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Consolidate or leave as is - negative % paid

ryant601
Member

Consolidate or leave as is - negative % paid

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

FICO8 Scores:
Starting: EQ: 545 TU: 582 EX: 565
11/2020: EQ: 668 TU: 704 EX: 693

05/2021: EQ: 713 TU: 726 EX: 715
Goal: EQ: 725 TU: 725 EX:725
Message 1 of 5
4 REPLIES 4
calyx
Super Contributor

Re: Consolidate or leave as is - negative % paid

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.     




F8 EQ: 809 | EX: 802 | TU: 805 | Accounts: 1/6 4/12 6/24
Happy practitioner of AZE7or8or9or10 | Team Finances > FICO
Message 2 of 5
ryant601
Member

Re: Consolidate or leave as is - negative % paid

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. 

FICO8 Scores:
Starting: EQ: 545 TU: 582 EX: 565
11/2020: EQ: 668 TU: 704 EX: 693

05/2021: EQ: 713 TU: 726 EX: 715
Goal: EQ: 725 TU: 725 EX:725
Message 3 of 5
calyx
Super Contributor

Re: Consolidate or leave as is - negative % paid

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.





F8 EQ: 809 | EX: 802 | TU: 805 | Accounts: 1/6 4/12 6/24
Happy practitioner of AZE7or8or9or10 | Team Finances > FICO
Message 4 of 5
ryant601
Member

Re: Consolidate or leave as is - negative % paid

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!

FICO8 Scores:
Starting: EQ: 545 TU: 582 EX: 565
11/2020: EQ: 668 TU: 704 EX: 693

05/2021: EQ: 713 TU: 726 EX: 715
Goal: EQ: 725 TU: 725 EX:725
Message 5 of 5
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