@Zoah wrote:Hi,
I need a 680 middle score to qualify for a mortgage. My FICO mortgage scores are:
673 (Exp)
668 (TU)
633 (Equ)
For the past six months I've paid all three credit cards to less than 20% each month and less than 2% over the last 3 months. Two weeks ago I added 3 years of on-time rental payment to TU and EQU. With all of this, my score has only gone up 4 points in 3 months.
My score even went DOWN in the past 30 days. I have a credit card with a $500 limit. I usually pay it off in full each month. I left $9 on the card just to show some activity and my score went down 10 pts! $9 is only 2% utilization. I'm not sure what's going on.
I have one collection from 2017, no real estate (I'm trying to get real estate), and $200K in student loans in deferment (automatically due to COVID). The in app recommendation says I need to pay my student loan down by $75,000 just to raise my score 15 points. I have 7 inquiries all from trying to get approved for a mortgage in Oct all done within a 2 week period.
Does anyone have an insight???? None of this makes sense to me.
Your credit score drop is likely because of the number of cards reporting a balance.
Mortgage scores are sensitive to not only percentage of utilization, but also percentage of card's with a balance.
If you have 10 cards and 5 are reporting a balance, you'd likely get you needed points by paying off 3 more of your cards.
If you aren't familiar with it, I suggest researching AZEO (All Zero Except One).
Mortgage scores want your overall utilization under 9%, individual cards under 29% and no more than one-third of your cards reporting a balance. Simplified, if you have 3 credit cards; two should report $Zero and one should have a small balance that uses more than $5 and less than 28.9% of the limit.
Best of luck with your mortgage shopping!
@Zoah wrote:This is exactly what I did and my score went down.
My credit card balances are:
$0
$0
$9
My score went down 10pts because I took the $0 balance to $9.
By chance, was the card with a balance a store card or credit union card?
I know there is a zero balance penalty... I have read about and personally witnessed retail cards cause score drops... I've also witnessed Authorized User card zero balance penalty (when an AU account reports $Zero balance it appears as though my credit score when I had a thin file, ignored the positive history of the AU account... had 35 point swing based on a single card that was AU).
@Zoah wrote:Hi,
I need a 680 middle score to qualify for a mortgage. My FICO mortgage scores are:
673 (Exp)
668 (TU)
633 (Equ)
For the past six months I've paid all three credit cards to less than 20% each month and less than 2% over the last 3 months. Two weeks ago I added 3 years of on-time rental payment to TU and EQU. With all of this, my score has only gone up 4 points in 3 months.
My score even went DOWN in the past 30 days. I have a credit card with a $500 limit. I usually pay it off in full each month. I left $9 on the card just to show some activity and my score went down 10 pts! $9 is only 2% utilization. I'm not sure what's going on.
I have one collection from 2017, no real estate (I'm trying to get real estate), and $200K in student loans in deferment (automatically due to COVID). The in app recommendation says I need to pay my student loan down by $75,000 just to raise my score 15 points. I have 7 inquiries all from trying to get approved for a mortgage in Oct all done within a 2 week period.
Does anyone have an insight???? None of this makes sense to me.
To optimize your mortgage scores you should (a) refrain from any applications for new credit or for anything that could give you a hard pull, and (b) let one bank card report a small balance ($10-20) and then pay it off asap after the reporting date (usually the statement date), while all the other cards report zero balances.
