Mortgage Score - Installment Utilization

[Anonymous]

Hi all,

Had a mortgage loan process go belly up after my credit report got hit with a $185 electricity collection for a property I sold in 2018.  Had no idea there was a remaining balance.  Anyhow, I've been working on getting my score back up since - doing all the right things.  4 credit cards total, 3 report $0 each month and one reports a small amount. 

I have only one other option I can mess with to get some points.  I currently have a mortgage that has an original loan amount of $300K.  The blanace is $298K.  This is for the lot I was going to build my house on.  Is anyone aware if Installment Utilization decrease can provide a 10-15 point jump to FICO Mortgage Scores?  I've read and read these forums but it was hard to find a definitive answer.  I can pay the loan down to 65-69% of the original loan amount.

Any experience you can share with this would be great.  Many thanks.

[Anonymous]

Installment Utilization has zero effect on two of the three mortgage scores.  I would not spend a lot of money paying down a loan for what is likely a phantom benefit.

If you have not yet paid the collection, however, then here you could get a huge benefit.  The solution would be to negotiate a Pay For Delete arrangement with the collection agency.  Getting the collection deleted after it is paid is vastly more difficult, so the time to investigate a PFD is before paying it.

[SouthJamaica]

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@Anonymous wrote:

Hi all,

Had a mortgage loan process go belly up after my credit report got hit with a $185 electricity collection for a property I sold in 2018.  Had no idea there was a remaining balance.  Anyhow, I've been working on getting my score back up since - doing all the right things.  4 credit cards total, 3 report $0 each month and one reports a small amount. 

I have only one other option I can mess with to get some points.  I currently have a mortgage that has an original loan amount of $300K.  The blanace is $298K.  This is for the lot I was going to build my house on.  Is anyone aware if Installment Utilization decrease can provide a 10-15 point jump to FICO Mortgage Scores?  I've read and read these forums but it was hard to find a definitive answer.  I can pay the loan down to 65-69% of the original loan amount.

Any experience you can share with this would be great.  Many thanks.

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I don't think it will do your mortgage scores much good but it might be worth a shot.

Installment utilization never affects my EX FICO 2 or EQ FICO 5, and only slightly affects TU FICO 4.

I believe @Revelate reported that it never affects his TU & EQ scores, but does slightly affect EX.

[Revelate]

Yeah paying down a mortgage by a non-trivial amount unless the one for the land is in the 6%+ APR range makes little sense.

When I found the installment loan utilization my EQ and TU mortgage scores don’t move, whereas I only got 6 points on EX FICO 2 for crossing a boundary we haven’t been able to nail down concretely since.

That was with a collection on my account too so I wouldn’t expect it to make much of an impact if any for you.

Work on seeing if you can get the collection off would be my recommendation.