Perfect 850 score question

[ohjoy]

Is it possible to have a perfect 850 without a mortgage on your credit? If not, if there a minimum mortgage amount? Strategizing over here. I notice CK keeps mentioning my lack of a mortgage being a factor. Or are they saying that so that they can recommend a vendor? Thanks.

[SouthJamaica]

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@ohjoy wrote:

Is it possible to have a perfect 850 without a mortgage on your credit? If not, if there a minimum mortgage amount? Strategizing over here. I notice CK keeps mentioning my lack of a mortgage being a factor. Or are they saying that so that they can recommend a vendor? Thanks.

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CK's advice and recommendations are completely meaningless. Disregard.

As to whether you can have an 850 without a mortgage, I personally don't think you can, but according to MyFICO's simulator (which I don't believe) you can.

[Anonymous]

850 without a mortgage is doable, but will take a lot of work and discipline.  

Are you trying to accomplish that? where do you stand now? What cards/balance/CLs do you currently have? other loans? etc.

[ohjoy]

850 without a mortgage is doable, but will take a lot of work and discipline.  

Are you trying to accomplish that? where do you stand now? What cards/balance/CLs do you currently have? other loans? etc.

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Yeeeeuuuhhh... That's overall goal. Right now I'm just  trying to make it to 760. My scores in my siggy dropped because I bought my daughter a car, dealer hit me with a zillion inq (15), and I ran my credit card balances up to pay a lawyer (divorce stuff). So my scores are currently 676 (EQ), 712 (TU) 658 (EX). Seriously, I expected it to be worse. I hope to see a rebound once my scores update in September. 

NF Sig Cash Rewards $1373 bal /$7,000 limit ----paying down to $490 (7%) 

NavCheck $0 /$15,000

AU Cap One $657 /$4000 (My brother's acct. going to ask him to request CLI or pay on the card)

Cap one $474 /500 ---> paying this to 0 

Discover $193 /200 ---> paying this to 0

Credit One $500 /550 --> paying this to 0

VicSec $0 /$250

Epress $0 /$500

NYC $0 /500

Buckle $0 /$250

MyJeweler Club $0 /$5000

Ulta $35 /$750 ----paying this to 0

(Total revolving limits $19,500)

NF Pledge Loan $377/$501

NF Auto Loan $13,256/13,302 (just bought this July4)

My credit is fairly new

AAoA <1 yr

AoOa 5.3 yr

Being added as AU on 15 yr account today

1 baddie (Midland funding) drops off 9/1 (EX), 1/1 (EQ) already off TU

Looking for anything else that I can do to maximize points. Do you see anything? 

[Anonymous]

Not bad, not bad.  

Next time, i would sugggest going to a CU for a car loan.  Dealerships will always run up HPs for approvals 

You should see your scores go up as your balances decrease.  Your AAOA looks good as well, i would not get anymore CCs for now.  When you can, you should start workig on CLIs on your cards.

[Anonymous]

I would think an 850 score would be perfectly possible without a mortgage.  You'd definitely need an installment loan paid down to under 9%, but as long as all other factors are maximized (1% util, AAoA 8+ years, AoOA 15+ years, AoYA > 1 year, zero inquiries, etc) I would think 850 would be attainable.

[Anonymous]

Welcome to the forums, OhJoy.  :-)

Credit questions can be broadly divided into theoretical and practical.  Theoretical questions are asked purely for the sake of being a credit score hobbyist.  You don't actually need to know the answer, it won't help you do or achieve anything important to your finances, etc. -- the hobbyist asks because he is purely interested (in a geeky way) at guessing the abstract workings of the scoring algorithms.  Practical questions are asked because you need to raise your score so you can do something: get approved for a car loan, get better rates on PMI, etc.

The question about whether some of FICO's models might give you some small benefit for having a mortgage, such that without such a mortgage you could only get up to (say) an 845 -- this is a theoretical question.  It has no practical importance, because nobody needs an 850.  Lenders stop caring what your score is once it is over 780.  (Arguably 760.)

It sounds like you are much more interested in the practical nuts and bolts of how to achieve a 760.  If so, forget about buying a house as a credit score raising strategy.  That would be a terrible idea.  Only buy a house because you want that house.  Actually, getting a mortgage will typically lower your FICO 8 and FICO 9 scores for the first decade or so -- or as long as it takes to pay a significant chunk of it off.  That's as compared with having a single small loan that is mostly but not entirely paid off.

As far as improving your score, the only thing you need to do is get the derogs off and wait.  And of course keep making payments on time on your loans.  Should you end up with a huge amount of extra cash (a relative dies and leaves you 12k)  you can improve your score by paying your loans down but still keeping them open for the full term.

One thing you should not do (if you want to improve your score) is open more cards.  Also avoid any CLI requests that could result  in hard pulls.  You have plenty of cards and increasing your credit limits will not help your score.

[ohjoy]

Not bad, not bad.  

Next time, i would sugggest going to a CU for a car loan.  Dealerships will always run up HPs for approvals 

You should see your scores go up as your balances decrease.  Your AAOA looks good as well, i would not get anymore CCs for now.  When you can, you should start workig on CLIs on your cards.

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I knew better. I actually did end up getting a NFCU auto loan and went in saying so. I let the manager convince me to give him the chance to get a lower rate with ONE HP....from them, apparently. Got me! 

Thanks for the feedback! 

[ohjoy]

I would think an 850 score would be perfectly possible without a mortgage.  You'd definitely need an installment loan paid down to under 9%, but as long as all other factors are maximized (1% util, AAoA 8+ years, AoOA 15+ years, AoYA > 1 year, zero inquiries, etc) I would think 850 would be attainable

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AN installment loan? Meaning, paying down my small one to under 9% would help? Or must it be the auto loan? TIA

[Anonymous]

The thing that needs to get down to under 9% is something we'll call "installment utilization" -- for a lack of a better phrase.  It is a lot like credit card utilization, but it applies solely to installment debt, rather than revolving debt.

That factor measures how much of your existing open installment debt you have paid off.  Here's how that factor works.  You take all your current open installment loans (only the open ones -- ignoring all closed loans).  You then add up all the amount you currently owe.  Call that CURRENT.  Then you add up the amounts that the loans were originally for.  Call that ORIGINAL.  Then you divide CURRENT by ORIGINAL and you get a percent.  (Do you see how that is a lot like the credit card utilization calculation?)  When that % is close to 100, or if you don't have any open loans at all, then you get no FICO points from this factor.  But when the % is very low (say 1-9%) then you get most or all of the points from this factor.

So in your case you'd need to pay down the car a great deal, since that is part of your total open debt.

The total number of points you might expect to get from going from a total installment utilization of > 91% (where you are now) to < 9% would be about 30 points.

This is why I said, in my earlier reply to you, that if you get a big windfall of cash (12-13k), you'd benefit from paying down your loans but keeping them open.