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Mortgage score limits with one late payment

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Anonymous
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Mortgage score limits with one late payment

I am trying to boost FICO 5/4/2 scores for a mortgage application.  I want to understand how much I can realistically target based on my current situation. The idea is to get over the 740 mark for near-best rates on jumbo loans. I did a 3B pull last week and got these scores:
FICO 8 EQ/TU/EX scores: 752/760/752

FICO 5/4/2 mortgage scores: 701/725/722


Here's where I stand right now:

Credit card utilization: 5% (which is around $5K - distributed on 3 cards with utilization of 15% / 12% / 3%)

Late payments: 1 missed payment on BofA from Jan 2020 (because of travel)

Installment loans: 3 (total balance of ~31K on 1 auto + 2 personal loans which were taken to fund my brother's education)

Credit age: around 4 years (oldest account is 8 years)

Hard inquiries: 3/2/2 (already have 3 mortgage inquiries in Feb for new construction projects since they all require the mortgage to be with their 'preferred' lender)

 

That 1 missed BoFA payment from Jan 2020 is really hurting me. I am trying to get a goodwill adjustment but have had no success so far. From what I have read, it's really hard to get any GW adjustment from BofA.

I had a few questions regarding what could be a good target for my scores in the next month or so. I don't want to miss out on the low rates we are seeing at the moment in an attempt to boost my credit as any increase would probably be outdone by base rate changes.

 

1. What's my ceiling here with a late payment that's less than 2 years old - is it even possible to go over 740 with that remark on my account?

2. I am planning to do AZEO in the next month - can I actually expect a boost seeing as my utilization is already pretty low? It's financially possible for me to do this, just trying to understand if it's worth the effort to maintain AZEO till we close the house (which might be as much as 2-3 months looking at the current market!)

3. How important is the "credit mix" to the FICO 5/4/2 scores? I have an auto loan that ends in June (~$900 balance, 2 payments left). I took 2 personal loans to fund my brother's education since he could not qualify for any education loans. One of them ends in October (~5K balance, 5 payments left) and another will go on for 2 more years (~25K balance). Will it help or hurt if I close out my auto loan and one of the personal loans?

 

Also, a quick shoutout to this community for the wealth of information in these forums - it has helped me understand the credit and scoring in much more detail than I ever expected!

3 REPLIES 3
Anonymous
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Re: Mortgage score limits with one late payment

Bumping to check if anyone can help. Thanks!

Message 2 of 4
Anonymous
Not applicable

Re: Mortgage score limits with one late payment

1. I don't know what your maximum score potential would be, it is hard to determine that.

 

2. You should see a boost with AZEO even if utilization stays the same. Mortgage scores react more dramatically to the number of accounts with balances, so you should see some improvement with the number of accounts decreasing by 2. Your FICO 8 scores may not change, or could potentially decrease if you cross an individual card utilization threshold on your one account that reports (i.e. your 15% util card increases to over 30% util). As a side note, some people have found that their profiles respond positively to <5% aggregate revolving utilization. If you are trying to max your score and are financially able to do so, that should be a goal.

 

3. There seems to be some discrepancies and potentially misinformation on loans and how they affect your score. I believe the most proven metrics indicate that any installment loan (open or closed) will contribute to your account mix. Where the discrepancies come in is related to aggregate loan utilization. There is a well documented score boost that is received when aggregate loan utilization is <10%. Often times when a loan is paid off you will lose this score boost and people mistakenly attribute the resulting point loss to come from account mix changing, rather than the utilization metric. To determine if you might see a drop in score from paying off the loan we would need to know the original loan amounts for all of your open loans.

Message 3 of 4
babygirl1256
Senior Contributor

Re: Mortgage score limits with one late payment

@Anonymous Unfortunately BoA is the worst . . . I had a 2016 charge-off of $429.00 due to financial struggles of my DD having major medical issues and even after PIF they still wouldn't remove the item. I'm hoping for better results for your instance, especially relating to a mortgage. Don't give up . . . keep trying. E-mail the CEO/President for assistance . . . nothing beats a failure but a try!!!

Starting FICO 8 Score in 06/2019: EQ-625, TU-649, EX-640
Current FICO 8 Score in 06/2021: EQ-796, TU-806, EX-812
Goal FICO 8 Score in 06/2022: EQ-825, TU-850, EX-850
Message 4 of 4
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