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How on Earth? Mortgage Scores for Dummies!

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New Member

Re: How on Earth? Mortgage Scores for Dummies!


@SouthJamaica wrote:

@Willow_Firefly wrote:

My husband and I have nothing-- I repeat: NOTHING-uh in collections!!! What we have is a short list of accounts from (four items to be exact), literally 3 years ago (or more) that show $0s owed. I've called all of these collection agencies to ask if they'd remove their "once upon a time, these people were delinquent" presence, and they all refuse. 

 

Our general scores form all three bureaus are outstanding. Then we click on the "commonly used with mortgage lenders" scores, and we may as well have our entire life in collections. We're being penalized for having had items in delinquency before... and we have no idea what will change, or get the middle score up. 

 

We have a practically non-existent debt-to-income ratio. It's actually listed as "good/excellent" or whatever the terminology is. The lender we've been working with recommended we get new credit cards-- which we've done. Our accounts are current and continue to raise, again, our basic fico scores.... but no movement on the mortgage. 

 

What gives???? Does anyone have insight on this. We both work in entertainment... money and downpayments and bills and all of that are no issue. Our child is in private school.... We are literally sitting here paying an astronomical price in rent because our mortgage score hasn't changed in almost a year! 

 

HELP! 

 

Anyone have insight on this??? 


1. Getting new credit cards was the last thing you should have done; mortgage scores do not like recent credit seeking activity. So you should make no new applications for anything, and no credit limit increase requests or anything else that might trigger a hard pull. Never again take advice from the person who gave you that advice, which was like advising you to put out a fire by pouring gasoline on it.

 

2. The mortgage scores are very sensitive to aging factors. So new accounts are your enemy, and the passage of time without new accounts is your friend.

 

3.  The mortgage scores are very sensitive to number of accounts with balances. So you should let all of your revolving accounts, except one, report a zero balance. I.e. pay all of your revolving accounts off before the statement cut, and pay the other one off right after the statement cut.

 

4.  As to the negatives, send verification letters to the bureaus. These sometimes result in the negatives falling off sooner. If you have money, but don't have time, you can hire a service which sends out those letters for you.


THANK YOU FOR THIS!!! Layman's terms... this makes perfect sense... at least puts me in a realistic state of mind, with concrete steps I can take toward a positive outcome. 

Message 11 of 16
Super Contributor

Re: How on Earth? Mortgage Scores for Dummies!


@Willow_Firefly wrote:

It's almost as if we're being penelaized for having HAD accounts delinquent in the past.


You are, as that's the way the algorithm works.  Any late payments or negative information will be visible on your file and adversely impact your Fico scores (all of them) for 7 years.  When it comes to payment history, IMO there are only 2 possible categories... "great" and "poor" with great meaning you've never missed a payment and poor being you've missed 1 or more.  All of the CMS fluff that you see showing that it takes (say) 3-4 late payments to be "poor" or 1-2 to be "fair" etc. is BS, as when it comes to payment history overall you're either clean or dirty.

 

I'd suggest not looking at the CMS fluff that you mentioned earlier... things like alerts telling you congratulations for things, or their arbitrary "ratings" saying you moved from "good" to "very good" or whatever.  None of that matters and those rating words have no bearing on your Fico scores.

 

You also need to clarify which scores you're referencing.  You referenced your Fico scores, then wrote "mortgage scores" and listed 3 more.  Those mortgage scores are in fact Fico scores, but the ones you called "Fico scores" could be any other scoring model(s) and we would need to know which.

Message 12 of 16
Valued Contributor

Re: How on Earth? Mortgage Scores for Dummies!


@Willow_Firefly wrote:

Everyone keeps saying to use less that 30% of the card. I pay my balances off regularly, but was under the impression that continuing to use the cards would help (so long as I showed on-time payments only using 30% or less of the credit line). 

 

Two of these cards I could literally stop using now. (rolls eyes).... 


Technically, you don't have to carry balances to use cards. You say that you PIF, but then say your utilization is 24%?  So if you can PIF, I'd do it  before the statement cuts so that they report zero balances to the CRs. And only let a very small amount post on one card, as some have pointed out who like AZEO. That's the best way to see higher a score short term. Any negatives just have to wait for them to age off if unsuccessful in getting them removed. Which takes patience and determination.






Message 13 of 16
New Member

Re: How on Earth? Mortgage Scores for Dummies!


@Janus wrote:

@Willow_Firefly wrote:

Everyone keeps saying to use less that 30% of the card. I pay my balances off regularly, but was under the impression that continuing to use the cards would help (so long as I showed on-time payments only using 30% or less of the credit line). 

 

Two of these cards I could literally stop using now. (rolls eyes).... 


Technically, you don't have to carry balances to use cards. You say that you PIF, but then say your utilization is 24%?  So if you can PIF, I'd do it  before the statement cuts so that they report zero balances to the CRs. And only let a very small amount post on one card, as some have pointed out who like AZEO. That's the best way to see higher a score short term. Any negatives just have to wait for them to age off if unsuccessful in getting them removed. Which takes patience and determination.


Janus, thank you. ....Will continue to be patient... It's so difficult to balance anxiousness with the true reality. Understanding the reality of things helps. 

Message 14 of 16
New Member

Re: How on Earth? Mortgage Scores for Dummies!


@BrutalBodyShots wrote:

@Willow_Firefly wrote:

It's almost as if we're being penelaized for having HAD accounts delinquent in the past.


You are, as that's the way the algorithm works.  Any late payments or negative information will be visible on your file and adversely impact your Fico scores (all of them) for 7 years.  When it comes to payment history, IMO there are only 2 possible categories... "great" and "poor" with great meaning you've never missed a payment and poor being you've missed 1 or more.  All of the CMS fluff that you see showing that it takes (say) 3-4 late payments to be "poor" or 1-2 to be "fair" etc. is BS, as when it comes to payment history overall you're either clean or dirty.

 

I'd suggest not looking at the CMS fluff that you mentioned earlier... things like alerts telling you congratulations for things, or their arbitrary "ratings" saying you moved from "good" to "very good" or whatever.  None of that matters and those rating words have no bearing on your Fico scores.

 

You also need to clarify which scores you're referencing.  You referenced your Fico scores, then wrote "mortgage scores" and listed 3 more.  Those mortgage scores are in fact Fico scores, but the ones you called "Fico scores" could be any other scoring model(s) and we would need to know which.


"Arbitrary" is the overwhelming sentiment now... I'm totally getting that vibe. I'm off the high of believing I've done something outstanding.... 

 

I soooooo appreciate your insight.... I was going off of FICO.... I'm seeing now that Mortgage scores like longevity, and not necessarily "new money" (for want of a better way to phrase it). It's frustrating, but, I'm just happy I have the information, now. Ugh!..... *inserts eye-roll emoji*

Message 15 of 16
Frequent Contributor

Re: How on Earth? Mortgage Scores for Dummies!

There is still so much more to good credit health. Hopefully you will stick around and read the forum. I read each night before bed, you can learn so much here. Good luck! 




Message 16 of 16
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