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

[Anonymous]

Paying off the self lender is probably going to be the best thing he can do, so he doesn’t have another account with a balance, if he’s going to proceed now. unfortunately the damage to ages can’t be reversed.

If he’s not going to proceed now, I guess it wouldn’t hurt to leave it open and accumulate payment history to offset the negative, since even if you close it, the damage is done now. You should probably start instructing them not to do anything without talking to you first!

Well I guess you’ll find out how much a new account will cost him now whether we like it or not huh? Did that cost him an inquiry penalty? That could’ve got him a revolver that would’ve gained him points and the mortgage, smh.

Well I still think a revolver will still get him a couple points, but due to this self lender he’s probably gonna end up losing more points than he’s going to be able to add. Still the best thing he can do is add a revolver and then he’s just gonna have to wait until it goes up. Meanwhile he’s got to deal with that chargeoff thats regularly updating, that will also tremendously help him.

I mean you could still try it, but as close as he is and with the selflender reporting too, it may now be a stretch.

[credit8502020]

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@Anonymous wrote:

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@credit8502020 wrote:

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@Anonymous wrote:

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@credit8502020 wrote:

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@Anonymous wrote:

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. 

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@Anonymous Yes. He was considering a card that would not require a hard pull. I'm not holding you to this, but how much of a penalty do you think should be expected for the average age decreasing? 

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@credit8502020 To even speculate you would need the date of account opening for every account on his CR. You would have to figure then what his the average age is. Then calculate what the new avg age would be with the new account. Also give me before and after average age of revolving accounts, then I will hazard a guess. 

if his average age is already low or not near a threshold, he may not cross one and there may be no loss for it. But, if he crosses one threshold on a PR card? maybe ~3 points? He may get 5 for the card?

Put adding 2 new accounts into the simulator and how does that come out with 2 new revolvers? What did it say adding the one?

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So do I calculate the average age of all account and then avg age of just revolving? His average age is definitely already low, but what are the thresholds? Is 6 months a threshold? 
Open Dates are as follows: 
Revolvers

Capital One - $500 - Opened 2/2020
Credit One Card - $300 - Opened 6/2020

Installment

Capital One Auto - April 2018

Derogs

WF Auto - 7/13 & 2/18 - I'm not sure why it has 2 dates under the Date Opened Section

Paid Collection (Collection Agency - For a College) - 8/15

Paid Collection 2 (Collection Agency - For VA) - 12/14 & 3/15

I'm waiting to hear back from the lender. But when it was put into the simulator it said it would take some time to add points, but they didn't mention that it would hurt them. Since the client is waiting to get those negatives removed anyway, they wanted to build their credit in the meantime. 

Someone also gave them advice to add a Self Account and they did before I spoke with them again. I didn't think it was necessary considering they already have an installment loan, but I could be wrong....

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@credit8502020 All the self lender did was screw them by giving them another account with a balance which the mortgage scores hate. And lowered average age that's the worst advice he could've gotten, and it increased DTI. That just screwed the pooch. 

is the Wells Fargo with two dates also a collection? And why does the last collection have two dates? The dates I need for the collections are the dates they were opened, not when they were paid, same thing for all the other accounts only the date of opening.

yes you calculate average age with all opening dates and you calculate average revolving by calculating the opening dates of all revolvers. Then you do a second set of calculations adding in the first of this month or next month for a proposed new account to see the effect. 

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@Anonymous You think they could close it? They just signed up for it today....

No, the Wells Fargo is the CO. I'm not sure why the collection has 2 dates. Actually I looked back at it and I think the 2nd date is the Date of Last Activity. 

The dates I posted were the open dates. Wells Fargo's open date is 7/13 & Paid Collection 2 is 12/14

[credit8502020]

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@Anonymous wrote:
Paying off the self lender is probably going to be the best thing he can do, so he doesn’t have another account with a balance, if he’s going to proceed now. unfortunately the damage to ages can’t be reversed.

If he’s not going to proceed now, I guess it wouldn’t hurt to leave it open and accumulate payment history to offset the negative, since even if you close it, the damage is done now. You should probably start instructing them not to do anything without talking to you first!

Well I guess you’ll find out how much a new account will cost him now whether we like it or not huh? Did that cost him an inquiry penalty? That could’ve got him a revolver that would’ve gained him points and the mortgage, smh.

Well I still think a revolver will still get him a couple points, but due to this self lender he’s probably gonna end up losing more points than he’s going to be able to add. Still the best thing he can do is add a revolver and then he’s just gonna have to wait until it goes up. Meanwhile he’s got to deal with that chargeoff thats regularly updating, that will also tremendously help him.

I mean you could still try it, but as close as he is and with the selflender reporting too, it may now be a stretch.

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@Anonymous Ok. Do you think he could do the strategy of paying it down similar to how it would be done with a NFCU Secured Loan? They did the $35/month Self Lender account for 24 months. Based on what I read, Self does a soft inquiry. 

[Anonymous]

That strategy is not for the mortgage scores that is for 8 and 9 and it’s aggregate, so it would have to bring his aggregate installment percentage down and again that’s not gonna help the mortgage scores anyway.

no he can close it today and it’s too late. they opened it and I don’t see how you can stop it from reporting, you can try but I’ve never heard of it being successful.

[Anonymous]

Unless you can get the rest of this pulled off before it reports. So that means you need a secured card to report before it does and then pull the score before the self lender reports.

[credit8502020]

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@Anonymous wrote:
That strategy is not for the mortgage scores that is for 8 and 9 and it’s aggregate, so it would have to bring his aggregate installment percentage down and again that’s not gonna help the mortgage scores anyway.

no he can close it today and it’s too late. they opened it and I don’t see how you can stop it from reporting, you can try but I’ve never heard of it being successful.

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@Anonymous Ok. Thanks! Got it. I guess they'll see soon how it impacts their credit.

[credit8502020]

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@Anonymous wrote:
Unless you can get the rest of this pulled off before it reports. So that means you need a secured card to report before it does and then pull the score before the self lender reports.

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@Anonymous They are probably going to open the new credit card by tomorrow. So we'll see soon! 

[Anonymous]

@credit8502020 I’m sorry I wish I could give better advice but since he’s already done it, may as well get a secured card too for what it’s worth and then he’s going to have to just play the waiting game. Because I suspect that self lender is going to put him out of reach. But we shall see.

I can still calculate the ages when I get a chance if you want me to but like I said the effects they are going to be negligible, what's going to hurt him is another account reporting with a balance.

[credit8502020]

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@Anonymous wrote:

@credit8502020 I’m sorry I wish I could give better advice but since he’s already done it, may as well get a secured card too for what it’s worth and then he’s going to have to just play the waiting game. Because I suspect that self lender is going to put him out of reach. But we shall see.

I can still calculate the ages when I get a chance if you want me to but like I said the effects they are going to be negligible, what's going to hurt him is another account reporting with a balance.

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@Anonymous Ok. Thank you! 

[dustind]

Self doesn't do soft or hard inquiries. Not doing any credit check is the only way they can avoid a hard pull. They do use bank chex or whatever it is called.

I would contact self and tell them to cancel before they report. IIRC they can do that. It took 16 days for my account to show on my credit report, opened on the 14th appeared on the 30th.

One advantage to Self is that if he can wait 3 months he can get a secured card from them without a credit check and thus no hard pull. They secure it against the payments he has already made.