@ntickrs wrote:We're about to do a loan on a property that is a private mortgage, not a typical home loan. It's more of a business type loan, and for a variety of reasons, this is the only option. They are checking my personal credit and that's the issue -- I need a middle score of at least 720, and really would like 740 ... and I need to do it right now. I can have have them re-pull my credit for an update about 10-15 days from now.
Currently, my Score 8: Equifax 714, TransUnion 732, and Experian 740
but my Score 5, 4 & 2 are: Equifax 705, TransUnion 743, and Experian 700
The issue is entirely that I have some personal cards that the business pays for, but that carry high balances, and have for a while now. (Yes, I get why this is a problem, but first things first). Everything else on my credit is awesome -- long history, nothing new, nothing bad. Because of COVID SBA loans, there's inqueries -- but there's nothing I can do about that.
Because this is complex, some real data.
Card | Balance | Limit | Utilization
Amex | $ 1,049 | $ 35,000 | 3%
Citi | $ 305 | $ 2,560 | 12%
Amex | $ 3,021 | $ 4,000 | 76%
Citi Costco | $ 47,955 | $ 48,300 | 99%
Citi Silver | $ 62,207 | $ 63,000 | 99%
Discover | $ 19,995 | $ 20,500 | 98%
Chase | $ 7,719 | $ 8,000 | 96%
Chase | $ 19,622 | $ 20,100 | 98%
Wells Fargo | $ 0 | $ 1,000 | 0%
Wells Fargo | $ 0 | $ 7,000 | 0%I've got just under $35k to play with that I can pay some of these down. I'll get both Amex to near zero, as well as the small Citi. Should these be higher than $0? Am I understanding right that these should they be $50-99 balances?
Then, I'm thinking that I should pay the $7719 down to $0 -- but maybe it should be down to $50? And, then to spread the rest on the two larger Citi cards so that that they come to 75-79% utilization.
When I do that in the myFico simulator, which is obviously Score 8, shows a change of Equifax +35, TransUnion +25, and Experian +10 ... how will this translate to Fico 5, 4 & 2?
Any other ideas of how to get my middle score almost immediately to at least 720, and hopefully 740?
Thanks!
Anything over 89% is considered maxed out and its killing you big time. Spread the $ out and get those down (In Red) as far as you can by splitting up the money. Even at 68% or below is the next threshold for gains. The 76% isnt maxed. Real close. But those 99's have got to go down. Forget simulators. They are never accuarate. Good Luck!
@ntickrs wrote:@FireMedic1 Super helpful -- thank you very much.
Follow on questions, if you don't mind.
@FireMedic1 has given you great advice. I'll add a little here.
1) Sounds like thresholds are: 89% and below, and 68% and below. Is there any real difference between 68-89%? (e.g., more thresholds?)
If you're able to get to under 69.5% so it's not rounded up to 70%, there's definitely a scoring threshold there. Statement from the Primer below:
ii. The major recognized Individual revolving utilization thresholds are believed to occur at 30%, 50%, 70%, 90%, and 100% (Some scorecards may also have lower thresholds.)
2) For those that have $0, is it better to have $50 balance on them?
No. The mortgage scores are incredibly sensitive to the Accounts With Balances (AWB) metric. You want as few accounts with any reported balance at all for higher mortgage scores. AZEO is the best case, but that's obviously not possible in your case, so as many as you can get to $0 is best.
3) The loan app is approved already, but they will do an additional pull right before close, and that will be where our mortgage pricing is set. Is it true that we can ask the credit card companies to update on demand to report earlier to the credit bureaus than the normal schedule?
You can certainly ask, but YMMV with each individual lender. Some (like Discover) are very good to report off-cycle when you ask. Others are not so great, but all they can do is say no. It may help to ask for a supervisor, get past the front line reps, explain your situation, and see if you can get an off-cycle report for those that are stubborn about it,
4) Are there similar % thresholds for TOTAL revolving debt that could make a big difference to strive for (i.e., ones like the 89% and 68%)?
Yes. There are scoring metrics for both aggregate (overall) and individual revolving utilization. The biggest score loss is believed to occur at the 30% threshold, but if you can get your aggregate down below any of the thresholds, you may see a score increase. Again, pasting info from the Primer below:i. The major recognized Aggregate revolving utilization thresholds are believed to occur at 5%, 10%, 30%, 50%, 70%, 90%, and 100% (It's possible some scorecards could also have other thresholds.)Thanks!
@SoonerSoldier33 wrote:
@ntickrs wrote:@FireMedic1 Super helpful -- thank you very much.
Follow on questions, if you don't mind.
@FireMedic1 has given you great advice. I'll add a little here.
+1 on that
1) Sounds like thresholds are: 89% and below, and 68% and below. Is there any real difference between 68-89%? (e.g., more thresholds?)
If you're able to get to under 69.5% so it's not rounded up to 70%, there's definitely a scoring threshold there. Statement from the Primer below:
ii. The major recognized Individual revolving utilization thresholds are believed to occur at 30%, 50%, 70%, 90%, and 100% (Some scorecards may also have lower thresholds.)
2) For those that have $0, is it better to have $50 balance on them?
No. The mortgage scores are incredibly sensitive to the Accounts With Balances (AWB) metric. You want as few accounts with any reported balance at all for higher mortgage scores. AZEO is the best case, but that's obviously not possible in your case, so as many as you can get to $0 is best.
^^^^^^^^^^^
This! I was sooooo gonna comment the same thing. The FICO 5/4/2 scores seem to be EXTREMELY sensitive to recent activity (Inquiries and Accounts) in the 12 months prior to the loan and to Accounts with Balances. So, AZEO is REALLY "important" (I put important in quotes as that is going to depend on what your goals are....). Also, with respect to AZEO just keep in mind that - generally speaking - you have a chance for AZEO each and every month! There is no memory, as they say, in AZEO. :-)
3) The loan app is approved already, but they will do an additional pull right before close, and that will be where our mortgage pricing is set. Is it true that we can ask the credit card companies to update on demand to report earlier to the credit bureaus than the normal schedule?
You can certainly ask, but YMMV with each individual lender. Some (like Discover) are very good to report off-cycle when you ask. Others are not so great, but all they can do is say no. It may help to ask for a supervisor, get past the front line reps, explain your situation, and see if you can get an off-cycle report for those that are stubborn about it,
4) Are there similar % thresholds for TOTAL revolving debt that could make a big difference to strive for (i.e., ones like the 89% and 68%)?
Yes. There are scoring metrics for both aggregate (overall) and individual revolving utilization. The biggest score loss is believed to occur at the 30% threshold, but if you can get your aggregate down below any of the thresholds, you may see a score increase. Again, pasting info from the Primer below:i. The major recognized Aggregate revolving utilization thresholds are believed to occur at 5%, 10%, 30%, 50%, 70%, 90%, and 100% (It's possible some scorecards could also have other thresholds.)Thanks!
Starting Score: Exp 627
@ntickrs wrote:We're about to do a loan on a property that is a private mortgage, not a typical home loan. It's more of a business type loan, and for a variety of reasons, this is the only option. They are checking my personal credit and that's the issue -- I need a middle score of at least 720, and really would like 740 ... and I need to do it right now. I can have have them re-pull my credit for an update about 10-15 days from now.
Currently, my Score 8: Equifax 714, TransUnion 732, and Experian 740
but my Score 5, 4 & 2 are: Equifax 705, TransUnion 743, and Experian 700
The issue is entirely that I have some personal cards that the business pays for, but that carry high balances, and have for a while now. (Yes, I get why this is a problem, but first things first). Everything else on my credit is awesome -- long history, nothing new, nothing bad. Because of COVID SBA loans, there's inqueries -- but there's nothing I can do about that.
First question:
When I do that in the myFico simulator, which is obviously Score 8, shows a change of Equifax +35, TransUnion +25, and Experian +10 ... how will this translate to Fico 5, 4 & 2?
Because this is complex, some real data. There are ten credit cards:
Card Balance Limit Utilization
Card 01 $1,049 $35,000 3%
Card 02 $305 $2,560 12%
Card 03 $3,021 $4,000 76%
Card 04 $47,955 $48,300 99%
Card 05 $62,207 $63,000 99%
Card 06 $19,995 $20,500 98%
Card 07 $7,719 $8,000 96%
Card 08 $19,622 $20,100 98%
Card 09 $0 $1,000 0%
Card 10 $0 $7,000 0%
We've got just under $35k to play with that I can pay some of these down. We'll get both Cards 01 and 03 to near zero, as well as Card 02.
Second question:
Should these be $0 or higher than $0?
Am I understanding right that these should they be $50-99 balances?
Third Question:
I'm thinking that I should pay Card 07 down to $0, and then to spread the rest on the two larger ones (Cards 04 and 05) bringing them down to about 75-79% utilization. Better to do this? Or to focus on just one of them, or to pay off the Card 08 bringing it to 0?
In other words, what is more important -- number of cards with high utilization? Or total % utilization of all combined? Or getting more cards down from 98-99% down to say 75-79%?
What works best?
Any other ideas of how to get my middle score almost immediately to at least 720, and hopefully 740?
Thanks!
I did a little math for you and you can get the number of accounts reporting $0 as the balance down to five (so, half of them) and get the other five down to 85% if you do something similar to the below:
Chase 20,000 --------> 17,000 (so, pay at least 2,622) ------- so, 85% of $20,000 is $17,000
Chase 8,000 --------> 6,800 (so, pay at least 919)
Discover 20,500 --------> 17,425 (so, pay at least 2,570)
Citi Silver 63,000 --------> 53,550 (so, pay at least 8,657)
Citi Costco 48,300 --------> 41,055 (so pay at least 6,900)
Amex 35,000 pay down to $0
Amex 4,000 pay down to $0
Citi 2,560 pay down to $0
The above takes roughly $25,000.
So you would have some $10,000 remaining. You could, with that remaining $10,000, pay down to $0 the Chase with the $8,000 Credit Limit.
That would bring you down to six accounts reporting a $0 balance. And you have roughly $3,000 remaining.
The four reporting a balance are all at 85% Utilization. I picked that 85% not so randomly. 89% is the "barrier". I wanted to be a bit below that, so that there is less a likelihood of "rounding issues" and so that you would use the least amount of your available resources. We could have also gone with 86%....I just like round numbers (and '85' is round, to my brain).
The next "barrier" is at 69%, right? We have $3,000 (again, roughly) remaining. Can we bring those 85% utilized cards down below the next "barrier"?
Chase 20,000 --------> 13,000 so, 65% of $20,000 is $13,000
Discover 20,500 --------> 13,325
Citi Silver 63,000 --------> 40,940
Citi Costco 48,300 --------> 31,395
So, does not look like we can get any of the four accounts listed above below the next "barrier". Close....kinda, on either the Chase with the $20,000 Credit Limit or the Discover with the $20,500 Credit Limit. And maybe if you did things a bit tighter (used 88% and 68% instead of my 85% and 65%)??????
So, four accounts reporting a balance. 40% of your accounts reporting a balance is much much better than 80%! How much better? You - should you do something similar - will find out! :-)
I think the hard part is going to be to get waiting for the payments to clear, getting the CC companies to report off cycle, and have the CB's update your score all in less than 2 weeks. Best of luck!
@ntickrs wrote:We're about to do a loan on a property that is a private mortgage, not a typical home loan. It's more of a business type loan, and for a variety of reasons, this is the only option. They are checking my personal credit and that's the issue -- I need a middle score of at least 720, and really would like 740 ... and I need to do it right now. I can have have them re-pull my credit for an update about 10-15 days from now.
Currently, my Score 8: Equifax 714, TransUnion 732, and Experian 740
but my Score 5, 4 & 2 are: Equifax 705, TransUnion 743, and Experian 700
The issue is entirely that I have some personal cards that the business pays for, but that carry high balances, and have for a while now. (Yes, I get why this is a problem, but first things first). Everything else on my credit is awesome -- long history, nothing new, nothing bad. Because of COVID SBA loans, there's inqueries -- but there's nothing I can do about that.
Because this is complex, some real data.
Card | Balance | Limit | Utilization
Amex | $ 1,049 | $ 35,000 | 3%
Citi | $ 305 | $ 2,560 | 12%
Amex | $ 3,021 | $ 4,000 | 76%
Citi Costco | $ 47,955 | $ 48,300 | 99%
Citi Silver | $ 62,207 | $ 63,000 | 99%
Discover | $ 19,995 | $ 20,500 | 98%
Chase | $ 7,719 | $ 8,000 | 96%
Chase | $ 19,622 | $ 20,100 | 98%
Wells Fargo | $ 0 | $ 1,000 | 0%
Wells Fargo | $ 0 | $ 7,000 | 0%I've got just under $35k to play with that I can pay some of these down. I'll get both Amex to near zero, as well as the small Citi. Should these be higher than $0? Am I understanding right that these should they be $50-99 balances?
Then, I'm thinking that I should pay the $7719 down to $0 -- but maybe it should be down to $50? And, then to spread the rest on the two larger Citi cards so that that they come to 75-79% utilization.
When I do that in the myFico simulator, which is obviously Score 8, shows a change of Equifax +35, TransUnion +25, and Experian +10 ... how will this translate to Fico 5, 4 & 2?
Any other ideas of how to get my middle score almost immediately to at least 720, and hopefully 740?
Thanks!
1. Your idea of leaving small balances rather than zero balances is the exact opposite of what you should be doing. The mortgage scores love zero balances. So if you're paying down, pay to zero. Pay extra, so the interest won't show up as the reported balance.
2. I have discovered that the mortgage scores are even more sensitive to the NUMBER of revolving accounts with balances of 50% or more.
So bottom line:
get all high utilization balances down to 48% or less
pay anything you can down to zero, and be sure to pay extra so trailing interest doesn't spoil the zero balance
