I am curious if anyone has any data on mortgage scoring. I don't think anything will change in my profile that could drop my MMS of 791 below 760 for the best rates so I am not worried per se, but curious if anyone has datapoints around a few specific reason codes:
1) You opened a new credit account relatively recently -- I have not opened an account since May 2019. Does anyone know how long the most recent account needs to be before this reason code would go away?
2) You have not established a long revolving and/or open-ended account credit history. -- My average age of accounts is 74 months, I know that until I reach 9 years or so I will see this one -- and the new accounts from the Mortgage and a couple of new cards I plan to get after will bring the average down as well.
3) You have too many credit accounts with balances. -- I know I am pretty terrible with AZEO as mentioned here, I know people advise to not use credit at all when looking to buy a house but with my overall utilization being around 2% and my DTI being in good shape I am not too worried about using my cards as normal, just not putting any big purchases. I am specifically curious though, do I have to be 100% at AZEO for this reason code to go away or is there some percentage of cards reporting that is ideal?
4) You have a consumer finance account on your credit report. -- This is from a LendingClub loan that I took out in 2015, it has been closed since 2017 but obviously will be on for 10 years. Any thoughts how many points this could be dropping me?
While I don't see a reason code about it, I do have an auto loan that is currently reporting at just over 50% of the original balance, planning to pay it down so it is below the 50% threshold, wondering if anyone has any insights into how that may impact the mortgage scores.
I appreciate the detailed response. Clearly my understanding of some stuff is wrong, I don't know how I thought there was a 50% threshold on installment loans. I could pay the auto loan down below 9% but honestly would rather have the cash available and I am pretty sure anything about 760 I am getting the best rates available.
I will report back when that reason code falls, it is showing up on TU and EQ, my EX score is 814 and shows no reason codes. My oldest revolver is from February 2015. I made the mistake of closing my secured card with CapitalOne that was from 2012.
What is considered a thick score card? I have 13 total revolvers (11 being my active cards), 1 auto loan and 2 Student Loan accounts (extremely low balances $559 and $638 -- I haven't paid them off because I didn't want to have any account changes though I suspect with the active auto loan it wouldn't necessarily hurt).
At this point I am just trying to learn more about how things work so I can avoid anything happening that is going to drop my MMS below 760.
@sxa001 wrote:I am curious if anyone has any data on mortgage scoring. I don't think anything will change in my profile that could drop my MMS of 791 below 760 for the best rates so I am not worried per se, but curious if anyone has datapoints around a few specific reason codes:
1) You opened a new credit account relatively recently -- I have not opened an account since May 2019. Does anyone know how long the most recent account needs to be before this reason code would go away?
No. It probably varies.
2) You have not established a long revolving and/or open-ended account credit history. -- My average age of accounts is 74 months, I know that until I reach 9 years or so I will see this one -- and the new accounts from the Mortgage and a couple of new cards I plan to get after will bring the average down as well.
Probably right.
3) You have too many credit accounts with balances. -- I know I am pretty terrible with AZEO as mentioned here, I know people advise to not use credit at all when looking to buy a house
I never heard of any such advice. The advice is not to apply for new credit. There's nothing wrong with using your revolving credit so long as you keep your utilization down.
but with my overall utilization being around 2% and my DTI being in good shape I am not too worried about using my cards as normal, just not putting any big purchases. I am specifically curious though, do I have to be 100% at AZEO for this reason code to go away or is there some percentage of cards reporting that is ideal?
No you don't. AZEO is just an insurance policy that you're not overstepping, but in most profiles the difference between 1 account reporting a balance and 2 or 3 accounts reporting a difference is slim to none.
4) You have a consumer finance account on your credit report. -- This is from a LendingClub loan that I took out in 2015, it has been closed since 2017 but obviously will be on for 10 years. Any thoughts how many points this could be dropping me?
I doubt it's costing any points at all.
While I don't see a reason code about it, I do have an auto loan that is currently reporting at just over 50% of the original balance, planning to pay it down so it is below the 50% threshold, wondering if anyone has any insights into how that may impact the mortgage scores.Installment loan utilization has very little effect on mortgage scores.
Even with the FICO 8 scores, which do care about installment utilization, 50% is not a known "threshold".
