Means to reach an optimal score in 12 months question

[Anonymous]

Hi,  question for the score buffs:

I'm rebuilding, trashed credit in 2009/10.  I have student loan lates from 2011.  Otherwise no collections, one charge off DOFD 11/2009.  One satisfied judgement for $1500 vacated, but still showing on EQ, from 2013.   One old paid mortgage, house sold in 2011.

Cards:  Cap 1 QS 18 mos old, a second cap1 4 months old, store card 4 months and 2 recent cards from Feb 2016 (discover and local CU)   Currently 4 are reporting small balances, but this changes weekly.    I am paying them all in full, but at times, they will be charged up to 50 percent of their limits. 

I would like to buy a house in 12-18 months.

I understand the concept of having all cards except one report at zero, and one at less than 10 percent.     I have heard that this tweaking is not necessary until just prior to a mortgage app, is this correct?   

Alternatively, I read on a thread here, that fico will Bucket users that have balances on many cards, and with over 10 percent of credit limit used.   So, if this is true, I should constantly trying to keep my balances low?  And with only one card reporting?

This is tricky for me, because my limits are so low on my cards.   Also, because I would like to USE my new cards, and not worry about reporting dates for now (so I can demonstrate use for future CLI and unsecuring of Discover etc).

Just wondering what the best method would be for using my cards in the next 8 - 12 months.    If the bucketing threat is real, I will pay more attention to statement reporting and be more conservative with use.

Thanks in advance!

[silkysean]

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@Anonymous wrote:

Hi,  question for the score buffs:

I'm rebuilding, trashed credit in 2009/10.  I have student loan lates from 2011.  Otherwise no collections, one charge off DOFD 11/2009.  One satisfied judgement for $1500 vacated, but still showing on EQ, from 2013.   One old paid mortgage, house sold in 2011.

Cards:  Cap 1 QS 18 mos old, a second cap1 4 months old, store card 4 months and 2 recent cards from Feb 2016 (discover and local CU)   Currently 4 are reporting small balances, but this changes weekly.    I am paying them all in full, but at times, they will be charged up to 50 percent of their limits. 

I would like to buy a house in 12-18 months.

I understand the concept of having all cards except one report at zero, and one at less than 10 percent.     I have heard that this tweaking is not necessary until just prior to a mortgage app, is this correct?   

Alternatively, I read on a thread here, that fico will Bucket users that have balances on many cards, and with over 10 percent of credit limit used.   So, if this is true, I should constantly trying to keep my balances low?  And with only one card reporting?

This is tricky for me, because my limits are so low on my cards.   Also, because I would like to USE my new cards, and not worry about reporting dates for now (so I can demonstrate use for future CLI and unsecuring of Discover etc).

Just wondering what the best method would be for using my cards in the next 8 - 12 months.    If the bucketing threat is real, I will pay more attention to statement reporting and be more conservative with use.

Thanks in advance!

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Sounds like your on the right track.First make sure judgement doesn't report if so dispute it and send proof it was vacated.For student loans if you can rehabilitate I would.Your fico 8 scores are not the same scores used for mortgage those are another set so make sure at the 1 year mark you change over to fico 3b because you will get fico 8 scores plus Others like aut,credit card and Mortage which most mortgage companies use.Also the rebuilding section is where you want to go along with the Mortage forum and you will get on track with great advice.Good luck 

[manyquestions]

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@Anonymous wrote:

I understand the concept of having all cards except one report at zero, and one at less than 10 percent.     I have heard that this tweaking is not necessary until just prior to a mortgage app, is this correct?   

Alternatively, I read on a thread here, that fico will Bucket users that have balances on many cards, and with over 10 percent of credit limit used.   So, if this is true, I should constantly trying to keep my balances low?  And with only one card reporting?

This is tricky for me, because my limits are so low on my cards.   Also, because I would like to USE my new cards, and not worry about reporting dates for now (so I can demonstrate use for future CLI and unsecuring of Discover etc).

Just wondering what the best method would be for using my cards in the next 8 - 12 months.    If the bucketing threat is real, I will pay more attention to statement reporting and be more conservative with use.

Thanks in advance!

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I used to always do the one card thing but over the last year I've relaxed about it and often let several report.  In my experience, my scores always pop back up so I don't seem to have experienced any effects that have not responded to current monthly input. I've never experienced any sort of "memory" with FICO scores. For me, every month has been a new month with scores based on the current data on my reports. I believe my scores are calculated based on whatever data is showing on my reports at that point in time.

For now, I'd use your cards as you see fit.  The factor that will have the biggest impact on your scores is if you can get rid of  any negatives. That is what I would focus on if you want to work on improving your scores.. Negatives are the main thing that can limit how high your score can go.

[StartingOver10]

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@Anonymous wrote:

Hi,  question for the score buffs:

I'm rebuilding, trashed credit in 2009/10.  I have student loan lates from 2011.  Otherwise no collections, one charge off DOFD 11/2009.  One satisfied judgement for $1500 vacated, but still showing on EQ, from 2013.   One old paid mortgage, house sold in 2011.

Cards:  Cap 1 QS 18 mos old, a second cap1 4 months old, store card 4 months and 2 recent cards from Feb 2016 (discover and local CU)   Currently 4 are reporting small balances, but this changes weekly.    I am paying them all in full, but at times, they will be charged up to 50 percent of their limits. 

I would like to buy a house in 12-18 months.

I understand the concept of having all cards except one report at zero, and one at less than 10 percent.     I have heard that this tweaking is not necessary until just prior to a mortgage app, is this correct?   

Alternatively, I read on a thread here, that fico will Bucket users that have balances on many cards, and with over 10 percent of credit limit used.   So, if this is true, I should constantly trying to keep my balances low?  And with only one card reporting?

This is tricky for me, because my limits are so low on my cards.   Also, because I would like to USE my new cards, and not worry about reporting dates for now (so I can demonstrate use for future CLI and unsecuring of Discover etc).

Just wondering what the best method would be for using my cards in the next 8 - 12 months.    If the bucketing threat is real, I will pay more attention to statement reporting and be more conservative with use.

Thanks in advance!

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Couple of points:

• Make sure your judgment Satisfaction is recorded in the actual public records.  If you don't record it, the judgment is still in full force and effect. You should be able to get the judgment removed from your credit report by sending in a copy of the recorded satisfaction to the CRB.
• You can use your cards as long as you aren't building up debt.  About 60 to 90 days before you plan to apply for a mortgage pay off all balances except one and have that balance show as less than 9% (not 10%) of the individual credit card limit to optimize your score.  The calculation of your utilization is continuous - each time you pull your report/score and the scoring algorium has no memory of previous utilization calculations on your CR. 
• Read more in depth about bucketing. I don't know enough about this area to give you information.  I thought as long as you had any derog on your report you were in a "dirty" bucket.  But don't take my word on it - others here know more about it than I do. 

[Anonymous]

Look after that judgement as others have said.  Should help.

On the # cards - it's not a bad idea to be aware of the reporting dates so you get in the habit of making a concious decision whether to show a balance or not.

Run a trial where you let all but one report 0 for a month, just so you see what effect it really has on your score.  Then let balances report (or not) and see how your score is affected as each hits.  That will give you an idea of how much your score may increase when you optimize for the mortgage pulls.

Otherwise I wouldn't worry about keeping them all optimal until you get three months out from your mortgage shopping.

[NRB525]

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@StartingOver10 wrote:

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Couple of points:

• Make sure your judgment Satisfaction is recorded in the actual public records.  If you don't record it, the judgment is still in full force and effect. You should be able to get the judgment removed from your credit report by sending in a copy of the recorded satisfaction to the CRB.
• You can use your cards as long as you aren't building up debt.  About 60 to 90 days before you plan to apply for a mortgage pay off all balances except one and have that balance show as less than 9% (not 10%) of the individual credit card limit to optimize your score.  The calculation of your utilization is continuous - each time you pull your report/score and the scoring algorium has no memory of previous utilization calculations on your CR. 
• Read more in depth about bucketing. I don't know enough about this area to give you information.  I thought as long as you had any derog on your report you were in a "dirty" bucket.  But don't take my word on it - others here know more about it than I do. 

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I would rephrase this one as "Utilization is point in time". There is no tracking of utilization percentages over a continuous sequence of time, it's just "what is utilization right now, today".

[NRB525]

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@Anonymous wrote:

Look after that judgement as others have said.  Should help.

On the # cards - it's not a bad idea to be aware of the reporting dates so you get in the habit of making a concious decision whether to show a balance or not.

Run a trial where you let all but one report 0 for a month, just so you see what effect it really has on your score.  Then let balances report (or not) and see how your score is affected as each hits.  That will give you an idea of how much your score may increase when you optimize for the mortgage pulls.

Otherwise I wouldn't worry about keeping them all optimal until you get three months out from your mortgage shopping.

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Keep in mind that the "easy to find" FICO 08 scores are on a different set of criteria from the Mortgage models. One may not see much movement on a FICO 08 Bankcard score, with most or all cards reporting (I let all cards report whatever they will) but the Mortgage scores are likely more significantly affected by most/all cards reporting. This only becomes a factor when the OP applies for a mortgage, but it will only be possible to guage where the OP is in Mortgage scoring by getting the 3B report that includes those specific Mortgage scores.

[Anonymous]

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@NRB525 wrote:

Keep in mind that the "easy to find" FICO 08 scores are on a different set of criteria from the Mortgage models. One may not see much movement on a FICO 08 Bankcard score, with most or all cards reporting (I let all cards report whatever they will) but the Mortgage scores are likely more significantly affected by most/all cards reporting. This only becomes a factor when the OP applies for a mortgage, but it will only be possible to guage where the OP is in Mortgage scoring by getting the 3B report that includes those specific Mortgage scores.

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True.  It wouldn't be cost effective to pull a new 3B for each card, but pulling 1 when the OP is down to 1 card may be worth it to see if there was any significant movement.  I'd hate to get three months out & optimized, then pull and see there wasn't much of a change after all.  Not a lot of time to make other adjustments at that point.

[Anonymous]

Thank you so much everyone.

Regarding the bad marks:

The judgement is satisfied, and TU and EXP have removed it.  Equifax refuses to budge, I even filed a CFPB complaint.   I'm at a standstill there with Equifax.

The student loans are paid for.  A company named Suntrust had them, and sold them to another lender.  However, they were late when they were w/Suntrust, and that tradleine is reporting, with lates, and a comment "sold to another lender".   I have written a goodwill letter to them with no success.   The said "reporting acurately etc".

So it seems now all I can do is move forward.   I will test the one reporting at less than 10 percent to see what a difference it makes.   

But thank you for your advice, I won't focus on the "tweaking" until 3 months prior to a morgage app.  I will likely continue to rotate my cards weekly as I have been, to show "use", and pay in full on payday as I have been, without worring too much about the reporting dates until shourtly before mortgage time.  I suppose I am already in a poor bucket so I won't worry about that.

I will pull my 3 morgage scores after a few months before and after the one card test also!  I'm terrified to pull them now.....

[NRB525]

The advantage of pulling the reports now is that you put a specific number on what your mortgage score really is.

That takes out the "wonder" aspect. It also gives you a solid understanding of where you are, so you can measure progress in the future.

A mortgage is a major financial transaction. The 3B reports do cost some money today, but all good information is not free.