As is the case with many here, trying to secure a mortgage within the next year. F9 currently at 731...2,4,5 a little lower. I have a number of federal student loans that are showing as negative balance paid due to some forbearance a few years ago when I was between jobs. I've been paying them steady for a bit now, but I have to imagine it's pulling me back a bit as the notation under the 2,4,5 scores is something to the effect of balance too high in proportion to original amount" etc etc. Would a consolidation help me here? My loans are split into 6 different loans with Nelnet. My main concern is the AAoA, they're my oldest at 12 years.
I don't really understand how they're so negative, one of the loans for example is at $10,692/$6,500 or -64% paid.
Just looking for some advice as to whether this is something I should pursue. TIA
If you are going to apply for a mortage in less than a year, I would advise against it. It is true that you'll bring your utilization back "down" to 100%, but that's still nowhere near the 9% sweet spot that nets you extra points (assuming you have no other installment lines).
The mortgage algorithms/scores do not react well new tradelines and you can get a pretty good penalty for an age of youngest account being less than 1 year. The utilization of installments does not have as large of an effect as the utilization of credit cards, and >100% utilization is not uncommon for student loans.
I appreciate the response and that makes sense to me. My other installment loan, a car lease has been paid on time and is about 2/3 paid. My mortgage scores seem to be the ones lagging behind all the rest so I'm just trying to do whatever I can to tick them up. 1% CC util, inquiries will age off in July. It just seems like these are the bad guys.
I know you mention 1% utilization, but is that AZEO (all zero except one) for your revolvers? - Mortgage scores like that a lot. A bit of a pain to manage, but it does help.
Yep, 1% on revolvers. I'm trying to manage it, it's only been in practice for one month so I'm hoping the fruits of my labor will come to fruition soon!