Trying for a Mortgage ~ Need to Understand Utilization and how it will affect Mortgage Score

[ciadriamom]

Hello all!  I recently found and joined myFico Community after embarking on rebuilding my credit after a BK7.  (I am currently 3 years post discharge).  I am going to be house shopping in the very near future (next two to three months) and am trying to get my mortgage scores up to at least a 700 in order to qualify for the best interest rate (especially with the BK7).  I am waiting to do a myFico subscription because I just recenly paid several of my cards to a zero balance and want those to report.  Here is where I currently stand.

Reflex 493/1100

Capital One 161/600

Fingerhut 400/1700

Seventh Avenue 287/700

My Jewelers Club 68/5000

Indigo 0/300

Total Visa 0/300

Furst Access 0/300

Montgomery Ward 0/600

I just opened a Self Lender loan as I only had revolving credit.  This has not yet reported.

My Experian Fico 2 score is currently 662.  My Fico 8 scores are:  EX 637/TU 677/EQ 643.  I plan to pay off the CapOne, Seventh Avenue and My Jewelers Club in the next two weeks and pay down the Reflex to $318.

Is there any advice you can give me on getting the mortgage score to that 700 (+ would be better) number or am I delusional?  

[dragontears]

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@ciadriamom wrote:

Hello all!  I recently found and joined myFico Community after embarking on rebuilding my credit after a BK7.  (I am currently 3 years post discharge).  I am going to be house shopping in the very near future (next two to three months) and am trying to get my mortgage scores up to at least a 700 in order to qualify for the best interest rate (especially with the BK7).  I am waiting to do a myFico subscription because I just recenly paid several of my cards to a zero balance and want those to report.  Here is where I currently stand.

Reflex 493/1100

Capital One 161/600

Fingerhut 400/1700

Seventh Avenue 287/700

My Jewelers Club 68/5000

Indigo 0/300

Total Visa 0/300

Furst Access 0/300

Montgomery Ward 0/600

I just opened a Self Lender loan as I only had revolving credit.  This has not yet reported.

My Experian Fico 2 score is currently 662.  My Fico 8 scores are:  EX 637/TU 677/EQ 643.  I plan to pay off the CapOne, Seventh Avenue and My Jewelers Club in the next two weeks and pay down the Reflex to $318.

Is there any advice you can give me on getting the mortgage score to that 700 (+ would be better) number or am I delusional?  

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The more credit cards with a $0 balance the higher your mortgage scores will get. 

That being said at 3 years post BK you will not qualify for a conventional loan (unless you can show extenuating circumstances) and with FHA once you pass the minimum score requirements, a higher score will not get you a better rate. 

[Slabenstein]

Mortgage score want you to have the tiniest little babiest utilization you can, so the next thing would be to pay off Fingerhut as well and pay down Reflex.  Basically, you want to report a small balance on one bank card and have all other revolvers report $0.  I don't know whether it will get you all of the score jump you want, but it should help.

[ciadriamom]

@dragontears 

Thank you so much ~ any idea what the current FHA threshold is?

@Slabenstein 

Thank you so much ~ Will definitely work on paying off the Fingerhut (I should be able to by the end of November) and will keep making payments on the Reflex to decrease the balance.

[dragontears]

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@ciadriamom wrote:

@dragontears 

Thank you so much ~ any idea what the current FHA threshold is?

@Slabenstein 

Thank you so much ~ Will definitely work on paying off the Fingerhut (I should be able to by the end of November) and will keep making payments on the Reflex to decrease the balance.

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I think it is 620 but could be 640 (I can never remember which), you can get a FHA with lower scores but normally requires higher downpayment/rate and only a few lenders offer them.

This is assuming that you find a lender without overlays (don't go with big banks as they are notorious for having overlays).