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I've been reading these myFICO boards, and I really appreciate all the input. Recently I have been rebuilding my credit, and I'm hoping for some feedback on taking the next steps. Here's my story....
For all my adult life, it seems I have just put my head in the sand when it comes to debts and credit. I never really believed in credit, but always managed to be in debt somehow. Now I have a new philosophy about credit and money. I see credit as a way to manage cash flow rather than just to get more money. I can remember once having $1400 in accounts receivable and being dead broke -- stuck on the road with no gas in the tank and no recourse but to go to family. Not anymore.
RESULT: I am now showing EQ 734 and EX 732 -- in less than three months! Waiting for TU score.
My income is low (about $30,000 now and going up), but here are my goals, in priority order:
1) Purchase home
2) Purchase new/late model car
3) Navy Federal CLI increase to $25k (for the thrill of it!)
4) Great travel card, maybe Chase Sapphire
So finally, here are my questions:
Thanks very much in advance for reading and any advice. God bless all you fellow veterans!
First off, congrats on a 200 point increase so quickly. That's fantastic! Second, all of your goals are good and achievable, but ideally you want to wait a year between a mortgage and your most recent credit HP. This allows for you to regain points when your youngest account reaches a year, and demonstrates a lack of credit seeking behavior. I would wait on anything that takes a hard pull - new accounts, loans, and some CLIs. If you can get a soft pull CLI, go for it. Otherwise, just keep doing what you're doing - you're doing great
Congrats on all of your progress!
What was mentioned above - wait 6 months minimum, a year is way better, before attempting a mortgage.
The scoring algorithms that are used for mortgages are super, super sensitive to new accounts, and HPs. In addition, look into AZEO when you get close to thinking of applying for a mortgage because those algorithms also like to see only one account (technically less than 30% of your accounts, 1 just to be safe) with a balance on it.
In addition - you only need one secured loan reporting to keep the "installment loan" credit mix happy, so if you need to cash out one of the ones you created a bit early, you'd be OK.
Thanks for the advice. My secure loans were only meant for six months, but I nearly have them paid off. There is $55 left on each one. So I plan to make a $45 payment on each this month and leave the remainder for December. That gives me four more on-time payments. I do have the four student loans accounts, and I think those will count as installment loans for the credit mix.
I took a look at AZEO, and it turns out that I'm already doing that. The first month I just left $10 on one card and PIF on the other two. This month I did $5 on one and $0 on the other two. So I will keep doing intentionally what I was already doing anyway.
I"m tempted to try something else with my improved credit -- car loan, CLI, or new card -- but you're both right. I should hold off on any credit changes until I try for the mortgage. If I wait until May, that will be 8 months since the last hard pull and new credit account. Now I'm just concerned about being able to afford it. I probably should concentrate on increasing my income between now and then.
And I should celebrate my success. If all goes well, I should easily be over 750 between now and next May. If somehow it shoots up by Jan 1st, I may come back and revisit this question. I mean, if I make 780 or 790 in the next few months, I might have something to work wihth
@Anonymous wrote:Thanks for the advice. My secure loans were only meant for six months, but I nearly have them paid off. There is $55 left on each one. So I plan to make a $45 payment on each this month and leave the remainder for December. That gives me four more on-time payments. I do have the four student loans accounts, and I think those will count as installment loans for the credit mix.
I would just pay them off and be done with them. Your student loans cover the installment requirement for credit mix, so pay these two off and have two fewer bills to pay, as well as two closed-in-good-standing accounts that will stay as such on your reports for up to ten more years.
I took a look at AZEO, and it turns out that I'm already doing that. The first month I just left $10 on one card and PIF on the other two. This month I did $5 on one and $0 on the other two. So I will keep doing intentionally what I was already doing anyway.
Perfect.
I"m tempted to try something else with my improved credit -- car loan, CLI, or new card -- but you're both right. I should hold off on any credit changes until I try for the mortgage. If I wait until May, that will be 8 months since the last hard pull and new credit account. Now I'm just concerned about being able to afford it. I probably should concentrate on increasing my income between now and then.
If you can push back four more months, so that your youngest account reaches a year, that's a 15-20 point gain in the pocket. But I do understand that with a purchase as big as a house, if the time is right, you do it. If you can wait for that though, your scores will be that much better.
And I should celebrate my success. If all goes well, I should easily be over 750 between now and next May. If somehow it shoots up by Jan 1st, I may come back and revisit this question. I mean, if I make 780 or 790 in the next few months, I might have something to work wihth
I hope that works out for you - all the best in your push for a home
Oops. Missed the student loan line. Carry on.
I agree with @Anonymous - pay off the secured loans. You have student loans so you don't need the extra installments.
Don't be fooled by "number" or percentage of payments - that doesn't really matter. You just have to keep utilization low and not miss any payments and let your accounts age.
@calyx wrote:I agree with @Anonymous - pay off the secured loans. You have student loans so you don't need the extra installments.
Don't be fooled by "number" or percentage of payments - that doesn't really matter. You just have to keep utilization low and not miss any payments and let your accounts age.
@calyx Glad you caught the student loans. Missed it and edited my post. Duh!
@FireMedic1 wrote:
@calyx wrote:I agree with @Anonymous - pay off the secured loans. You have student loans so you don't need the extra installments.
Don't be fooled by "number" or percentage of payments - that doesn't really matter. You just have to keep utilization low and not miss any payments and let your accounts age.@calyx Glad you caught the student loans. Missed it and edited my post. Duh!
@FireMedic1 You know I love me some student loans (I mean, I don't really...)
@calyx wrote:
@FireMedic1 wrote:
@calyx wrote:I agree with @Anonymous - pay off the secured loans. You have student loans so you don't need the extra installments.
Don't be fooled by "number" or percentage of payments - that doesn't really matter. You just have to keep utilization low and not miss any payments and let your accounts age.@calyx Glad you caught the student loans. Missed it and edited my post. Duh!
@FireMedic1 You know I love me some student loans (I mean, I don't really...)
@calyxYour my go to for those things. They didnt have all these ways to get them right in the 80's. Get a loan, pay it, or else back then. LOL!