Need help optimizing credit scores for mortgage

[jg1983]

Now that I thought I had a plan thanks to you guys I just checked my credit and my Amazon card erroneously reported me as 30 days late and my score tanked. I was one day late because i forgot to hit the confirm payment button when making my payment. I made the payment the next day along with the late fee. What is the best way to deal with this? If I can't get it straightened out does that change my plan for paying down my cards? Is this going to be a deal breaker for a mortgage? I'm gonna try calling them after work and see if anything can be done.

[jg1983]

Ok the situation is a little more clear to me now. My reports on credit karma were saying 30 days late then for status and most time ever late it said "current" for both EQ and TU. I checked credit check total and it is showing as 30 days late (with my balance before my most recent payment) on TU. On the other two it shows 100% on time payments with the most recent payment reported. Must be an error. Hopefully it is easy to get fixed. That is why my TU score tanked. Everything looks good on EQ. On EX I have a new collections account which caused my score to tank. Not a big deal. They are trying to claim my wife had a chest xray when she was 6 months pregnant and the clinic they claim she had it done at says they have no records of her being a paitient. I sent them a validation letter and they never replied. This was 3 months ago. They must see I applied for a mortgage and like vultures decided now is the time to report. A tort letter with a federal civil complaint attached should fix that one. I might even get a settlement out of this like the last time a collection agency pulled something similar and I walked away with $2k and my credit reports fixed. I know how to deal with the collections account. Hopefully the 30 day late payment can be fixed with a phone call. If not maybe a dispute to TU will fix it. Any other ideas?

[jg1983]

Just got a credit monitoring email saying an account has been updated from derogatory to current. I checked my credit report and sure enough my TU report is showing my Amazon card as 100% on time payments. I guess they corrected the mistake without me even having to call them. So now all I have to deal with is the vulture collection agency and I can move forward with the payment plan you guys have provided for me.

[DollyLama]

Glad that is one less thing to have to deal with at the present. I agree with Heaven's reply in paying creditors. In my journey, yes utilization plays a factor, but mortgage scores do react to too many accounts reporting a balance.

When you add your spouse as an authorized user, as told that one of your oldest cards, but make it a bank card and not a retail store card. She will generate a FICO score at the card's next reporting, and not have to wait another 3 mos on the loan. 

Best of luck!

[jg1983]

A few of my older cards were issued around the same time. Does it matter which one I add my wife to? Does it matter what the credit limit is?

[Anonymous]

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@jg1983 wrote:
These balances are a close approximation.

DCU: $1000/$1000   pay off
Navy Federal: $1500/$1600    pay off
Chase: $500/$500   pay off
Mattress Firm: $300/$2500
Amazon Store card: $800/$800   pay off
Capital One: $400/$500 pay $100 a month
CO platinum: $0/$300
Walmart: $0/$300

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Based on this and your minimal savings for the trip, I would suggest putting off a Mortgage for a while longer. You really are close to being maxed out, and being that close for too long is likely to make the Banks skittish. I would recommend paying off all above except Mattress Firm and Cap one. Then start saving everything and anything you can for a Down payment. All while paying Cap One mroe than the minimums.

But still, that isn't going to help much with DTI. CC payments are rather small compared to Car payments, Loan payments and back Taxes etc. That's where you're really taking the hit.

Navy $125 pay off

NF CLOC $100 pay off

CU #3 $180 

Taxes $150

Car $???

Total $330 + Car $??  + Mattress $50  

^ This will create a lower DTI. So you've got a busy year to bring all this down. And depending on what you pay for rent, any disposable income should go towards this goal. Once that happens it will be easier to save more Money for a House without paying all that interest.

[jg1983]

I see multiple plans here and I'm not sure which one to follow. I'm leaning towards heavenohios plan. However I would like to pay the DCU card to zero and add my wife to it because it's my oldest. Any advice on this is appreciated.

[jg1983]

Here is a screenshot of a spreadsheet I put together to calculate utilization and the amount to pay for each card. Before I had estimates of what I thought were my balances. In the spreadsheet I used the exact numbers. Do you guys think I am on the right track here or would you adjust some things? I chose to pay the DCU card to zero because it is my oldest card and I can add my wife to it. Looks like I will be a little over 13% over all utilization. Below 10% is the target correct? If that is the case I may be able to squeeze a little more money out of my budget to hit 10%. Regardless going from 60% to 13% should give my scores a decent boost correct? It is encouraging to know I will be less than $1000 from paying off all my credit cards.

[Anonymous]

From what i can see you are on the right track for your mortgage. I would say to keep working on getting that utilization number down.

We are three years into our FHA loan through homebridge financial. No its not the best loan, but it got us into our home here is South Florida and we love it.

Keep at it bud. It will be worth it in the end.

[HeavenOhio]

Good work, @jg1983. Those new numbers will give your report a much prettier look.

Note that "below 10%" actually means 8.9% or below. That's because all fractions round up. 9.000000001% rounds up to 10% and is no longer "below 10%."

Now that all cards are below 28.9%, you should start bringing cards to zero, starting with the smallest balance first. If you can reach the ideal, exactly one card would be reporting a non-zero balance.