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What should I do next?

NQN87
New Contributor

What should I do next?

 I felt like I had a good foothold my rebuild...but now I'm not so sure. After going from scores around 539 to 622 just from paying down my CC balances...some of my scores are going down again. My family is trying to buy a house after being homeless for the last 4 years after I was honorably discharged from the military due to injury, so it's very stressful to see lowering scores.

 

My scores were:
1/03/2019 - Fico 8: EQ 622, TU 621, EX 602/Mortgage scores: EQ 621, TU 620, EX 601
Then:
1/13/2019 - Fico 8: EQ 622, TU 610, EX 626/Mortgage scores: EQ 621, TU 598, EX 607

 

MyFico said the EX raised on 1/13/2019 due to Fingerhut reporting a balance (opened last month) but all it said concerning TU was just the decrease on 1/11/2019, no reason why. It made my mortgage TU drop 22 points and now I fall below the min. middle score needed. I understand it's a marathon, not a sprint...but why is the score going down? Is it because my file is so thin?

 

I have:
Capital One Platinum - CL: $300 with a zero balance and currently restricted (most likely going to be closed by CapOne at some point, but reporting as current still).
FingerHut - CL: $300 with $56 balance (19%). I was going for a 1% balance but I messed up the reporting timing, I won't make the mistake again. My TU score went down before fingerhut started reporting.

 

Approved for but still in the mail and not reported yet:
Discover It - CL: $2,500
OpenSky - CL: $3,000

 

I do not have any open installments.

 

The advice I received in my original thread was to have 3 revolving accounts and 1 installment. I've been too nervous to take out a loan while trying to buy a house in the future. I have $45k in savings, so it's not the obligation that's holding me back...I'm just worried what it will due to my score and how it will look to a lender. When I play around with simulators, it shows my scores each going down by 10+ points if I take out a small loan. However, one of the negative factors on my TU is not having a non-mortgage installment reporting, so is that what's making it go down? Otherwise, I've had no changes that should make my TU go down. Open Sky doesn't check credit and Discover and fingerhut only checked my EX which did nothing to my score.

 

With wanting to qualify for a mortgage ASAP in mind, is the installment account what I'm missing or will that impact my score negatively? I have the ability to do a Shared Secure Loan through my bank - NFCU.

 

And I just want to thank this community again ~ Our lender had us so bummed out in November when he said it would be around 2 more years before we could get my scores to even break 620. You guys have been a lifesavor for my credit and peace of mind. It's been so hard these last few years and now there's a light at the end of the tunnel for myself, my wife, and our two little ones. So, thanks again!

Message 1 of 7
6 REPLIES 6
Overmedicated
Community Leader
Valued Contributor

Re: What should I do next?


@NQN87 wrote:

 I felt like I had a good foothold my rebuild...but now I'm not so sure. After going from scores around 539 to 622 just from paying down my CC balances...some of my scores are going down again. My family is trying to buy a house after being homeless for the last 4 years after I was honorably discharged from the military due to injury, so it's very stressful to see lowering scores.

 

My scores were:
1/03/2019 - Fico 8: EQ 622, TU 621, EX 602/Mortgage scores: EQ 621, TU 620, EX 601
Then:
1/13/2019 - Fico 8: EQ 622, TU 610, EX 626/Mortgage scores: EQ 621, TU 598, EX 607

 

MyFico said the EX raised on 1/13/2019 due to Fingerhut reporting a balance (opened last month) but all it said concerning TU was just the decrease on 1/11/2019, no reason why. It made my mortgage TU drop 22 points and now I fall below the min. middle score needed. I understand it's a marathon, not a sprint...but why is the score going down? Is it because my file is so thin?

 

I have:
Capital One Platinum - CL: $300 with a zero balance and currently restricted (most likely going to be closed by CapOne at some point, but reporting as current still).
FingerHut - CL: $300 with $56 balance (19%). I was going for a 1% balance but I messed up the reporting timing, I won't make the mistake again. My TU score went down before fingerhut started reporting.

 

Approved for but still in the mail and not reported yet:
Discover It - CL: $2,500
OpenSky - CL: $3,000

 

I do not have any open installments.

 

The advice I received in my original thread was to have 3 revolving accounts and 1 installment. I've been too nervous to take out a loan while trying to buy a house in the future. I have $45k in savings, so it's not the obligation that's holding me back...I'm just worried what it will due to my score and how it will look to a lender. When I play around with simulators, it shows my scores each going down by 10+ points if I take out a small loan. However, one of the negative factors on my TU is not having a non-mortgage installment reporting, so is that what's making it go down? Otherwise, I've had no changes that should make my TU go down. Open Sky doesn't check credit and Discover and fingerhut only checked my EX which did nothing to my score.

 

With wanting to qualify for a mortgage ASAP in mind, is the installment account what I'm missing or will that impact my score negatively? I have the ability to do a Shared Secure Loan through my bank - NFCU.

 

And I just want to thank this community again ~ Our lender had us so bummed out in November when he said it would be around 2 more years before we could get my scores to even break 620. You guys have been a lifesavor for my credit and peace of mind. It's been so hard these last few years and now there's a light at the end of the tunnel for myself, my wife, and our two little ones. So, thanks again!


Simulators are fun to play with but they are very unreliable.  Your score would raise upon getting an installment loan due to the point gain associated with credit mix.

 

I hear that Experian is rather solid when it comes to the number of accounts reporting a balance.  Transunion is not.  What your file is showing is that 50% of your accounts have balances.  This could be a factor in your score dropping on TU and not EX.  Your total UTI across all cards has also moved above the recommended ideal scoring bracket of 8.9%.  Without other info, it is hard to guess what may have caused a usually temporary score drop.  With the addition of your 2 new cards about to report, I would make sure only 1 still reports a balance.

 

It is recommended to not apply for any credit for at least 6 months before your mortgage application.

 

I don't know what your average age of accounts is but whenever you get a new card, that becomes lower which never helps your score.  I would say let the dust settle, no more credit cards, and look into the SSL from NFCU.  Good luck!

 FICO 8
Message 2 of 7
FiresOut
Super Contributor

Re: What should I do next?

+1 Overmedicated nailed it.

Message 3 of 7
DIYcredit
Frequent Contributor

Re: What should I do next?

Don't open a installment just to increase your Fico score the reward will be small.you should use use your current cc's plus the two coming to build a long history of on time payments.
Message 4 of 7
Overmedicated
Community Leader
Valued Contributor

Re: What should I do next?


@DIYcredit wrote:
Don't open a installment just to increase your Fico score the reward will be small.you should use use your current cc's plus the two coming to build a long history of on time payments.

The OP's stated goal is to raise their scores as much as possible to prepare for a mortgage ASAP.  They don't have the time to build up a long history of on time payments.  The 184 page Navy SSL thread suggests implementing this SSL technique will result around 28-35 points on average for FICO 8.  The OP is concerned enough to post about a temporary loss of 11 points.

 

This combined with at least 3 cards for the AZEO method, will help them gain as many points as possible for their future mortgage application.  Mortgage scores appear especially sensitive to the number of accounts with balances.  Ideally they would apply in just over a year because you certainly get an additional boost when your age of youngest account hits 12 months.

 FICO 8
Message 5 of 7
NQN87
New Contributor

Re: What should I do next?

Thank you guys for the replies. I'd love to hear anyone else's opinion, even if it's just agreeing with one or the other. I'm going to keep doing research and try to come to a decision about the SSL before next week. Any additional input from members is appreciated.

Edit: I was replying when the last reply was posted, I'm going to go check out that SSL thread.
Message 6 of 7
NQN87
New Contributor

Re: What should I do next?

Is it normal for the mortgage TU to drop double the amount of the FICO 8 TU? Like how my FICO 8 TU dropped 11 points but my mortgage TU dropped by 22 points? How do the rises work from anyone's experience? My FICO 8 EX raised 25 points but my mortgage EX only rose by 5 points.


Also, I assume its best if I do the SSL now rather than later since my AoYA is already at 0, right?
Message 7 of 7
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