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We just found out our credit score has been dinged good for credit card debt from medical bills.. We need to sell and get a new mortgage ASAP and after pulliing our credit report our score is down to 675, and we are looking to get it up quick. This is what we have as far as debt is concerned and we have 13,000 to play with to pay some off or one down and was wondering which pay off would get the score up the highest. We were thinking to put 1800 on the 10,000 credit limit and pay 10,000 on the 13,000 credit limit one, and then we have 1000 left to pay one of the smaller one's? Also, does your score go up the same day they report payments to the credit bureau?
Owing - 10678.93 Credit Limit 13,000
Owing - 16529.91 Credit Limit 17,000
Owing - 9694 Credit Limit 10,000
Owing 940 Credit Limit 3300
Owing 849 Credit Limit 5000
Appreciate all your input. Thanks!
My vote is to pay the smaller balances first. FICO likes $0 balances (just not all $0 balances). I'd pay off the bottom 3 and put the rest towards the $16k balance CC because that's reading closed to max.
CC companies typically report the balance you had on the statement date and will report that balance inside a few days of that statement date.
Thanks so much for the advice. I meant to ask also how many points that would raise the FICO score?
@Anonymous wrote:Thanks so much for the advice. I meant to ask also how many points that would raise the FICO score?
There really is no way to make a prediction.
With scores in the upper 600's as you quoted you should have no real issues obtaining a mortgage depending if you have any negative activity that is fairly recent. The only other issue would be your DTI.
If none of those are issues then I do not see IMO any reason why you couldn't be approved for a mortgage.
Yes you're right we could get approved for a mortgage but when it's under 680 you get hit with a way higher PMI if we dont end up with the 20% and higher interest. If we can get it to 680+ it drops PMI and we get a better interest rate is all. I'm sure if we paid those we would get it over 680 no? Thanks!
@Anonymous wrote:Yes you're right we could get approved for a mortgage but when it's under 680 you get hit with a way higher PMI if we dont end up with the 20% and higher interest. If we can get it to 680+ it drops PMI and we get a better interest rate is all. I'm sure if we paid those we would get it over 680 no? Thanks!
Yes I believe you will break the 680 if pay down the CC debt.
More and more I see people worry about PMI and the cost. While you may save a few dollars the stress to save that $5 in my opinion really isn't worth it, if you even save anything at all. As far as the rates go it depends on what type of loan you try and apply for.
Really, I was told PMI would be about 100/mth and would jump to 230/mth if under 680, so it's quite a bit more a mth to cover them!
@Anonymous wrote:Really, I was told PMI would be about 100/mth and would jump to 230/mth if under 680, so it's quite a bit more a mth to cover them!
Those numbers change depending on lending institution.
For example (and these are real numbers);
My DD home purchase end of last year PMI is 131 a month.... her middle credit score was 671
My DS home purchase last summer PMI is 147 a month..... his middle credit score was 709
My friend home purchase end of last year PMI is 124 a month ....... his middle score was 690
It really depends on who the lender is what there rates are, and the price of the mortgage.....
@llecs wrote:My vote is to pay the smaller balances first. FICO likes $0 balances (just not all $0 balances). I'd pay off the bottom 3 and put the rest towards the $16k balance CC because that's reading closed to max.
CC companies typically report the balance you had on the statement date and will report that balance inside a few days of that statement date.
+1 - No matter how you slice and dice it, llecs' suggestion will probably have the best impact on your score (as well as fewer active payments to make, ongoing).
Thanks again everyone. Now I just realized the credit bureaus have changed their rating system to Vantage scores, so the 675 I mentioned is the Vantage scoreright from all 3 bureaus or are any FICO? How will that affect us with the FICO score? Does that mean it will be even lower if I pulled that?