Help further increasing score before mortgage application.

[Anonymous]

Hey everyone, 

First of all I want to thank everyone in advance for any time spent on this or any help offered.

For the last year or so I've been doing everything I can to improve my credit in anticipation of my wife and I applying for a loan. I was around the low 700s, and I had a small mishap when some hospital bills were mistakenly sent to collections and this dropped me down to the mid 600s. I've since gotten that taken care of, and I've been working on crossing the t's and dotting the i's by making sure everything continues to get paid on time and getting my utilization under 30% and so on.

About a month ago my Equifax hit a high of a 728 vantage score according to credit karma, while transunion showed 715. Before going further, I just want to point out that I completely understand that credit karma and vantage score is nothing to base big decisions on, but I do like using it as a tool to monitor as much as I can and ideally get a high level overview of where my credit is at.

Anyway so on that note, I had quite a shock as I saw them both recently drop after what I expected would be big positive changes. In the first week of April I was able to get the medical bills that shouldn't have been sent to collections taken care of, they're all paid in full and that's been reported to the bureaus, and I can confirm that all 4 of them no longer show on my reports. In addition to getting those removed, I paid off a smaller loan I had, as it eliminated $100 of revolving debt and as it was only 3 years old it was negatively impacting the average age of my credit. I see that my average credit age has been upgraded to the next tier and is above 5 years now, so I expected that to be a positive as well. I've even checked to make sure it wasn't the only installment loan on my credit as I know having a mix of cards and installments is supposed to be good, so I'm not sure the reason for the drop.

As of now, after paying off that loan, getting my average credit age above 5 years, and getting the 4 derogatory marks removed from my credit, I still haven't seen the scores go back up to the range it was in early April or really change much. Transunion is showing a 708 and Equifax is showing a 707 in credit karma. Again I know that credit karma and vantage score shouldn't be my judgement, but I am curious and somewhat dumbfounded about why they haven't gone up further or changed after the things I took care of and changed for the better. It seems as of now at least I would have been better off not paying off the loan, and the effort spent getting the collections corrected was all for nothing.

So I'm curious about what it is I can or should do next, I can throw more money at revolving debt and aim for getting everything under 30% individually or even 10% but that's money that is then ultimately not going toward a down payment on a house. I can also try getting a new installment loan or something but then that's a hard inquiry showing on my report and again drops my score. Not to mention I know mortgage underwriters tend to look at everything with a fine toothed comb and I don't want to have them think I'm just doing this to temporarily bump my score up or wonder about why I took out a new loan recently.

Any help or ideas would be greatly appreciated. I can also drop some money and buy updated current copies of my Fico scores to add to the post if necessary and if that'd be helpful, but I was hoping that in general somebody would have a couple ideas or things to consider or do quickly, that will help get the scores up and not stand out as a red flag to a mortgage underwriter.

Thanks! 

[dragontears]

Don't open a new loan. It will not help your mortgage scores. 

I also use credit karma for a lot of monitoring but if you are serious about getting a mortgage soon it is worth the money to find out what your mortgage scores are, then youcan formulate a plan to increase them, if needed. Mortgage scores can be completely different than Vantage or FICO8, for some people the difference can be more than 100 points. 

[SouthJamaica]

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@Anonymous wrote:

Hey everyone, 

First of all I want to thank everyone in advance for any time spent on this or any help offered.

For the last year or so I've been doing everything I can to improve my credit in anticipation of my wife and I applying for a loan. I was around the low 700s, and I had a small mishap when some hospital bills were mistakenly sent to collections and this dropped me down to the mid 600s. I've since gotten that taken care of, and I've been working on crossing the t's and dotting the i's by making sure everything continues to get paid on time and getting my utilization under 30% and so on.

About a month ago my Equifax hit a high of a 728 vantage score according to credit karma, while transunion showed 715. Before going further, I just want to point out that I completely understand that credit karma and vantage score is nothing to base big decisions on, but I do like using it as a tool to monitor as much as I can and ideally get a high level overview of where my credit is at.

Anyway so on that note, I had quite a shock as I saw them both recently drop after what I expected would be big positive changes. In the first week of April I was able to get the medical bills that shouldn't have been sent to collections taken care of, they're all paid in full and that's been reported to the bureaus, and I can confirm that all 4 of them no longer show on my reports. In addition to getting those removed, I paid off a smaller loan I had, as it eliminated $100 of revolving debt and as it was only 3 years old it was negatively impacting the average age of my credit. I see that my average credit age has been upgraded to the next tier and is above 5 years now, so I expected that to be a positive as well. I've even checked to make sure it wasn't the only installment loan on my credit as I know having a mix of cards and installments is supposed to be good, so I'm not sure the reason for the drop.

As of now, after paying off that loan, getting my average credit age above 5 years, and getting the 4 derogatory marks removed from my credit, I still haven't seen the scores go back up to the range it was in early April or really change much. Transunion is showing a 708 and Equifax is showing a 707 in credit karma. Again I know that credit karma and vantage score shouldn't be my judgement, but I am curious and somewhat dumbfounded about why they haven't gone up further or changed after the things I took care of and changed for the better. It seems as of now at least I would have been better off not paying off the loan, and the effort spent getting the collections corrected was all for nothing.

So I'm curious about what it is I can or should do next, I can throw more money at revolving debt and aim for getting everything under 30% individually or even 10% but that's money that is then ultimately not going toward a down payment on a house. I can also try getting a new installment loan or something but then that's a hard inquiry showing on my report and again drops my score. Not to mention I know mortgage underwriters tend to look at everything with a fine toothed comb and I don't want to have them think I'm just doing this to temporarily bump my score up or wonder about why I took out a new loan recently.

Any help or ideas would be greatly appreciated. I can also drop some money and buy updated current copies of my Fico scores to add to the post if necessary and if that'd be helpful, but I was hoping that in general somebody would have a couple ideas or things to consider or do quickly, that will help get the scores up and not stand out as a red flag to a mortgage underwriter.

Thanks! 

---

The Credit Karma scores are meaningless.  If you care about your scores, yes, 'drop some money' and get your FICO scores.

[nwa479]

I'm working on the same thing trying to improve mortgage scores.  Here's a few quick thoughts

1) You said you paid 100 of revolving debt.  With Fico if you've paid all revolving debt you may lose points on fico 8 and mortgage scores for all zeros.   Need to have at least one card reporting a small balance.  Look up posts on AZEO method

2) You said the collections are paid and not showing on your report.  On Karma they will not show if paid but on Fico they will still show as a negative when paid.  

3) Age of accounts.  Closing a credit line will remove it from Karma's age of accounts but reports for ten years on Fico even if closed. 

There are many differences with Karma scores and to show you a real example.  
My Karma Equifax score is 807. Fico 8 is 722.  Mortgage score is 660.  
Im getting hit on mortgage due to a new account 8 months old, a paid collection 10 months old, and recent inquiries

Mortgage scores are sensitive to new activity.  

I got a set of all my Fico scores using a 30 day promo on extracredit.com. I canceled before the 30 days to avoid a 25 dollar charge. 

Now to get serious about watching my Fico scores I paid the 40 a month for the 3B Fico report monthly.  I also watch experian on a their free sight.  

I use wallethub and karma just to check activity but I ignore the scores

My goal is to get my middle mortgage score from 660 to 680.  I just achieved AZEO a few days ago and will see on the 17th if my scores went up

Hope this info helps.  

[Anonymous]

@Anonymous you really need to go by Fico scores.

Vantage scores disreaged closed accounts in calculations. They like to really only score open accounts.

There are also a terrible way to see where your scores stand. I have seen a 582 Fico have 700+ Vantage score and 800 Fico have Vantage scores in the 600s. Everything else of course in-between, but they vary wildly to Fico scores and are quite volatile to any changes.

Try at least EX to get your Fico scores (including EX mortgage score) to see where you stand at least with them. That would be a mych better gauge to see where your scores stand.

Good luck!

[Anonymous]

As others have mentioned, if you are wanting to be serious about improving your credit you need to completely disregard any VantageScores (what credit karma provides). Those scores are not a good method of gauging what your actual scores are. Many have already illustrated the gaps between their VantageScore and their actual FICO scores. When I was rebuilding my VantageScore was in the 500 range, while my actual FICO never dropped below 600. Currently CK shows my TU at 696, my free update from my Barclays card shows myTU FICO to be 766. 

Additionally, mortgages do not often look at FICO 8 scores, they consider EX2, EQ5 and TU4. So those are the scores you need to focus on. Those scores do not like new accounts and do not like having multiple accounts post balances, even if they are low balances.

Your best strategy currently is to pull a 3B credit report and scores so you can see where you actually stand. Then we can give you better input on what changes you should make to get your scores to increase. But currently we, and you, have no idea what your actual FICO scores are, so we don't know what you primarily need to focus on. You can certainly use Credit Karma to monitor changes to your report, as many of us here do, but it is not helpful in any way for predicting or monitoring your score.