I am currently going through the mortgage process for a house that is being built. It looks that the home will be completed in mid-March and my lender has given me a conditional mortgage approval based on my credit score reaching 700 and qualifying for PMI. The mortgage amount qualifies as jumbo so a minimum credit score of 700 is necessary for PMI on a loan of this size. As of now my TU score is 702, my EX score is 692 and my EQ is 684. I recently had the only collection account on my report removed. My current reports include the following:
- I have 15 revolving accounts, my total utilization is 5%. I have 3 accounts with reported balances
- Card 1 is 4% utilization
- Card 2 is 9% utilization
- Card 3 is 31% utilization
- I have student loans in excess of $100k with no late payments (grad school was VERY expensive)
- 12 year credit history, average age of my accounts is just over 4 years
- No late payments in 3 years and 7 months. Worst late is 90 days but that was over 4 years ago
- I have about 8 hard inquiries in the last year, most of these are from my lender. They have been pulling my credit report every 60 days to maintain a fresh report. The house has been under construction since October.The last hard inquiry was January 22nd. I know they will need to pull my report one more time before they can finalize my application.
I need to get my middle score to 700 to get this deal done. So given the above what else can I do to get my score the 8 points I need? Any advice would be GREATLY appreciated!
Starting Score: FICO TU 503 FICO EX 470 FICO EQ 498
@AndySoCal wrote:Keep in mind for a mortgage loan the lender is using the midde score. Ie not the highest score or the lowest score. Has collection account still on your credit report that the lender pulled last ? Is the late payment reporting to a bureau or a multiple bureaus.? I would ask the lender for a copy of the credit report and look at the score reasons . The score reasons are in order if impact. Check to see if your credit utilization is affecting your score . Those are a few ideas to help you get to where you want to be.
Thanks for your response! So the last time the lender pulled my report was Jan 22nd and the score listed on the report was 686. Ironically that was about 5 points higher than my highest score showed on MyFico at the same time (I pulled my 3 reports the day before to get an idea of where I was). I'm not sure why but it was mildly encouraging. It makes me think they are doing some sort of blended score. At the time the collection was reporting on all 3 reports and an old unpaid utility was reporting only on Experian. When I said that my last late was 3 years 7 months ago that may have been misleading because it might have made it sound like it was only one. I have a 4 closed and paid in full accounts that had a history of late payments. The most late I ever was was 90+ days and it was in 2008. That said I have a slew of 30 days late over a period of 6 months from 2008-2009 and 2 single 30 day lates in March and April of 2010. They did send me a letter with the score reasons they were:
- Serious delinquency and public record or collection filed
- Proportion of loan balances ot loan amounts is too high
- Length of time accounts have been established
- Too many inquiries last 12 months
As I mentioned all as of yesterday the collection has been removed from all 3 bureaus and the old unpaid utility account has been deleted from Experian which is the only report that it was on. There isn't much I can do about the other 3 reasons. My student loans are what they are, I pay close to $1000 a month on those alone. I have been rebuilding my credit so I can't do much about the age of my accounts and the inquiries are really only a result of the mortgage process. Isn't there anything I can do to get a few extra points? Of the 3 revolving accounts that are showing a balance I have paid 2 of them down to $0 and have brought the final account down to 9% utilization, but those 3 actions won't update to the CRAs until later this month.
@notfancy wrote:Other than what you did here, try goodwilling that 90 day late. Also, as your lender if you should try to consolidate the student loans so that you don't have multiple minimum payments affecting your DTI. He might tell you it is a bad idea to open another tradeline or get more inquiries though. Either way, I'm always all for exploring all of your options to save money, improve your score, and make bill paying easier.
Thanks! I have attempted to GW the 90 days late on multiple occasions but have had no success. As far as the student loans I have two seperate payment one is my federal consolidated the other is my private loans, the two can not be consolidated together. It's not that important though because even with them my DTI is only 8%. The scores are the issue with my lender, my DTI is well below the maximum, even with the mortgage payment it's only 25% and I have 9 months of liquid reserves. They literally have no flexibilty on the scores, the system does not allow PMI for a score under 700 so that's why I'm so focused on getting my middle score there. Hopefully the actions I've taken will get me there.
@shanao621 wrote:
@notfancy wrote:Other than what you did here, try goodwilling that 90 day late. Also, as your lender if you should try to consolidate the student loans so that you don't have multiple minimum payments affecting your DTI. He might tell you it is a bad idea to open another tradeline or get more inquiries though. Either way, I'm always all for exploring all of your options to save money, improve your score, and make bill paying easier.
Thanks! I have attempted to GW the 90 days late on multiple occasions but have had no success. As far as the student loans I have two seperate payment one is my federal consolidated the other is my private loans, the two can not be consolidated together. It's not that important though because even with them my DTI is only 8%. The scores are the issue with my lender, my DTI is well below the maximum, even with the mortgage payment it's only 25% and I have 9 months of liquid reserves. They literally have no flexibilty on the scores, the system does not allow PMI for a score under 700 so that's why I'm so focused on getting my middle score there. Hopefully the actions I've taken will get me there.
Honestly, I think you will see that increase just by doing what you've done with the cc's! Utility matters a LOT!
Good luck and let us know when it reports!
Think you need to slap your lender as well: hard inquiries every 60 days is an utterly lame practice. It might be common as I'm unfamiliar with new construction loans, but it's doing nothing beneficial for your scores with their doing that. See if they'll accept reports from the bureaus or something other than that to show your good behavior.
