Fico Score Help Please - Very detailed :)

[Anonymous]

Good morning MyFico Forum.. Looking for a little guidance to getting over into the 700's and getting my mortgage scores up to reapply in 6 months. 

Mortgage scores currently

Experian - 577   Equifax- 514 Transunion-  594 AS OF 4/4/2018

1 Collection that was recently removed from Transunion and should be removed from the others. The collection account removal isn't reflected in my current mortgage scores but it does show on the FICO 8 Score that's what caused the 24 point increase along wth lowering my balances on Personal Finances. 

Current Cards with Balances

Walmart- Closed Balance $438.00     Limit $900

Credit One- Closed Balance $779       Limit $850

Capital One – Open Balance $578     Limit $800

Discover Secured – Open $ 60 Balance Limit $200

Meijer Credit Card- Open Balance $98 Limit $450

Amazon- Open-  Balance $100              Limit $400

________________________________________________

Finger Hut - Open Balance $0 Limit $450

Capital One Open Balance $0 Limit $550

Victoria Secret Open Balance $0 Limit $400

I do have a personal loan that I'm currently paying on time balance $5,500 Payments are $89 monthly. 

Negatives

First Premiere - Charge off 2014 Balance $909 Limit $700- I just recently sent a PFD last week to First Premiere to see if they will accept that. 

I also have a discharged Chapter 7 BK from 2012. 

Two thirty day Late Payments from my Auto loan from December 2017

1-30  1-60 1-90 1-120 Late from Credit One from October 2017- They closed the account but I currently still make monthly payments with them until it's paid off.

I tried goodwill letters for the Auto Loan and Credit One and explained the hardship of me losing my job but neither of them are budging. 

Any help will be greatly appreciated !! 

Thank you  

[Anonymous]

You can get an FHA mortgage with a minimum (middle) score of 580. Here’s a site that explains it pretty well:

https://www.fha.com/fha_credit_requirements
(Note: you don’t have to get an FHA loan from them, many banks do FHA loans)

About your gap in job history, when I was a mortgage processor you could write a letter explaining the gap and that would suffice. I don’t know if that’s still the case.

With an FHA mortgage, all the collections showing up on your report will have to be paid to close the loan. I think that’s also the case with charge offs. If you can get them off all three reports, then you don’t have to pay them.

You should be good on your BK, the rule was 2 years post-BK for FHA, and I doubt that’s changed.

I’m not an expert on exactly what is the quickest way to get your score above 580, but I wonder if lowering your credit utilization will help even though you have those recent negatives.

Also, are those your mortgage FICOs?

[Thomas_Thumb]

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@Anonymous wrote:

Good morning MyFico Forum.. Looking for a little guidance to getting over into the 700's and getting my mortgage scores up to reapply in 6 months. 

Mortgage scores currently

Experian - 577   Equifax- 514 Transunion-  594 AS OF 4/4/2018

1 Collection that was recently removed from Transunion and should be removed from the others. The collection account removal isn't reflected in my current mortgage scores but it does show on the FICO 8 Score that's what caused the 24 point increase along wth lowering my balances on Personal Finances. 

Current Cards with Balances

Walmart- Closed Balance $438.00     Limit $900 - Pay this off. Closed accounts need to show $0 balance

Credit One- Closed Balance $779       Limit $850 - Pay this off. Closed accounts need to show $0 balance.

Capital One – Open Balance $578     Limit $800

Discover Secured – Open $ 60 Balance Limit $200

Meijer Credit Card- Open Balance $98 Limit $450

Amazon- Open-  Balance $100              Limit $400

________________________________________________

Finger Hut - Open Balance $0 Limit $450

Capital One Open Balance $0 Limit $550

Victoria Secret Open Balance $0 Limit $400

I do have a personal loan that I'm currently paying on time balance $5,500 Payments are $89 monthly. 

Negatives

First Premiere - Charge off 2014 Balance $909 Limit $700- I just recently sent a PFD last week to First Premiere to see if they will accept that. 

I also have a discharged Chapter 7 BK from 2012. 

Two thirty day Late Payments from my Auto loan from December 2017

1-30  1-60 1-90 1-120 Late from Credit One from October 2017- They closed the account but I currently still make monthly payments with them until it's paid off.

I tried goodwill letters for the Auto Loan and Credit One and explained the hardship of me losing my job but neither of them are budging. 

Any help will be greatly appreciated !! 

Thank you  

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Showing a positive balance on closed accounts is severly impacting your scores. These accounts are viewed as being at 100% utilization regardless of balance (Balance = effective CL if closed). A balance of $5 is the same as $500 in terms of account utilization. These balances are also killing your aggregate utilization (total of all balances/(total of CLs on open accounts only) = $2052/$4467) = 46%

In summary you have two closed accounts at 100% utilization and your aggregate utilization is 46%. Pay off the closed accounts, get your highest individual open account UT under 29% and your aggregate UT under 9%; you could pick up 30 to 50 points from that alone. 

Mortgage Ficos are sensitive to # of accounts reporting balances in addition to utilization. This is particularly true with Equifax. If possible, report balances on no more than two accounts (after you have paid off the closed accounts).

Your lates will continue to hold down your score after the balances are paid off but at least your score won't be hurt by 100% account UT and 63% Aggregate UT.

[NRB525]

TT What is your source to say closed accounts With Balances are counted as 100% utilization?  

When I joined MyFICO in late 2014, I had two closed Citi cards still carrying balances on relatively low rates which I was paying down. Citi still reported the credit limits, one had a ~$20k limit the other a ~$5k limit. Each time I tried to back into utilitarian calculations as shown on credit reports, both the open amount and utilization excluded the closed cards. 

Now, maybe there is a secret squirrel portion of the FICO scoring algorithm that addresses closed accounts with balances, but I never could figure where it was. 

[Anonymous]

Thank you so much!!! This is the info and feedback that I was looking for. I’m going to work on paying off the closed accounts this month and now getting the utilization’s down on the other cards next month. I appreciate your help with this!!

[Thomas_Thumb]

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@NRB525 wrote:

TT What is your source to say closed accounts With Balances are counted as 100% utilization?  

When I joined MyFICO in late 2014, I had two closed Citi cards still carrying balances on relatively low rates which I was paying down. Citi still reported the credit limits, one had a ~$20k limit the other a ~$5k limit. Each time I tried to back into utilitarian calculations as shown on credit reports, both the open amount and utilization excluded the closed cards. 

Now, maybe there is a secret squirrel portion of the FICO scoring algorithm that addresses closed accounts with balances, but I never could figure where it was. 

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NRB525, Closed accounts with balances are included in utilization metric calculation if a non zero balance and a CL are reported for the account. However, per the below it does appear that the reported CL is used in the calculation. (see paste below). I had thought closed accounts were essentially balance chased so CL = balance; thus the 100% utilization on the card(s).

http://www.creditnet.com/weekly-tips/closed-credit-cards-can-still-affect-utilization.php

[Anonymous]

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@Thomas_Thumb

In summary you have two closed accounts at 100% utilization and your aggregate utilization is 46%. Pay off the closed accounts, get your highest individual open account UT under 29% and your aggregate UT under 9%; you could pick up 30 to 50 points from that alone.

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I'd estimate a bit higher than TT did with this and actually suggest you'd gain at least 50 points and up to 60-65.  Regardless, the point here is that paying down that utilization would be huge for any of the OPs FICO scores.  It's fortunate that his limits are all pretty small, as that magnifies the impact of his paydown relative to someone with larger limits.  I would suggest focusing on the utilization first, since that's a lot easier to tackle with a gauranteed end result as opposed to battling 3-4 dirty accounts.  It's also worth noting that even if one is able to clean up 1 or 2 dirty accounts, so long as at least one remains the score gain from cleaning up a few could be little to nothing.

[Anonymous]

Thank you BrutalBodyShots!!

I'm going to tackle paying off the Walmart and Credit one this month and next month work out paying down the capital one to under 29%. This is great information from you and TT because i didn't know that closed accounts with balances could still effect my utilization. I appreciate all the great feedback and help with this. Now I have a plan of action and I know exactly what I need to tackle and yes I'm glad the limits are smaller because I can pay them back faster  

[Anonymous]

Sure thing.  Once you get your revolvers paid off, do your best to adopt a PIF (pay in full) philosophy where you only buy things on your credit cards that you could pay for in cash today if you wanted to, then simply use that cash to pay off your credit cards in full every month. 

Also once your utilization is in check, I'd suggest hitting the rebuilding forum, as there you can find some great information on cleaning up your negative accounts.  You'll want to start with your most recent negative items and/or the most severe ones.  By doing so you'll see the quickest improvement.

[CreditBob]

On your current cards that are in closed status can you pay them off in full? And on the open credit cards bring the utilization percentage down to below thirty percent or even closer to below ten. The major factors that are affecting your score is the following: 

1.   Having high utilization balances

2.   balances on multiple revolving accounts (meaning two or more trade lines)

If you can at least then payoff the three credit cards with the smallest balances-Discover, Amazon, & Meijer

On a last note, the most optimal scenario would be to payoff all credit cards except leave a very small balance on one revolving account. Do not close down any credit cards. Bring down your loan balance to 50% of the original loan balance.