@dcg9381 wrote:
What kind of home purchase are you anticipating? Almost all mortgage lenders look for a 740 to get best rates on the mortgage itself, and 760 for best rates on PMI. Who is telling you that you need an 800?
I'm actually building a custom home, which will be one of a construction to perm financing or construction fiancing and then re-fi to perm. Jumbo. 30-year most likely.
No one is telling me that I "need" an 800, but I assume that "most favorable" term tier is somewhere in that range of 800+, perhaps I'm wrong.
You are likely to be mistaken. I would contact a few different mortgage lenders and ask them what FICO scores they look for in a person they would give best rates to. Explain that it would likely be a jumbo, along with other qualifications you just gave. Almost none of them will say that they look for someone with an 800+ when determining best rates.
For example, in this piece on jumbo loans, the author mertions a score of 720 to get best rates. I personally think that may be lowballing it (as I mentioned before 740 is safer with 760 for best rates on PMI). When you talk with the lenders, be sure not to give them your social or they will pull your credit, resulting in a hard iqnuiry, which you do not want.
Since your home purchase is expected to be very soon, the best step is for you to sign up for the myFICO Ultimate $40/mo package. You will get a detailed 3-bureau report.
I believe I'm entitled to one "free" yearly report per agency, correct?
Indeed you are. That report comes from annualCreditReport.com. There are no credit scores that come with it, however. Moreover, the only place to get one's mortgage scores, which are different from other scores, is myFICO. You can of course go to a mortgage lender, give them your social, and then have them pull your scores -- for free. But it will cause a hard inquiry to appear on your reports, which you do not want until you are ready to buy.
As the regulars on here know, I rarely encourage people to buy the myFICO product, since long term it is costly. But in your case you need to know what your mortgage scores are. If you think you will not be taking out the loan for several more months, you can work on getting your reports in perfect shape and then pull the scores.
We can help you better if you list all your revolving accounts with the balance and credit limit as they appear on your reports.
I can do that - and will double check - but I've really only kept 2 open revolving credit lines:
Line A, $8000 balance, 0% fixed $17,900 Limit, AGE 9 months
Line B, $0 balance, 15% APR, $25,000 limit, AGE 12 years
How about re-balancing that debt between the two credit lines to show utilization under 30%?
How about upping the limit on the $17,900 line?
Rebalancing the debt will harm your mortgage scores. You want all cards at $0 except one. The mortgage models like that a lot. Since you only have two cards, that's one reporting $0 and one not.
Based on what you said earlier, I doubt your other card has a $0 balance. You mentioned that you pay the statement in full. That likely means that the card has reported a positive balance. Until you pull your reports you will not know. You should get some tools that enable you to frequently pull your reports. There are some that are free, though you will at some point need your mortgage scores (not the same thing as reports).
Raising your $17k credit imit is not a bad idea, though you would have to be certain you could do that without a hard pull. CLI (creditr limit increase) requests can often result in hard inquiries.
Regardless you want both cards at a utilization of less than 28.9% (each card considered by itself) and a total utilization less than 8.9%.
Your steps moving forward is to consult with several mortgage lenders and ask what scores they look for to get best rates. then pull your current mortgage scores and reports. Then develop a plan to achieve the necessary scores (you may already have them). Assume that your mortgage scores are much less than 791 until you have pulled your true mortgage scores at myFICO.
I can pay down the $8,000 balance. However, I'm also "conserving cash" for the home purchase - I need to be able to show cash on hand to close, etc. And it's "close" on the cash side.
Obtaining a minor installment loan and then paying off most but not all of it is called the Share Secured Loan Technique. I would not advise it given that you are preparing for a mortgage and you have little time. Paying down your CC debt is the way to go.
