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Helping a Client - Veteran Client Needs 3 Points for Loan Approval!

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credit8502020
Established Contributor

Helping a Client - Veteran Client Needs 3 Points for Loan Approval!

Hi All! I have a Veteran client that needs 3 points (640 score) to get approved for a program to help buy his first home! 

 

Here is a quick summary of his accounts: 

  1. Capital One - $500 - Opened 2/2020
  2. Credit One Card - $300 - Opened 6/2020
  3. Auto Loan - April 2018

Negative Accounts

  1. Charge Off - Wells Fargo Auto Charge Off - (Trying to Negotiate Pay for Delete)
  2. Paid Collection
  3. Paid Collection with 1 Late (Trying to get removed)


Questions

1. Right now, he has balances around 2% for both cards. Should he have 1-2% on Capital One and $0 on Credit One card to do AZEO?

2. Since he is already in a dirty score card, while working to get that CO and the paid collections removed, how long and how heavy of a hit do you think he'll have for opening a new secured credit card? I know he'll gain from having 3 cards but not sure if it will be more beneficial when compared to what he'll lose from adding a new account. I'm not as concerned about the inquiry because he may decide to get a card that will not require a credit check.
Of course a much higher score is the goal, but because of circumstances, essentially he is trying to get a 640 to qualify for a program to buy his home.
By the way, I asked the lender to do the "What If Simulator" and of course the suggestion was to settle with the CO and get it deleted. However, that may take some time as they are not wanting to settle. I'm looking for other shorter term alternatives in the meantime. Also, the lender is not worried about the charge off. I've seen it discussed frequently on the forums, but charge offs are definitely not deal breakers for getting home loans for many. There are other factors that easily allow them to still qualify even with charge offs on their accounts.

 

Here are the details from the mortgage report: 

EQUIFAX/FICO CLASSIC V5
SCORE: 646
00039 - SERIOUS DELINQUENCY
00018 - NUMBER OF ACCOUNTS WITH DELINQUENCY
00014 - LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED
00013 - TIME SINCE DELINQUENCY IS TOO RECENT OR UNKNOWN

 

TRANSUNION/FICO CLASSIC (04)
SCORE: 637
038 - SERIOUS DELINQUENCY, AND PUBLIC RECORD OR COLLECTION FILED
018 - NUMBER OF ACCOUNTS WITH DELINQUENCY
021 - AMOUNT PAST DUE ON ACCOUNTS
013 - TIME SINCE DELINQUENCY IS TOO RECENT OR UNKNOWN
FA - INQUIRIES IMPACTED THE CREDIT SCORE

 

EXPERIAN/FAIR, ISAAC (VER. 2)
SCORE: 636
38 - SERIOUS DELINQUENCY AND PUBLIC RECORD OR COLLECTION FILED
18 - NUMBER OF ACCOUNTS WITH DELINQUENCY
14 - LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED
21 - AMOUNT PAST DUE ON ACCOUNTS
08 - TOO MANY INQUIRIES LAST 12 MONTHS

 

Inquiries

2 - EXP

1 - TU

1 - TU

 

Thank you for your feedback! 

Message 1 of 45
44 REPLIES 44
SouthJamaica
Mega Contributor

Re: Helping a Client - Veteran Client Needs 3 Points for Program Approval!


@credit8502020 wrote:

Hi All! I have a Veteran client that needs 3 points (640 score) to get approved for a program to help buy his first home! 

 

Here is a quick summary of his accounts: 

  1. Capital One - $500 - Opened 2/2020
  2. Credit One Card - $300 - Opened 6/2020
  3. Auto Loan - April 2018

Negative Accounts

  1. Charge Off - Wells Fargo Auto Charge Off - (Trying to Negotiate Pay for Delete)
  2. Paid Collection
  3. Paid Collection with 1 Late (Trying to get removed)


Questions

1. Right now, he has balances around 2% for both cards. Should he have 1-2% on Capital One and $0 on Credit One card to do AZEO?

 

Yes. Should report small balance on Capital One and then pay it off each month. Let Credit One report zero. If there's a monthly fee important to prepay so there's a credit balance.

 

2. Since he is already in a dirty score card, while working to get that CO and the paid collections removed, how long and how heavy of a hit do you think he'll have for opening a new secured credit card? I know he'll gain from having 3 cards but not sure if it will be more beneficial when compared to what he'll lose from adding a new account. I'm not as concerned about the inquiry because he may decide to get a card that will not require a credit check.

 

NO APPLICATIONS FOR ANYTHING UNTIL AFTER HE CLOSES.


Of course a much higher score is the goal, but because of circumstances, essentially he is trying to get a 640 to qualify for a program to buy his home.
By the way, I asked the lender to do the "What If Simulator" and of course the suggestion was to settle with the CO and get it deleted. However, that may take some time as they are not wanting to settle. I'm looking for other shorter term alternatives in the meantime. Also, the lender is not worried about the charge off. I've seen it discussed frequently on the forums, but charge offs are definitely not deal breakers for getting home loans for many. There are other factors that easily allow them to still qualify even with charge offs on their accounts.

 

Here are the details from the mortgage report: 

EQUIFAX/FICO CLASSIC V5
SCORE: 646
00039 - SERIOUS DELINQUENCY
00018 - NUMBER OF ACCOUNTS WITH DELINQUENCY
00014 - LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED
00013 - TIME SINCE DELINQUENCY IS TOO RECENT OR UNKNOWN

 

TRANSUNION/FICO CLASSIC (04)
SCORE: 637
038 - SERIOUS DELINQUENCY, AND PUBLIC RECORD OR COLLECTION FILED
018 - NUMBER OF ACCOUNTS WITH DELINQUENCY
021 - AMOUNT PAST DUE ON ACCOUNTS
013 - TIME SINCE DELINQUENCY IS TOO RECENT OR UNKNOWN
FA - INQUIRIES IMPACTED THE CREDIT SCORE

 

EXPERIAN/FAIR, ISAAC (VER. 2)
SCORE: 636
38 - SERIOUS DELINQUENCY AND PUBLIC RECORD OR COLLECTION FILED
18 - NUMBER OF ACCOUNTS WITH DELINQUENCY
14 - LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED
21 - AMOUNT PAST DUE ON ACCOUNTS
08 - TOO MANY INQUIRIES LAST 12 MONTHS

 

Inquiries

2 - EXP

1 - TU

1 - TU

 

Thanks for your feedback! 


 


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 2 of 45
credit8502020
Established Contributor

Re: Helping a Client - Veteran Client Needs 3 Points for Program Approval!


@SouthJamaica wrote:

@credit8502020 wrote:

Hi All! I have a Veteran client that needs 3 points (640 score) to get approved for a program to help buy his first home! 

 

Here is a quick summary of his accounts: 

  1. Capital One - $500 - Opened 2/2020
  2. Credit One Card - $300 - Opened 6/2020
  3. Auto Loan - April 2018

Negative Accounts

  1. Charge Off - Wells Fargo Auto Charge Off - (Trying to Negotiate Pay for Delete)
  2. Paid Collection
  3. Paid Collection with 1 Late (Trying to get removed)


Questions

1. Right now, he has balances around 2% for both cards. Should he have 1-2% on Capital One and $0 on Credit One card to do AZEO?

 

Yes. Should report small balance on Capital One and then pay it off each month. Let Credit One report zero. If there's a monthly fee important to prepay so there's a credit balance.

 

2. Since he is already in a dirty score card, while working to get that CO and the paid collections removed, how long and how heavy of a hit do you think he'll have for opening a new secured credit card? I know he'll gain from having 3 cards but not sure if it will be more beneficial when compared to what he'll lose from adding a new account. I'm not as concerned about the inquiry because he may decide to get a card that will not require a credit check.

 

NO APPLICATIONS FOR ANYTHING UNTIL AFTER HE CLOSES.


Of course a much higher score is the goal, but because of circumstances, essentially he is trying to get a 640 to qualify for a program to buy his home.
By the way, I asked the lender to do the "What If Simulator" and of course the suggestion was to settle with the CO and get it deleted. However, that may take some time as they are not wanting to settle. I'm looking for other shorter term alternatives in the meantime. Also, the lender is not worried about the charge off. I've seen it discussed frequently on the forums, but charge offs are definitely not deal breakers for getting home loans for many. There are other factors that easily allow them to still qualify even with charge offs on their accounts.

 

Here are the details from the mortgage report: 

EQUIFAX/FICO CLASSIC V5
SCORE: 646
00039 - SERIOUS DELINQUENCY
00018 - NUMBER OF ACCOUNTS WITH DELINQUENCY
00014 - LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED
00013 - TIME SINCE DELINQUENCY IS TOO RECENT OR UNKNOWN

 

TRANSUNION/FICO CLASSIC (04)
SCORE: 637
038 - SERIOUS DELINQUENCY, AND PUBLIC RECORD OR COLLECTION FILED
018 - NUMBER OF ACCOUNTS WITH DELINQUENCY
021 - AMOUNT PAST DUE ON ACCOUNTS
013 - TIME SINCE DELINQUENCY IS TOO RECENT OR UNKNOWN
FA - INQUIRIES IMPACTED THE CREDIT SCORE

 

EXPERIAN/FAIR, ISAAC (VER. 2)
SCORE: 636
38 - SERIOUS DELINQUENCY AND PUBLIC RECORD OR COLLECTION FILED
18 - NUMBER OF ACCOUNTS WITH DELINQUENCY
14 - LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED
21 - AMOUNT PAST DUE ON ACCOUNTS
08 - TOO MANY INQUIRIES LAST 12 MONTHS

 

Inquiries

2 - EXP

1 - TU

1 - TU

 

Thanks for your feedback! 


 


@SouthJamaica Thank you for your feedback. Hopefully, he'll get those 3 points by doing AZEO. Regarding your comment above about a monthly fee, are you suggesting that there is a monthly fee with Credit One? 

Message 3 of 45
SouthJamaica
Mega Contributor

Re: Helping a Client - Veteran Client Needs 3 Points for Program Approval!


@credit8502020 wrote:

@SouthJamaica wrote:

@credit8502020 wrote:

Hi All! I have a Veteran client that needs 3 points (640 score) to get approved for a program to help buy his first home! 

 

Here is a quick summary of his accounts: 

  1. Capital One - $500 - Opened 2/2020
  2. Credit One Card - $300 - Opened 6/2020
  3. Auto Loan - April 2018

Negative Accounts

  1. Charge Off - Wells Fargo Auto Charge Off - (Trying to Negotiate Pay for Delete)
  2. Paid Collection
  3. Paid Collection with 1 Late (Trying to get removed)


Questions

1. Right now, he has balances around 2% for both cards. Should he have 1-2% on Capital One and $0 on Credit One card to do AZEO?

 

Yes. Should report small balance on Capital One and then pay it off each month. Let Credit One report zero. If there's a monthly fee important to prepay so there's a credit balance.

 

2. Since he is already in a dirty score card, while working to get that CO and the paid collections removed, how long and how heavy of a hit do you think he'll have for opening a new secured credit card? I know he'll gain from having 3 cards but not sure if it will be more beneficial when compared to what he'll lose from adding a new account. I'm not as concerned about the inquiry because he may decide to get a card that will not require a credit check.

 

NO APPLICATIONS FOR ANYTHING UNTIL AFTER HE CLOSES.


Of course a much higher score is the goal, but because of circumstances, essentially he is trying to get a 640 to qualify for a program to buy his home.
By the way, I asked the lender to do the "What If Simulator" and of course the suggestion was to settle with the CO and get it deleted. However, that may take some time as they are not wanting to settle. I'm looking for other shorter term alternatives in the meantime. Also, the lender is not worried about the charge off. I've seen it discussed frequently on the forums, but charge offs are definitely not deal breakers for getting home loans for many. There are other factors that easily allow them to still qualify even with charge offs on their accounts.

 

Here are the details from the mortgage report: 

EQUIFAX/FICO CLASSIC V5
SCORE: 646
00039 - SERIOUS DELINQUENCY
00018 - NUMBER OF ACCOUNTS WITH DELINQUENCY
00014 - LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED
00013 - TIME SINCE DELINQUENCY IS TOO RECENT OR UNKNOWN

 

TRANSUNION/FICO CLASSIC (04)
SCORE: 637
038 - SERIOUS DELINQUENCY, AND PUBLIC RECORD OR COLLECTION FILED
018 - NUMBER OF ACCOUNTS WITH DELINQUENCY
021 - AMOUNT PAST DUE ON ACCOUNTS
013 - TIME SINCE DELINQUENCY IS TOO RECENT OR UNKNOWN
FA - INQUIRIES IMPACTED THE CREDIT SCORE

 

EXPERIAN/FAIR, ISAAC (VER. 2)
SCORE: 636
38 - SERIOUS DELINQUENCY AND PUBLIC RECORD OR COLLECTION FILED
18 - NUMBER OF ACCOUNTS WITH DELINQUENCY
14 - LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED
21 - AMOUNT PAST DUE ON ACCOUNTS
08 - TOO MANY INQUIRIES LAST 12 MONTHS

 

Inquiries

2 - EXP

1 - TU

1 - TU

 

Thanks for your feedback! 


 


@SouthJamaica Thank you for your feedback. Hopefully, he'll get those 3 points by doing AZEO. Regarding your comment above about a monthly fee, are you suggesting that there is a monthly fee with Credit One? 


Yes, some Credit One accounts charge a monthly fee.


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 4 of 45
credit8502020
Established Contributor

Re: Helping a Client - Veteran Client Needs 3 Points for Program Approval!


@SouthJamaica wrote:

@credit8502020 wrote:

@SouthJamaica wrote:

@credit8502020 wrote:

Hi All! I have a Veteran client that needs 3 points (640 score) to get approved for a program to help buy his first home! 

 

Here is a quick summary of his accounts: 

  1. Capital One - $500 - Opened 2/2020
  2. Credit One Card - $300 - Opened 6/2020
  3. Auto Loan - April 2018

Negative Accounts

  1. Charge Off - Wells Fargo Auto Charge Off - (Trying to Negotiate Pay for Delete)
  2. Paid Collection
  3. Paid Collection with 1 Late (Trying to get removed)


Questions

1. Right now, he has balances around 2% for both cards. Should he have 1-2% on Capital One and $0 on Credit One card to do AZEO?

 

Yes. Should report small balance on Capital One and then pay it off each month. Let Credit One report zero. If there's a monthly fee important to prepay so there's a credit balance.

 

2. Since he is already in a dirty score card, while working to get that CO and the paid collections removed, how long and how heavy of a hit do you think he'll have for opening a new secured credit card? I know he'll gain from having 3 cards but not sure if it will be more beneficial when compared to what he'll lose from adding a new account. I'm not as concerned about the inquiry because he may decide to get a card that will not require a credit check.

 

NO APPLICATIONS FOR ANYTHING UNTIL AFTER HE CLOSES.


Of course a much higher score is the goal, but because of circumstances, essentially he is trying to get a 640 to qualify for a program to buy his home.
By the way, I asked the lender to do the "What If Simulator" and of course the suggestion was to settle with the CO and get it deleted. However, that may take some time as they are not wanting to settle. I'm looking for other shorter term alternatives in the meantime. Also, the lender is not worried about the charge off. I've seen it discussed frequently on the forums, but charge offs are definitely not deal breakers for getting home loans for many. There are other factors that easily allow them to still qualify even with charge offs on their accounts.

 

Here are the details from the mortgage report: 

EQUIFAX/FICO CLASSIC V5
SCORE: 646
00039 - SERIOUS DELINQUENCY
00018 - NUMBER OF ACCOUNTS WITH DELINQUENCY
00014 - LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED
00013 - TIME SINCE DELINQUENCY IS TOO RECENT OR UNKNOWN

 

TRANSUNION/FICO CLASSIC (04)
SCORE: 637
038 - SERIOUS DELINQUENCY, AND PUBLIC RECORD OR COLLECTION FILED
018 - NUMBER OF ACCOUNTS WITH DELINQUENCY
021 - AMOUNT PAST DUE ON ACCOUNTS
013 - TIME SINCE DELINQUENCY IS TOO RECENT OR UNKNOWN
FA - INQUIRIES IMPACTED THE CREDIT SCORE

 

EXPERIAN/FAIR, ISAAC (VER. 2)
SCORE: 636
38 - SERIOUS DELINQUENCY AND PUBLIC RECORD OR COLLECTION FILED
18 - NUMBER OF ACCOUNTS WITH DELINQUENCY
14 - LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED
21 - AMOUNT PAST DUE ON ACCOUNTS
08 - TOO MANY INQUIRIES LAST 12 MONTHS

 

Inquiries

2 - EXP

1 - TU

1 - TU

 

Thanks for your feedback! 


 


@SouthJamaica Thank you for your feedback. Hopefully, he'll get those 3 points by doing AZEO. Regarding your comment above about a monthly fee, are you suggesting that there is a monthly fee with Credit One? 


Yes, some Credit One accounts charge a monthly fee.


@SouthJamaica Got it! Thank you for mentioning that. I will definitely tell him so he can be sure to find out what it is and prepay it.

Message 5 of 45
Anonymous
Not applicable

Re: Helping a Client - Veteran Client Needs 3 Points for Loan Approval!


@credit8502020 wrote:

Hi All! I have a Veteran client that needs 3 points (640 score) to get approved for a program to help buy his first home! 

 

Here is a quick summary of his accounts: 

  1. Capital One - $500 - Opened 2/2020
  2. Credit One Card - $300 - Opened 6/2020
  3. Auto Loan - April 2018

Negative Accounts

  1. Charge Off - Wells Fargo Auto Charge Off - (Trying to Negotiate Pay for Delete)
  2. Paid Collection
  3. Paid Collection with 1 Late (Trying to get removed)


Questions

1. Right now, he has balances around 2% for both cards. Should he have 1-2% on Capital One and $0 on Credit One card to do AZEO?

2. Since he is already in a dirty score card, while working to get that CO and the paid collections removed, how long and how heavy of a hit do you think he'll have for opening a new secured credit card? I know he'll gain from having 3 cards but not sure if it will be more beneficial when compared to what he'll lose from adding a new account. I'm not as concerned about the inquiry because he may decide to get a card that will not require a credit check.
Of course a much higher score is the goal, but because of circumstances, essentially he is trying to get a 640 to qualify for a program to buy his home.
By the way, I asked the lender to do the "What If Simulator" and of course the suggestion was to settle with the CO and get it deleted. However, that may take some time as they are not wanting to settle. I'm looking for other shorter term alternatives in the meantime. Also, the lender is not worried about the charge off. I've seen it discussed frequently on the forums, but charge offs are definitely not deal breakers for getting home loans for many. There are other factors that easily allow them to still qualify even with charge offs on their accounts.

 

Here are the details from the mortgage report: 

EQUIFAX/FICO CLASSIC V5
SCORE: 646
00039 - SERIOUS DELINQUENCY
00018 - NUMBER OF ACCOUNTS WITH DELINQUENCY
00014 - LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED
00013 - TIME SINCE DELINQUENCY IS TOO RECENT OR UNKNOWN

 

TRANSUNION/FICO CLASSIC (04)
SCORE: 637
038 - SERIOUS DELINQUENCY, AND PUBLIC RECORD OR COLLECTION FILED
018 - NUMBER OF ACCOUNTS WITH DELINQUENCY
021 - AMOUNT PAST DUE ON ACCOUNTS
013 - TIME SINCE DELINQUENCY IS TOO RECENT OR UNKNOWN
FA - INQUIRIES IMPACTED THE CREDIT SCORE

 

EXPERIAN/FAIR, ISAAC (VER. 2)
SCORE: 636
38 - SERIOUS DELINQUENCY AND PUBLIC RECORD OR COLLECTION FILED
18 - NUMBER OF ACCOUNTS WITH DELINQUENCY
14 - LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED
21 - AMOUNT PAST DUE ON ACCOUNTS
08 - TOO MANY INQUIRIES LAST 12 MONTHS

 

Inquiries

2 - EXP

1 - TU

1 - TU

 

Thank you for your feedback! 


@credit8502020 I don't know how much AZEO is going to help him being in a dirty card, but let's hope. (You always want them to only have a balance on one card.) Yeah getting revolvers would probably provide some points and since he's in a dirty card, there's no new account penalty. The aging won't matter unless he's right on the threshold and it wouldn't be much of a loss anyway. 

 

Question is, will lender will approve him with another new account? other than that, you need 1. time away from the derogs without updates, or 2. paid+time or delete on COs, 3. and/or PDF all CAs. 

Message 6 of 45
credit8502020
Established Contributor

Re: Helping a Client - Veteran Client Needs 3 Points for Loan Approval!


@Anonymous wrote:

@credit8502020 wrote:

Hi All! I have a Veteran client that needs 3 points (640 score) to get approved for a program to help buy his first home! 

 

Here is a quick summary of his accounts: 

  1. Capital One - $500 - Opened 2/2020
  2. Credit One Card - $300 - Opened 6/2020
  3. Auto Loan - April 2018

Negative Accounts

  1. Charge Off - Wells Fargo Auto Charge Off - (Trying to Negotiate Pay for Delete)
  2. Paid Collection
  3. Paid Collection with 1 Late (Trying to get removed)


Questions

1. Right now, he has balances around 2% for both cards. Should he have 1-2% on Capital One and $0 on Credit One card to do AZEO?

2. Since he is already in a dirty score card, while working to get that CO and the paid collections removed, how long and how heavy of a hit do you think he'll have for opening a new secured credit card? I know he'll gain from having 3 cards but not sure if it will be more beneficial when compared to what he'll lose from adding a new account. I'm not as concerned about the inquiry because he may decide to get a card that will not require a credit check.
Of course a much higher score is the goal, but because of circumstances, essentially he is trying to get a 640 to qualify for a program to buy his home.
By the way, I asked the lender to do the "What If Simulator" and of course the suggestion was to settle with the CO and get it deleted. However, that may take some time as they are not wanting to settle. I'm looking for other shorter term alternatives in the meantime. Also, the lender is not worried about the charge off. I've seen it discussed frequently on the forums, but charge offs are definitely not deal breakers for getting home loans for many. There are other factors that easily allow them to still qualify even with charge offs on their accounts.

 

Here are the details from the mortgage report: 

EQUIFAX/FICO CLASSIC V5
SCORE: 646
00039 - SERIOUS DELINQUENCY
00018 - NUMBER OF ACCOUNTS WITH DELINQUENCY
00014 - LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED
00013 - TIME SINCE DELINQUENCY IS TOO RECENT OR UNKNOWN

 

TRANSUNION/FICO CLASSIC (04)
SCORE: 637
038 - SERIOUS DELINQUENCY, AND PUBLIC RECORD OR COLLECTION FILED
018 - NUMBER OF ACCOUNTS WITH DELINQUENCY
021 - AMOUNT PAST DUE ON ACCOUNTS
013 - TIME SINCE DELINQUENCY IS TOO RECENT OR UNKNOWN
FA - INQUIRIES IMPACTED THE CREDIT SCORE

 

EXPERIAN/FAIR, ISAAC (VER. 2)
SCORE: 636
38 - SERIOUS DELINQUENCY AND PUBLIC RECORD OR COLLECTION FILED
18 - NUMBER OF ACCOUNTS WITH DELINQUENCY
14 - LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED
21 - AMOUNT PAST DUE ON ACCOUNTS
08 - TOO MANY INQUIRIES LAST 12 MONTHS

 

Inquiries

2 - EXP

1 - TU

1 - TU

 

Thank you for your feedback! 


@credit8502020 I don't know how much AZEO is going to help him being in a dirty card, but let's hope. (You always want them to only have a balance on one card.) Yeah getting revolvers would probably provide some points and since he's in a dirty card, there's no new account penalty. The aging won't matter unless he's right on the threshold and it wouldn't be much of a loss anyway. 

 

Question is, will lender will approve him with another new account? other than that, you need 1. time away from the derogs without updates, or 2. paid+time or delete on COs, 3. and/or PDF all CAs. 


@Anonymous Yes. I'm hoping it will help. We'll see. Ok. Regarding the new revolver. Yes, one of my lenders has no problem with the new account. They only want the score. I'm waiting to hear back from another lender regarding the new account, but I don't think they will have an issue either. 

Message 7 of 45
SouthJamaica
Mega Contributor

Re: Helping a Client - Veteran Client Needs 3 Points for Loan Approval!


@credit8502020 wrote:

@Anonymous wrote:

@credit8502020 wrote:

Hi All! I have a Veteran client that needs 3 points (640 score) to get approved for a program to help buy his first home! 

 

Here is a quick summary of his accounts: 

  1. Capital One - $500 - Opened 2/2020
  2. Credit One Card - $300 - Opened 6/2020
  3. Auto Loan - April 2018

Negative Accounts

  1. Charge Off - Wells Fargo Auto Charge Off - (Trying to Negotiate Pay for Delete)
  2. Paid Collection
  3. Paid Collection with 1 Late (Trying to get removed)


Questions

1. Right now, he has balances around 2% for both cards. Should he have 1-2% on Capital One and $0 on Credit One card to do AZEO?

2. Since he is already in a dirty score card, while working to get that CO and the paid collections removed, how long and how heavy of a hit do you think he'll have for opening a new secured credit card? I know he'll gain from having 3 cards but not sure if it will be more beneficial when compared to what he'll lose from adding a new account. I'm not as concerned about the inquiry because he may decide to get a card that will not require a credit check.
Of course a much higher score is the goal, but because of circumstances, essentially he is trying to get a 640 to qualify for a program to buy his home.
By the way, I asked the lender to do the "What If Simulator" and of course the suggestion was to settle with the CO and get it deleted. However, that may take some time as they are not wanting to settle. I'm looking for other shorter term alternatives in the meantime. Also, the lender is not worried about the charge off. I've seen it discussed frequently on the forums, but charge offs are definitely not deal breakers for getting home loans for many. There are other factors that easily allow them to still qualify even with charge offs on their accounts.

 

Here are the details from the mortgage report: 

EQUIFAX/FICO CLASSIC V5
SCORE: 646
00039 - SERIOUS DELINQUENCY
00018 - NUMBER OF ACCOUNTS WITH DELINQUENCY
00014 - LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED
00013 - TIME SINCE DELINQUENCY IS TOO RECENT OR UNKNOWN

 

TRANSUNION/FICO CLASSIC (04)
SCORE: 637
038 - SERIOUS DELINQUENCY, AND PUBLIC RECORD OR COLLECTION FILED
018 - NUMBER OF ACCOUNTS WITH DELINQUENCY
021 - AMOUNT PAST DUE ON ACCOUNTS
013 - TIME SINCE DELINQUENCY IS TOO RECENT OR UNKNOWN
FA - INQUIRIES IMPACTED THE CREDIT SCORE

 

EXPERIAN/FAIR, ISAAC (VER. 2)
SCORE: 636
38 - SERIOUS DELINQUENCY AND PUBLIC RECORD OR COLLECTION FILED
18 - NUMBER OF ACCOUNTS WITH DELINQUENCY
14 - LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED
21 - AMOUNT PAST DUE ON ACCOUNTS
08 - TOO MANY INQUIRIES LAST 12 MONTHS

 

Inquiries

2 - EXP

1 - TU

1 - TU

 

Thank you for your feedback! 


@credit8502020 I don't know how much AZEO is going to help him being in a dirty card, but let's hope. (You always want them to only have a balance on one card.) Yeah getting revolvers would probably provide some points and since he's in a dirty card, there's no new account penalty. The aging won't matter unless he's right on the threshold and it wouldn't be much of a loss anyway. 

 

Question is, will lender will approve him with another new account? other than that, you need 1. time away from the derogs without updates, or 2. paid+time or delete on COs, 3. and/or PDF all CAs. 


@Anonymous Yes. I'm hoping it will help. We'll see. Ok. Regarding the new revolver. Yes, one of my lenders has no problem with the new account. They only want the score. I'm waiting to hear back from another lender regarding the new account, but I don't think they will have an issue either. 


Whether they "have a problem with it" or not, it will no doubt lower your client's mortgage scores across the board.  The mortgage scores are hypersensitive to new inquiries and new accounts.


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 8 of 45
Anonymous
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Re: Helping a Client - Veteran Client Needs 3 Points for Loan Approval!

@credit8502020 If they don’t care about the new accounts, one more revolver at zero balance will assist, imho.

Message 9 of 45
Anonymous
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Re: Helping a Client - Veteran Client Needs 3 Points for Loan Approval!

SJ, He’s already in a dirty scorecard, so the only penalty is going to be average ages and the inquiry, but maybe they can get a soft pull card? Edited. 

Message 10 of 45
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