I am writing this not to pat myself on the back but to give hope and encouragement to those trying to get their fico scores up to get a mortgage. My fico score was 569 June 30, 2007. I had just renewed our bridge loan on our house for 1 year which was due end of July, 2008 with no hope of renewal or extension from my friendly banker. I knew I had to do everything I could to get my credit scores up if I had any hope of getting a fixed mortgage loan.
We had almost $50,000 in CC, finance company, gas and department store credit debt and our utilization was 90%. Being self employed our income was severly effected by hurricane Katrina. But we had worked our way back to where we had extra income to start paying down our debts.
I decided to learn more about this credit score issue as I was told by banker I would have to get my credit score up if I had any hopes of getting a mortgage loan. So, I did the 30 day free trial from MyFico.
The first thing I did was to put together a spread sheet and wrote down all the accounts, balance, interest rate paying, minimum payment and CL. After putting everything down on paper, we could analyze which debt we needed to pay as much as we could to. Of course it was a no brainer to pay off finance company loans first which had interest rates of over 30%. I then started calling every credit card company to see if they would reduce our interest rates. Most all did except for Chase...(nice people, right!). If a credit card company wouldn't lower interest rates, I then asked if they would increase our credit limit. (Hint: Ask to speak to supervisors)Don't believe that they can't change your interest rates every month because I got one credit card company to lower my interest rates each month and they lowered it from 30% to 10.99% by increments of 2-3% each month. We had a plan and stuck to it.
One year later, I am proud to report my credit score is 684, I got the fixed mortgage loan and our minimum monthly payments have dropped by 64%. Our utilization on CC is under 20% and I feel like the weight of the world has been lifted from my shoulders. When I read other people's posts, I know what you are going through.
I encourage those of you who are going through some tough times to get a plan, stick to it and keep the faith. Things will get better.
Message Edited by Madison on
07-30-2008 12:07 PM
EQ 817, EX 815, TU 813 (Updated 1/5/18: TU 843