FICO Score Questions and Mortgage Refi Prep

[Anonymous]

Okay, so I pulled the trigger on the 3B report and my scores are as follows:

Equifax:

FICO Score 8 - 700

FICO Score 5 - 722

Transunion:

FICO Score 8 - 724

FICO Score 4 - 726

Experian:

FICO Score 8 - 699

FICO Score - 690

My overall available credit is $54,100

I have 9 open credit card accounts and 3 with a balance totaling $19,242 on the last update on Credit Karma (I now know that I shouldn't use CK for the scores themselves)

1. Citi @ $10,277/$17,000 60%

2. Chase @ $4,525/$4,900 92%

3. Discover @ $4,068/$12,000 34%

So I guess I really just need to figure out WHICH of the FICO scores that my lender is actually going to use.. because if he uses the Mortgage scores then I'm already golden with a middle score of 722!

If I pay down my credit cards by about $4000 I can put one card from 92%-28.9% and another from 34%-28.9% which will bring my overall utilization down from 36%-somewhere in the 10-29% bracket all at once. I have read that the Mortgage score takes a hit/puts more weight on the number of accounts with balances.. so I am wondering how much of a difference this will actually make to those scores? I would assume that it would make a much bigger difference to my Score 8's?

One more follow-up question.. My dad added me as authorized user to his Discover card. How much, if at all, will this affect my score? It has a $0/$8,000 balance and the account is 12 years old. From what I understand once it reports it will give me a higher overall credit utilization, which will help bring down my total utilization and it should also raise my average age of accounts too right? My average right now is 3 years with 9 open accounts and if I did the math right this would bring my average up to like 3 years and 10/11 months. I would assume that all of this would positively impact my scores? If so, would it only make a difference to my FICO 8's? Or would it give me a boost on the mortgage scores as well?

I am hoping to refi in early October, but I wanted to see if I could boost my score some more before actually pulling the trigger. My biggest concern after seeing my 3B report is just which score is my lender actually going to use? Do you guys think that they would tell me or would I just have to take a shot in the dark by submitting to their hard inquiry?

[Trudy]

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@Anonymous wrote:

Okay, so I pulled the trigger on the 3B report and my scores are as follows:

Equifax:

FICO Score 8 - 700

FICO Score 5 - 722

Transunion:

FICO Score 8 - 724

FICO Score 4 - 726

Experian:

FICO Score 8 - 699

FICO Score - 690

My overall available credit is $54,100

I have 9 open credit card accounts and 3 with a balance totaling $19,242 on the last update on Credit Karma (I now know that I shouldn't use CK for the scores themselves)

1. Citi @ $10,277/$17,000 60%

2. Chase @ $4,525/$4,900 92%

3. Discover @ $4,068/$12,000 34%

So I guess I really just need to figure out WHICH of the FICO scores that my lender is actually going to use.. because if he uses the Mortgage scores then I'm already golden with a middle score of 722!

They use your MTG scores so yes 722  will be the score.  But 760 and above should get you the best rate.

If I pay down my credit cards by about $4000 I can put one card from 92%-28.9% and another from 34%-28.9% which will bring my overall utilization down from 36%-somewhere in the 10-29% bracket all at once. I have read that the Mortgage score takes a hit/puts more weight on the number of accounts with balances.. so I am wondering how much of a difference this will actually make to those scores? I would assume that it would make a much bigger difference to my Score 8's?

This is definitely profile specific but since I have an EX subscription it helps me track movement on my profile.  I saw a 12pt decrease when I went from 1 revolver reporting a balance (6%UTL) to 2 (both less than 8%, total UTL 3%) out of 10.  Clearly I had lower UTL than you but this is the reason people recommend AZEO when going for a MTG.  But UTL is important to MTG scores also so bringing it down to the thresholds you note should definitely help. 

One more follow-up question.. My dad added me as authorized user to his Discover card. How much, if at all, will this affect my score? It has a $0/$8,000 balance and the account is 12 years old. From what I understand once it reports it will give me a higher overall credit utilization, which will help bring down my total utilization and it should also raise my average age of accounts too right? My average right now is 3 years with 9 open accounts and if I did the math right this would bring my average up to like 3 years and 10/11 months. I would assume that all of this would positively impact my scores? If so, would it only make a difference to my FICO 8's? Or would it give me a boost on the mortgage scores as well? I can't speak to AU's and how it impacts MTG scores.

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[Anonymous]

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@Trudy wrote:

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@Anonymous wrote:

Okay, so I pulled the trigger on the 3B report and my scores are as follows:

Equifax:

FICO Score 8 - 700

FICO Score 5 - 722

Transunion:

FICO Score 8 - 724

FICO Score 4 - 726

Experian:

FICO Score 8 - 699

FICO Score - 690

My overall available credit is $54,100

I have 9 open credit card accounts and 3 with a balance totaling $19,242 on the last update on Credit Karma (I now know that I shouldn't use CK for the scores themselves)

1. Citi @ $10,277/$17,000 60%

2. Chase @ $4,525/$4,900 92%

3. Discover @ $4,068/$12,000 34%

So I guess I really just need to figure out WHICH of the FICO scores that my lender is actually going to use.. because if he uses the Mortgage scores then I'm already golden with a middle score of 722!

They use your MTG scores so yes 722  will be the score.  But 760 and above should get you the best rate.

If I pay down my credit cards by about $4000 I can put one card from 92%-28.9% and another from 34%-28.9% which will bring my overall utilization down from 36%-somewhere in the 10-29% bracket all at once. I have read that the Mortgage score takes a hit/puts more weight on the number of accounts with balances.. so I am wondering how much of a difference this will actually make to those scores? I would assume that it would make a much bigger difference to my Score 8's?

This is definitely profile specific but since I have an EX subscription it helps me track movement on my profile.  I saw a 12pt decrease when I went from 1 revolver reporting a balance (6%UTL) to 2 (both less than 8%, total UTL 3%) out of 10.  Clearly I had lower UTL than you but this is the reason people recommend AZEO when going for a MTG.  But UTL is important to MTG scores also so bringing it down to the thresholds you note should definitely help. 

One more follow-up question.. My dad added me as authorized user to his Discover card. How much, if at all, will this affect my score? It has a $0/$8,000 balance and the account is 12 years old. From what I understand once it reports it will give me a higher overall credit utilization, which will help bring down my total utilization and it should also raise my average age of accounts too right? My average right now is 3 years with 9 open accounts and if I did the math right this would bring my average up to like 3 years and 10/11 months. I would assume that all of this would positively impact my scores? If so, would it only make a difference to my FICO 8's? Or would it give me a boost on the mortgage scores as well? I can't speak to AU's and how it impacts MTG scores.

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I am planning to make a $3000 payment against my Chase card to drop it under 29%, however I have also read that the number of accounts reporting a balance has a greater effect on Mortgage scores.. so what I'm wondering is if I'm actually making a mistake by attacking the individual card's utilization and paying down the Chase card (it's 0% apr through OCT 2020) instead of maybe wiping out my Discover card that has a higher interest rate? I just made a $625 payment on it so the new balance should be about $3450/$12000 after interest is applied. I could potentially push this card down to a 0 balance and only have the 2 cards reporting instead of 3. Doing this would leave me with the Chase card up at 89.79% utililazation ($4,400/$4900) and the Citi card at around 58% (depends on how much interest gets charged on this next statement/where the balance actually ends up). 

If my lender is going to use my middle score and I am already at a 722 mid score, then I feel like maybe I should focus on the long game and get rid of my higher interest card instead.. especially if it might potentially make a bigger impact on my mortgage score. I doubt that either of these strategies would get me over 740 either way, but I'm curious what your thoughts on this are?

[Trudy]

I'd agree but think bringing all accts down to or under 28.9% is still your best game plan for now.  Particularly since you're only a month out from your app.  There are others on the forum that can quantify those changes.  But keep in mind that the 28.9% you bring those accts down to will have interest and report higher than 28.9%.  So if you can get them a little lower to acct for expected interest you should see the benefit from at or below 28.9%.