CLI vs New

[Anonymous]

Dear Abbey, (HA!)

I only have one open card, USAA with a $0 balance and a $2k limit

I just paid off a BofA card with a $1000 limit that is now closed (by them)

I am paying off a Navy Federal Credit Card $5400 out of $10,000. (also closed by them)

I got on my parents Master Card as an Authorized user and they have $2700 out of a $28k limit mever having mised a payment since 1996.

So, my revolving utilization is $8,100 / $28,000 which is 29%

When I paid the Navy federal down to 5400 from 9201 my FICO 8 score jumped 40 points.

I want to increase my Mortgage scores (FICO 5, 4, 2) which are at 548, 611, 575

Here is my question...

To increase my Mortgage scores primarily, would I be best advised to pay down the $5401 N Fed or get a new credit card with a $5k limit (FICO 8 at 625)or apply for a CLI on USAA

I do have 2 collections. (2 and 4 years old) Both paid off and closed and totalling only $997 (peanuts, but killing my score)

If there are other options please advise.

Thank you,

Brew

[Anonymous]

Paying off your existing debt is always the way to go and in this case it will help your scores quite a bit as well, as doing so should allow you to cross the 9% aggregate utilization mark... depending of course how consistent that AU account is.

[Anonymous]

The AU is very consistent. Thank you

can you explain the 9%? I heard 30% was the magic number?

what is significant about 9?

[Anonymous]

Thresholds are believed to exist at 9%, 29%, 49%, 69% and 89%.  Crossing the 9% threshold yields the greatest point gain from paying down utilization.  The next best threshold, being between 9%-29% is said to be "good" but certainly not ideal.  Being in this range isn't a bad thing, so that's probably why you've heard that it's good to be there, but you won't be maximizing your FICO scores in this range.  That comes with being below 9%. 

[Kree]

There are multiple thresholds. 9% 30% 80%   and some say another one around 50-60%

Going below each one gives points. 30% is the youre doing good threshold. 9% is the youre doing great threshold.

EDIT: Go with BBS's numbers, they are probably much more accurate.

[DollyLama]

Do as BBS suggested, or even PIF the Navy Fed if feasible, as since they have closed the account. Overall utilization is first in thresholds, then individual. So Navy is at 100% whether you have 5K or 5 dollars. 

I noticed in your siggy

3-30days, 3-60 days, 50% paid as agreed.
1 month since most recent last late payment. 

Is the 1 month since most recent the Navy reporting, as the collections should no longer being reported monthly late since they are paid off. 

How soon are you wanting to buy a house? If within the next 6mos to a year, don't be apping any new CL. 

Once the Navy is PIF, only use your USAA for letting a balance under 8.9% hit at statement cuts. 

Try in rebuilding forums to GW to death the late payments for removal, same for the paid collections. If the lates are very recent, if might be a bit harder than ones that are a few years old. 

[Anonymous]

BBS, KREE, Thank You! That helps to understand

Dolly,

My navy fed was being reported 5409 out of 10,000. Im not sure what to make of that since you said fit should be at 100%.

the recent late was on Navy Fed

I am buying soon as I am having one built. already preapproved through VA

[Kree]

I believe that a closed account counts as 100% utilization, because your credit limit is now 0. Again, others better answers.

[Anonymous]

Agreed, but it's not. lol 54%. Ill wait until the Nov 1 pull and see 

[SouthJamaica]

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@Anonymous wrote:

Dear Abbey, (HA!)

I only have one open card, USAA with a $0 balance and a $2k limit

I just paid off a BofA card with a $1000 limit that is now closed (by them)

I am paying off a Navy Federal Credit Card $5400 out of $10,000. (also closed by them)

I got on my parents Master Card as an Authorized user and they have $2700 out of a $28k limit mever having mised a payment since 1996.

So, my revolving utilization is $8,100 / $28,000 which is 29%

When I paid the Navy federal down to 5400 from 9201 my FICO 8 score jumped 40 points.

I want to increase my Mortgage scores (FICO 5, 4, 2) which are at 548, 611, 575

Here is my question...

To increase my Mortgage scores primarily, would I be best advised to pay down the $5401 N Fed or get a new credit card with a $5k limit (FICO 8 at 625)or apply for a CLI on USAA

I do have 2 collections. (2 and 4 years old) Both paid off and closed and totalling only $997 (peanuts, but killing my score)

If there are other options please advise.

Thank you,

Brew

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Getting new accounts will hurt your mortgage scores, so forget that.