score". 

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Thanks Dolly, just the type of helpful advice that I need. Curious: why 6 months prior?

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Because there is nothing worse than seeing someone come to the boards with their dream home, and a going off a FICO 8 score, only to find out due to length of credit, charge offs, lates are impacted tremendously more against mortgage scores. You do not want to be an active credit seeker in a short period of time before applying, you can work on any derogs as possible to get pay for deletes, or goodwill letters and off your report, not closed and paid, but off reports. Some will oblige others will not. Each application and approval will just reduce your average age of account. You want to make sure your are as optimal as possible, utilization, AZEO techinque. Credit mix is good and the Alliant is a soft pull. Mortgages different that they tend to look over the last 12-24 months of credit. Just be prepared as possible. If you are waiting on these new cards, with spring of 2018 as your target, your on the 6 month mark basically now. After all of the pre-qual that you have obtained and are reporting on your bureaus, it may be a good time to see where you stand then on mortgage scores, that will indicate to you if you should possibly garden more, let the credit history lengthen and establish, possible postponig mortage a few more months than anticipated. To get to the score that you need when you start house hunting and mortage app'ing.

A definite no-no is once your mortgage app is pre-approved and underway, do not apply for any new credit, do not raise your utilization on credit cards, they will rapid rescore right before you close on your mortgage. Which can cause problems. Not to long ago, someone went apping during the period, so they could buy appliances, shocker when the loan officers/underwriters see they were now no longer at prequal stage or better. 

ETA: Just a month ago, FICO 8 scores around 740, but 2 mortgage scores were about 666 and 675, huge difference! I have one $34 medical collection. Yesterday I pulled my report after talking with collection agency, still not sure if will be added back on, as things were reported inaccurately, so it did not show on this months reports, my mortgage score alone jumped to 738 and 753 with it off my report. Regardless that my FICO 8 maintained scores 738-741.

[Anonymous]

That makes sense to me Dolly, thanks for the info.  For clarification, Spring is my target for mortgage apping and pre-approval. I have already spoken to a friend (loan officer) and was told that I needed a 620 for my VA mortgage. I want to be 30-60 points higher than than when I apply. If it doesn't happen until Summer, I'm ok with that. My current home is paid for, so I'm not on a specific deadline to buy another house. From what I have read so far, the major challenge will be my short credit history - less than a year. Nothing I can do about that at this point.

I'll contact NFCU to inquire about a small loan to balance my file. 

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@DollyLama wrote:

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@Anonymous wrote:

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@DollyLama wrote:

Just to add, as if has been a shocker for many who apply for a mortgage and find out their scores are significantly lower. At minimum, 6 months before you think about shopping for a home, spend the $ here (the only place it's available) and get your 3B reports- as it will have your Mortgage scores, not just your FICO 8 scores, which can vary widely depending on the file, along with bankcard, auto scores, etc. Mortgage scores are typically a tri merge report from all 3 bureaus, they throw out the highest score and the lowest, and use your "middle score". 

---

Thanks Dolly, just the type of helpful advice that I need. Curious: why 6 months prior?

---

Because there is nothing worse than seeing someone come to the boards with their dream home, and a going off a FICO 8 score, only to find out due to length of credit, charge offs, lates are impacted tremendously more against mortgage scores. You do not want to be an active credit seeker in a short period of time before applying, you can work on any derogs as possible to get pay for deletes, or goodwill letters and off your report, not closed and paid, but off reports. Some will oblige others will not. Each application and approval will just reduce your average age of account. You want to make sure your are as optimal as possible, utilization, AZEO techinque. Credit mix is good and the Alliant is a soft pull. Mortgages different that they tend to look over the last 12-24 months of credit. Just be prepared as possible. If you are waiting on these new cards, with spring of 2018 as your target, your on the 6 month mark basically now. After all of the pre-qual that you have obtained and are reporting on your bureaus, it may be a good time to see where you stand then on mortgage scores, that will indicate to you if you should possibly garden more, let the credit history lengthen and establish, possible postponig mortage a few more months than anticipated. To get to the score that you need when you start house hunting and mortage app'ing.

A definite no-no is once your mortgage app is pre-approved and underway, do not apply for any new credit, do not raise your utilization on credit cards, they will rapid rescore right before you close on your mortgage. Which can cause problems. Not to long ago, someone went apping during the period, so they could buy appliances, shocker when the loan officers/underwriters see they were now no longer at prequal stage or better. 

ETA: Just a month ago, FICO 8 scores around 740, but 2 mortgage scores were about 666 and 675, huge difference! I have one $34 medical collection. Yesterday I pulled my report after talking with collection agency, still not sure if will be added back on, as things were reported inaccurately, so it did not show on this months reports, my mortgage score alone jumped to 738 and 753 with it off my report. Regardless that my FICO 8 maintained scores 738-741.

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[Anonymous]

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@Anonymous wrote:

A little backstory: For more than 15 years, I was self-employed and the majoriity of expenses were paid in cash assets (no cc)  Even my home was paid for in cash from savings.  To say my credit file was thin is a gross understatement.

6 months ago, I had an entry score in the low 500's with zero credit, zero aao.

Currently, this is what I have, and I am seeking advice on which direction to go to continue moving forward.

CapOne Platinum 200  5/17 perfect history 23% util.

CapOne QS1       400  9/17  (new) prequal - 0

Creditone             400  9/17 (new)  prequal - 0

Victorias Secret   350  9/17  (new)  prequal-  9% util.

J Crew                 250  9/17  (new)  prequal - 0

The only one reporting now is the CapOne MC. The rest are new this month when I went on a prequal spree to see what offers were available.

I understand that I have a thin file, and the balance isn't optimal; I would like to buy another home early next year, so my goal is to have a thick enough file to get the best rate.

I have a NFCU acct, that I opened this month, but didn't apply for anything yet; really would like to wait a few months to age some of these new accounts.

My current score is FICO8 EQ 603. That is the only one reporting a score right now.

I'm not really sure what to expect, but would love to have score in the mid - high 600's before I apply for a mortgage.

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Looks like your on the right path.   I would say go for the nfcu asap, as I got one a lot lower than your score, and try to get rid of the credit one. Subprime cards can be shady.  

Your killing it otherwise, so keep up the great job.

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

A little backstory: For more than 15 years, I was self-employed and the majoriity of expenses were paid in cash assets (no cc)  Even my home was paid for in cash from savings.  To say my credit file was thin is a gross understatement.

6 months ago, I had an entry score in the low 500's with zero credit, zero aao.

Currently, this is what I have, and I am seeking advice on which direction to go to continue moving forward.

CapOne Platinum 200  5/17 perfect history 23% util.

CapOne QS1       400  9/17  (new) prequal - 0

Creditone             400  9/17 (new)  prequal - 0

Victorias Secret   350  9/17  (new)  prequal-  9% util.

J Crew                 250  9/17  (new)  prequal - 0

The only one reporting now is the CapOne MC. The rest are new this month when I went on a prequal spree to see what offers were available.

I understand that I have a thin file, and the balance isn't optimal; I would like to buy another home early next year, so my goal is to have a thick enough file to get the best rate.

I have a NFCU acct, that I opened this month, but didn't apply for anything yet; really would like to wait a few months to age some of these new accounts.

My current score is FICO8 EQ 603. That is the only one reporting a score right now.

I'm not really sure what to expect, but would love to have score in the mid - high 600's before I apply for a mortgage.

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Looks like your on the right path.   I would say go for the nfcu asap, as I got one a lot lower than your score, and try to get rid of the credit one. Subprime cards can be shady.  

Your killing it otherwise, so keep up the great job.

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Thank you, I appreciate the encouragement!  

Question for you since you mentioned NFCU:  What products/ starting limits were you approved for? When is the eligibility for CLI?

[Anonymous]

UPDATE:

I secured a small installment loan today; that'll do it for me for the rest of the year. no more apps. just wait and see how the scores go after a few months of all these new accounts reporting.

3 credit cards, 2 store cards, and one installment loan should be good for a while. Gardening now. Think I'll wait a while on NFCU cards, probably after closing the new house.

[Anonymous]

Looks like you're all set for now. While waiting on spring to roll around doing some browsing in the mortgage threads. The more you know, the less anxious you will be during a very stressful but exciting time. Good luck going forward and keep us updated. We love hearing success stories.

[Anonymous]

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@Anonymous wrote:

Thank you, I read that Cap one does automatic CLI after the 5th statement is cut, that's another few weeks, so I'm going to wait and see.  RE the CreditOne, I haven't used it yet, but since I've already been charged the AF, my plan is to hold on to that one at least until I get a card with a 4 digit CL, preferably from NFCU.

I don't have an installment loan; I realize that is part of the balance/formula, but I'm leary of another HP at this point. Would rather wait a few months on that, unless I can get an installment loan with a soft pull.

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Don't wait for the automatic CLI! Go in to the website and request one NOW. You will still get the auto CLI at the 6 month mark.