@Anonymous wrote:I plan to take a mortgage in 2021 and only recently learnt about the "middle mortgage" score. From the myFICO report I see that TransUnion in general has much more favorable scores for me across the board than Equifax or Experian, which are pulling my "middle" score down.
Account age details
- Last account opened: 5 mo. ago (personal loan that I plan to close by March)
- Oldest account: 4 years 9 months
- Average age of accounts: 2 years 7 mo.
Other details
- Excellent payment history through entire 4 year 9 mo. period, no defaults or late payments
- Average credit card utilization hovers between 0% and 1%, peak individual card utilization under 10%
- Outstanding loan balance (auto + personal) at 41%
- 1 credit card opened Dec 2019, 4 opened between March 1 and 7, 2020
Questions
- Can I expect my mortgage scores to go up significantly (closer to TransUnion) in March or April?
No.
2. I currently have 20 credit cards, 1 personal loan and 1 auto loan, all reporting to the 3 bureaus. Will closing the personal loan hurt my score?
It won't hurt your scores, it could possibly help your scores a little. My EX FICO 2 gave me 11 points when I closed out 4 of 6 personal loans.
3. Will closing my 5 new credit cards (1 opened Dec 19, 4 in Mar 20) help my score materially?
Not even a little bit
My advice to you is:
(a) no new applications for credit, and no applications of any kind that could result in a hard pull (e.g. CLI's, cell phone contracts, credit union memberships, apartment rental applications, etc)
(b) if it's possible for you to get the total loan balances down to 9% or less of the total original loan amounts you might be able to pick up a few points in one of your mortgage scores by doing that
(c) make sure your revolvers always have one account reporting a small balance before you pay it off
Score details
EQ8 737
TU8 763
EX8 743
EQ5 726 (-11)
TU4 754 (-9)
EX2 725 (-18)
Equifax reasons
- New account
- Short account history
- Seeking credit (4 inquiries in 12 mo.)
- Short revolving history
Experian reasons
- Short account history
- Seeking credit (8 inquiries in 12 mo.)
- Accounts with balances
- Many new accounts
@SouthJamaica wrote:2. I currently have 20 credit cards, 1 personal loan and 1 auto loan, all reporting to the 3 bureaus. Will closing the personal loan hurt my score?
It won't hurt your scores, it could possibly help your scores a little. My EX FICO 2 gave me 11 points when I closed out 4 of 6 personal loans.
My advice to you is:
(a) no new applications for credit, and no applications of any kind that could result in a hard pull (e.g. CLI's, cell phone contracts, credit union memberships, apartment rental applications, etc)
Agreed, I am not even doing soft pulls right now, LOL.
(b) if it's possible for you to get the total loan balances down to 9% or less of the total original loan amounts you might be able to pick up a few points in one of your mortgage scores by doing that
That's my plan - preferably completely close the loan late Feb / early March. Additionally, mid-March should be 1 year from last inquiries, so I am hoping these two events combined give a decent boost.
(c) make sure your revolvers always have one account reporting a small balance before you pay it off
@dragontears wrote:@Anonymous welcome to the forum
Thank you! Have been lurking around in read only mode all these years
1. Possibly, my mortgage scores increase ~20 points when my youngest credit card turned 1 year old.
Fingers crossed 🤞
When it is close to applying for the mortgage implement AZEO, mortgage scores love it when you only have a balance on one credit card.
Wasn't aware of AZEO, thanks! Now that I see what it is, I can relate to Experian's "accounts with balances" flag.