Advice Needed: Close Store Cards to Raise TU4 Scor... - myFICO® Forums

jrands · ‎07-25-2020

Hello Everyone,

Trying to raise my FICO mortage scores, especially the TU score and just looking for some advice. Looking for a home with my window being anytime within the next year. Here are my current mortgage scores:

EQ5: 762

TU4: 730

EX2: 782

For TU, it seems to factor in the fact that I have store cards. Should I consider closing them to try and increase the score? Currently, my overall max available credit is $97,450 with an overall credit utilization of 20.3%. None of my store cards have balances. If I closed all three store cards, my overall max available credit would decrease to $90,250. Based on my current balance of $19,750, my overall utilization would go up to 21.9%. Based on what I've read here, it doesn't seem like I'd cross any overall credit utilization thresholds since I am currently under the 28.9% threshold and the next threshold is 8.9%. On another note, I took out two loans, one in June 2019* ~~2020~~ and the other in July 2019* ~~2020~~. Based on my score updates today, my mortgage scores did not change, so not sure if them being a year old now affects anything. Also not sure if they've been accounted for yet. (*Corrected to year 2019)

For some additional info, just got my CapOne 4 card to below the 48.9% threshold and it was just reported today. It was at 50.4% last month and is now at 48.4%. Got the following FICO 8 updates just today as well and saw some pretty dramatic increases! EDIT: My mortgage scores remained the same.

EQ8: 796-->811 (+15)

TU8: 784-->805 (+21)

EX8: 796-->807 (+11)

I also got my BoA 2 card to below the 48.9% threshold as well, but it will likely post in a couple of days. It was at about 59% last month. Lastly, based on the advice received from here (), I also paid off Store Card 3. It was at 16.7% utilization ($450/$2,700) last month. Unfortunately, it won't report until the 15th of next month, but hoping it will provide a boost.

Here is my credit profile:

Credit Cards

BoA 1: $0/$4,200 (0%)

BoA 2: $10,080/$21,500 (46.9%)

CapOne 1: $0/$500 (0%)

CapOne 2: $0/$5,250 (0%)

CapOne 3: $0/$20,000 (0%)

CapOne 4: $9,670/$20,000 (48.4%)

Chase: $0/$7,500 (0%)

Credit Union Secured: $0/$500 (0%)

US Bank 1: $0/$5,000 (0%)

US Bank 2: $0/$6,000 (0%)

Store Card 1: $0/$2,000 (0%)

Store Card 2: $0/$2,500 (0%)

Store Card 3: $0/$2,700 (0%)

Overall Utilization: $19,750/$97,450 (20.3%)

Loans

Car: $32,265/$37,640 (opened 6/2020)

Personal: $41,770/$48,900 (opened 7/2020)

AllZero · ‎07-25-2020

The store cards are not suppressing your scores. Your reported utilization is.

Zeroing out store card 3 may offer a few points in addition to reduced utilization on BoA 2.

Seek AZEO reporting a balance. Optimized is

Individual 1-29% utilization.

Aggregate 1-9% utilization.

I would recommend reading the below from ABCD2199
The Truth about Credit Card Utilization
My 11 Rules to Credit Rebuilding
FICO Score: What to pay down first?

jrands · ‎07-25-2020

@AllZero wrote:
The store cards are not suppressing your scores. Your reported utilization is.

Zeroing out store card 3 may offer a few points in addition to reduced utilization on BoA 2.

Seek AZEO reporting a balance. Optimized is
Individual 1-29% utilization.
Aggregate 1-9% utilization.

I would recommend reading the below from ABCD2199
The Truth about Credit Card Utilization
My 11 Rules to Credit Rebuilding
FICO Score: What to pay down first?

Thanks! Yes, I am planning to get BoA 2 card to 27% next month, and paid completely off by December. Next will be to get my CapOne 4 card to below the 28.9% threshold by Feb of 2021 and be paid off completely by April 2021. EDIT: Once I pay off my CapOne 4 card, I will plan to practice AZEO though to keep the scores up.

Trudy · ‎07-25-2020

Note that <29% is said to be the ideal UTL for an individual card, but <9% is ideal for aggregate UTL. When planning for a MTG it is advised to not app within the year. MTG scores like accounts at least 1 year old so if "within the next year" can be a year+ from now since you just opened 2 new accounts that should definitely get you where you want to be. In addition, if any points were lost from the INQ's for those 2 loans reach a year+ you will get those points back. And as you mentioned AZEO since MTG scores are also sensitive to # of accounts reporting a balance.

FICO - 8: 05/05/23

jrands · ‎07-25-2020

@Trudy wrote:
Note that <29% is said to be the ideal UTL for an individual card, but <9% is ideal for aggregate UTL. When planning for a MTG it is advised to not app within the year. MTG scores like accounts at least 1 year old so if "within the next year" can be a year+ from now since you just opened 2 new accounts that should definitely get you where you want to be. In addition, if any points were lost from the INQ's for those 2 loans reach a year+ you will get those points back. And as you mentioned AZEO since MTG scores are also sensitive to # of accounts reporting a balance.

Thank you Trudy! Your post made me realized that I misreported the years of the two loans. They were actually opened in 2019 and not 2020. Post has been corrected.

Regarding AZEO, yes, once I payoff my last card, I'll plan to keep a balance on 1 card only moving forward and keep it under the 8% threshold.

KLEXH25 · ‎07-25-2020

As people here have stated, you need to pay down those two credit cards. Ideally only one should report <9% utilization. The mortgage scores like to see $0 balances (just not all). Also, I thought they always go by the middle mortgage score only. So wouldn't that mean that the lower TU score is not a deal breaker?

jrands · ‎07-25-2020

@KLEXH25 wrote:
As people here have stated, you need to pay down those two credit cards. Ideally only one should report <9% utilization. The mortgage scores like to see $0 balances (just not all). Also, I thought they always go by the middle mortgage score only. So wouldn't that mean that the lower TU score is not a deal breaker?

Thanks for the input. That's right, good point about the middle FICO score. I guess in general, I just want to raise my scores a bit more and put up as strong a case as I can on the FICO score front since my DTI can use some work as I have school loans too. Aside from my car loan, my CC and PL are all related to medical. So all the payments I've made to them are funds diverted from paying down school debt over the last so many years *sigh*

Though I know lowering my DTI will also help in increasing my score, I think at this point there's some disproportionality between my DTI compared to my FICO scores. In general, I think my FICO scores are stronger relative to my overall DTI.

Anonymous · ‎07-26-2020

@jrands wrote:
Though I know lowering my DTI will also help in increasing my score, I think at this point there's some disproportionality between my DTI compared to my FICO scores. In general, I think my FICO scores are stronger relative to my overall DTI.

@jrands Lowering DTI has nothing to do with scoring. Fico scores do not take income into account.

Anonymous · ‎07-26-2020

@Trudy wrote:
Note that <29% is said to be the ideal UTL for an individual card, but <9% is ideal for aggregate UTL. When planning for a MTG it is advised to not app within the year. MTG scores like accounts at least 1 year old so if "within the next year" can be a year+ from now since you just opened 2 new accounts that should definitely get you where you want to be. In addition, if any points were lost from the INQ's for those 2 loans reach a year+ you will get those points back. And as you mentioned AZEO since MTG scores are also sensitive to # of accounts reporting a balance.

@Trudy actually the mortgage scores like no new accounts longer than 12 months we haven't determined exactly where that line is, but its beyond 12 months. I think an important reason for the recommendations is the underwriters don't want to see any new accounts, because the new accounts are still affecting mortgage scores at 12 months, interestingly enough. I would like to know where that line is at actually.

SouthJamaica · ‎07-26-2020

@jrands wrote:
Hello Everyone,

Trying to raise my FICO mortage scores, especially the TU score and just looking for some advice. Looking for a home with my window being anytime within the next year. Here are my current mortgage scores:
EQ5: 762
TU4: 730
EX2: 782

For TU, it seems to factor in the fact that I have store cards. Should I consider closing them to try and increase the score? Currently, my overall max available credit is $97,450 with an overall credit utilization of 20.3%. None of my store cards have balances. If I closed all three store cards, my overall max available credit would decrease to $90,250. Based on my current balance of $19,750, my overall utilization would go up to 21.9%. Based on what I've read here, it doesn't seem like I'd cross any overall credit utilization thresholds since I am currently under the 28.9% threshold and the next threshold is 8.9%. On another note, I took out two loans, one in June 2019* ~~2020~~ and the other in July 2019* ~~2020~~. Based on my score updates today, my mortgage scores did not change, so not sure if them being a year old now affects anything. Also not sure if they've been accounted for yet. (*Corrected to year 2019)

For some additional info, just got my CapOne 4 card to below the 48.9% threshold and it was just reported today. It was at 50.4% last month and is now at 48.4%. Got the following FICO 8 updates just today as well and saw some pretty dramatic increases! EDIT: My mortgage scores remained the same.
EQ8: 796-->811 (+15)
TU8: 784-->805 (+21)
EX8: 796-->807 (+11)

I also got my BoA 2 card to below the 48.9% threshold as well, but it will likely post in a couple of days. It was at about 59% last month. Lastly, based on the advice received from here (), I also paid off Store Card 3. It was at 16.7% utilization ($450/$2,700) last month. Unfortunately, it won't report until the 15th of next month, but hoping it will provide a boost.

Here is my credit profile:
Credit Cards
BoA 1: $0/$4,200 (0%)
BoA 2: $10,080/$21,500 (46.9%)
CapOne 1: $0/$500 (0%)
CapOne 2: $0/$5,250 (0%)
CapOne 3: $0/$20,000 (0%)
CapOne 4: $9,670/$20,000 (48.4%)
Chase: $0/$7,500 (0%)
Credit Union Secured: $0/$500 (0%)
US Bank 1: $0/$5,000 (0%)
US Bank 2: $0/$6,000 (0%)
Store Card 1: $0/$2,000 (0%)
Store Card 2: $0/$2,500 (0%)
Store Card 3: $0/$2,700 (0%)
Overall Utilization: $19,750/$97,450 (20.3%)

Loans
Car: $32,265/$37,640 (opened 6/2020)
Personal: $41,770/$48,900 (opened 7/2020)