How to increase score by 30 points in one month

[Thomas_Thumb]

Please note: I revised my above post to correct some errors (initially used some of the 2/16 balances by mistake.

Also, you may want to check my numbers. The paydowns and remaining balances are paper/pencil calculations. 

[Anonymous]

I completely appreciate everyone's replies. I was searching on the Internet trying to figure out the best option and was having difficulty. I am glad I paid for the myfico account.

We originally were planning to purchase a home next year. We were told we qualified for a USDA loan so to take advantage of that before my husband received his yearly raise we looked at houses. We agreed to putting more down as a good faith estimate due to the sellers asking for a later settlement date. After the contract was signed the underwriters said we are not approved so had to switch to a FHA loan. I only need a 620 score as my middle score( 631 was my middle score) but I want to do everything to get it as high as possible.

The house situation is wiping us out initially but we are already $6,000 invested in it and invested for my son's school.

I again appreciate all the information!!!

[RonM21]

I hope once you get it all together, it works out the way you would like. Please update if you could, on the progress!

[Anonymous]

Thanks! I will! By Tuesday, I will be making payments on the cards. Hope by 15th or 16th to have it done. Hopefully being able to have the balances paid off/down by mid June will show the changes in July. I was reading that mortgage lenders can ask for a rapid rescore from the credit bureaus which could raise my credit score if the payments are made. 

[SouthJamaica]

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@Anonymous wrote:
Hi, my credit score for mortgage version down by 30 points due to using credit cards by $3,000. If I pay down the cards by $2,000 (figuring out 30% utilization and paying down by that) would that raise my score close to 630 in a month'since time?

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No one knows how many points you will pick up but having all but one of your credit cards reporting at zero, and the other one reporting at 9% or less, will optimize your scores.

[SouthJamaica]

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@Thomas_Thumb wrote:

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@Anonymous wrote:
We were discharged Ch 7 bankruptcy in 8/2011. A couple of cards included in bankruptcy marked items as charge off and I recently disputed it.
And doing this list, cards went up more than realized spouse used. I can at least have $2000 pay downed by end of month.

Cards now........ what it was 2/16
$3754/4400.. 3900 ..[pay down to [$3354]
1563/2500.... 0
1053/3500..... 0
4800/5000....4600 ....[pay down to $4425]
1648/2000.....1700....[pay down to $1348]
480/900.....91 ...........[pay down to 0]
445/2000.....100........[pay down to 0]

Remaining balance = $9127. Total CL is $20,300. That puts your aggregate utilization at around 46% which should give you some points because you went from over 50% to under 50%. Really need to get Aggregate utilization below 30% (below $6090) for a more substantial AG UT score bump

Closing on our house is 7/29 and mortgage will pull credit again mid July. Version 2 went from 631 to 606, need it to be at least 620.

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There are three factors that influence Fico score relative to credit card utilization:

1) Aggregate utilization (all cards combined) - a couple key thresholds on this are under 50% and under 30%

2) Individual card utilization - a few thresholds for this are under maxout (90%), under very high UT (70%) and under 50%

3) Number and/% of cards reporting a balance - a couple potential thresholds are 1/2 or less and 1/3 or less of total cards reporting a balance.

Aggregate utilization has the biggest impact on score. The $2000 paydown will have a set impact on aggregate utilization so it boils down to how to distribute the $2k across the cards. Key point is to get all cards below a maxout condition [which I peg at 90% and reduce # reporting balances. I would suggest the following:

1) Pay off the two cards with small balances to reduce # reporting a balance from 5 of 7 to 3 of 7. [pay $925]

2) That leaves $1075

3) Now get the other $2000 CL card to under 70% balance remaining (say to $1348 - pay $300)

4) That leaves $775 remaining

5) Pay down $5000 CL card to under 90% remaining (say to $4425 - pay $375)

4) That leaves $400

6 Drop balance on $4400 CL card to $3354 (from $3754 - pay $400)

Good Luck

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Good plan

[Anonymous]

Unfortunately, I cannot financially do that at this time.

Today, I made the payments to the below accounts. On the 15th, I will be making the rest of the payments. I will hopefully, too, be able to make a payment on the $1500/2500 balance.

4800/5000....4600 ....[pay down to $4425]

1648/2000.....1700....[pay down to $1348]

[SouthJamaica]

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@Anonymous wrote:

Unfortunately, I cannot financially do that at this time.

Today, I made the payments to the below accounts. On the 15th, I will be making the rest of the payments. I will hopefully, too, be able to make a payment on the $1500/2500 balance.

4800/5000....4600 ....[pay down to $4425]

1648/2000.....1700....[pay down to $1348]

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Yeah sorry about that, had I read your following posts more closely I would have known that. Thankfully, Thomas_Thumb has given you a sound plan consistent with your economic realities at the moment.

[Thomas_Thumb]

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@Thomas_Thumb wrote:

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@Anonymous wrote:
We were discharged Ch 7 bankruptcy in 8/2011. A couple of cards included in bankruptcy marked items as charge off and I recently disputed it.
And doing this list, cards went up more than realized spouse used. I can at least have $2000 pay downed by end of month.

Cards now........ what it was 2/16
$3754/4400.. 3900 ..[pay down to [$3354]
1563/2500.... 0 ........[pay down to $1000] - phase 2
1053/3500..... 0 .......[pay down to 0] - phase 2
4800/5000....4600 ....[pay down to $4425]
1648/2000.....1700....[pay down to $1348]
480/900.....91 ...........[pay down to 0]
445/2000.....100........[pay down to 0]

See edit below 6/6/2016

Remaining balance = $11,743. Total CL is $20,300. That puts your aggregate utilization at around 58%.  In order to get below 50% balance needs to be reduced to under $10,150. Suggested additional payments are shown in purple above. Total balance after additional payments would be: $10,127 (49.9%)

Closing on our house is 7/29 and mortgage will pull credit again mid July. Version 2 went from 631 to 606, need it to be at least 620.

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There are three factors that influence Fico score relative to credit card utilization:

1) Aggregate utilization (all cards combined) - a couple key thresholds on this are under 50% and under 30%

2) Individual card utilization - a few thresholds for this are under maxout (90%), under very high UT (70%) and under 50%

3) Number and/% of cards reporting a balance - a couple potential thresholds are 1/2 or less and 1/3 or less of total cards reporting a balance.

Aggregate utilization has the biggest impact on score. The $2000 paydown will have a set impact on aggregate utilization so it boils down to how to distribute the $2k across the cards. Key point is to get all cards below a maxout condition [which I peg at 90% and reduce # reporting balances. I would suggest the following:

1) Pay off the two cards with small balances to reduce # reporting a balance from 7 of 7 to 5 of 7. [pay $925]

2) That leaves $1075

3) Now get the other $2000 CL card to under 70% balance remaining (say to $1348 - pay $300)

4) That leaves $775 remaining

5) Pay down $5000 CL card to under 90% remaining (say to $4425 - pay $375)

4) That leaves $400

6 Drop balance on $4400 CL card to $3354 (from $3754 - pay $400)

Good Luck

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Julielynnlewis,

A follow-up review of my earlier post shows that I overlooked the balances on your $2500 and $3500 cards in the prior aggregate balance calculation. Corrections are highlighted in red Unfortunately that means:

1) Your aggregate balance will be $11,743 after paydown NOT $9127.

2) To get an aggregate utilization score boost balance would need to get below the 50% mark of ($10,150). That requires coming up with a little over $1600 and making payments at least one week prior to close. I believe  you/the bank could then request a rapid recalculation of your scores, if needed.

3) If you do come up with additional funds, I would suggest paying off the $3500 CL card and applying the remainder to the $2500 CL card to get its balance below 50%. [cards reporting balances drops to 4 of 7]. Longer term reduce count to 3 of 7 reporting.

I would not change the original plan. It just does not get you under the aggregate utilization threshold of 50% without additional payments.

My apologies.