Which will hurt my FICO least/help my FICO most of the following?

[Anonymous]

I am in a situation where a required loan (mortgage) will be obtained in October that has an interest rate which varies based on FICO score. If the October deadline passes and I don't get the loan, the property the loan is for will no longer be available (I have a deposit on the property that will run through the deadline and is not renewable; if no mortgage approval at that point, the offer is gone). I have a car leased (36 month lease), and the lease will be up in August. I need to at the least maintain my current FICO score to get the lowest interest rate on the upcoming loan, and will get a better rate if it is higher.  I cannot get the mortgage done now; it must be done after my car lease is up.  The reasons this is time sensitive are twofold - first, I am pregnant with my second child and we need a bigger place; second, the home lot we are looking at would be new construction and no site/builder/home style that I ever could have imagined could be a better longer term fit for my family.

Which of the following, if any, would lead to no decrease in my credit score? If all would lead to a decrease, which would lead to the least decrease? Would any actually increase my score?  Note that I have no revolving debt or other debt that can be paid down further prior to obtaining the upcoming loan.  I do have a few accounts, both revolving and old student loans, which are much much older than the car leases.  They are all current and have been paid on time since they were opened.  Also assume that I cannot pay cash to purchase a vehicle and leasing or purchasing one would require financing.

Options are as follows:

1) Turn in leased car and do monthly car rental from Hertz over the following months, until the home loan goes through; would not require hard inquiry to my knowledge and would not open a new line of credit to my knowledge(?)

2) Convert leased car into a purchase (would this require new financing?  I'd assume so)

3) Return leased car and purchase different car

4) Return leased car and lease different car

Any of the above, save for renting a car, could be done through the same financial services broker with whom I am leasing my car now which actually belongs to the car company (i.e. if the car were a BMW - it's not - and it was run through BMW finance for the lease). Not sure if that is relevant or not, and I am wondering about that too... am thinking of going to a different car brand if I do lease/purchase a different car.

Also note that I don't care about ROI on the car or any other future investment or equity potential, aside from the house. A few months after the deadline to apply for the new loan I need, my salary will be climbing VERY substantially and I can always put off purchasing (or leasing) cars until down the road if needed and rent cars in the meantime.

Assume that I have no choice and need to do whatever possible to get the house.

I am explaining the conditions here in a detailed way; I can provide clarity, but please assume that for purposes of this thread that none of the conditions can be changed.

Any insight that can be given is appreciated. I have read all kinds of FICO FAQ's and as it applies to my current lease situation I am not sure how to analyse the situation appropriately.

[Anonymous]

We can answer your question if we know a few more things:

(1)  Do you have any open installment accounts, other than this auto lease?  If so, what is your current balance on each and how much was the loan originally for?

(2)  Does each of your open installment accounts (including the auto lease) appear on all three bureaus?

(3)  What is your average age of accounts (AAoA) at each of the three bureaus?  What is the total number of accounts at each bureau (closed and open together0?

(4)  Do you currently have all of your credit cards (except one) reporting $0, with the remaining card reporting a small positive balance?  If not, would you be able to do that?  Taking that action might raise your score.

(5)  Have you enrolled in a service like myFICO Premium, which gives you your mortgage scores every month?  (Mortgage scores are different from your FICO 8 Scores.)  If so, what are your three mortgage scores?  The only score that should be affected by the lease close is the EX mortgage score.  If it is already your lowest score, then your "middle" mortgage score would not change if your EX score went down.

(6)  Do you have $510 that you could use to open a bank account?  There's a solution called the SS Loan Technique that protect you against score loss at EX, but whether it is advisable depends on the answers to these other questions.

Of the four options you gave, #1 is likely to hurt you the least, but we can advise you best if we hear the answers to your other questions.

[Anonymous]

Knowing where your current credit scores stand would be helpful.  I'm wondering if your current scores already qualify you for the best rates and you're simply trying to maintain them (that's the impression I got) or if you actually need to raise your scores a bit. 

You do not want to take on a new car loan in August when your lease is up.  Doing so not only would likely drop your score slightly due to the installment loan utilization change (going from single-digit utilization to 100% utilization) as well as a potential AAoA reduction and AoYA reduction, but it also does not look favorable to whoever is considering your mortgage.  As CGID asked though, it's important to know if you have another open installment loan.  

[Anonymous]

So, a few updates and clarifications since my last post... Let me know any further clarifications you'd like.  Sorry for the delay, was out of town to see family over the last few days for the holiday weekend.

First, there are actually two cars leased to my name; I forgot that my wife's leased car was under my credit and name, with her name as a secondary.  The second lease ends actually in October, after when the mortgage would be going through, at least according to the current schedule with the mortgage.

Second, I may (possibly - am looking into this now) be able to extend the current leases on the cars, rather than turning them in.  From what I have seen so far, it seems that renting cars and closing the lease accounts may be the best option, but I would like to know if that strategy would change if I could simply extend the leases.  I don't know if extending leases means refinancing and taking another hit/opening a new installment account or if it involves renegotiating the terms of the old installment loan, for purposes of FICO scoring, and if you guys have any insight that would be helpful.  Point taken that I will not be purchasing/leasing different cars when the current leases end.

Further clarity regarding my overall situation... I am a physician.  Currently making enough to basically maintain balances (pay down a few hundred every couple weeks now) on my credit card accounts which currently have very high utilization - I'm talking literally RIGHT at 95% utilization - and total credit card balance of around $73,500 (out of $77,500 limit).  That said, I have never had a late payment, and the ages of the four credit card accounts I have are approximately 15 years, 15 years, 4 years, and 3 years.  I have always maintained a small balance until balances started going up and up as I moved closer to finishing my training after medical school and now as I approach partnership.  I am making $350,000/year right now pre-tax, and a huge chunk of that goes towards my quarter millionish in student loans for medical school.  Beginning just after the mortgage money needs to come through, I will be getting at least a $300,000/year (pre-tax) guaranteed raise, and more likely a $350k/year raise, before about $40k of bonuses per year which won't begin posting until November 2018.  There are no foregiveness programs or other programs (i.e. practice rurally for foregiveness of loans, etc) that I qualify for as I am a subspecialty physician.  Can't join the military for foregiveness due to a chronic illness.  I also can't reduce student loan payments based on my current income using government programs.  My plans have always been to near max revolving debt around now and then become partner, then pay all revolving debt down in a matter of 1-3 years which is very realistic, and then refinance my mortgage if it makes sense at that time.  The kink that got thrown into all of this is that this home opportunity has come up in an area that will almost certainly make it a good investment in the end and it is exactly what my wife and I have been looking for.  We absolutely need to leave our current living situation due to the fact that we'll be having another child soon and I would hate to waste capital on the moving process or further dumping money into renting apartments as we are doing now.

As for installment loans, I have a boatload of student loans, and have signed off on a couple of my wife's.  I also have a $35,000 private loan that is 10-11 years old through SunTrust Physician Loans whose principal has been paid down over the last few years (guessing around $31,000 principal now?  can update once the Suntrust people are back in their offices tomorrow).  No late payments ever on that account, and I've been paying on it for 10+ years.  I did have a mortgage out while in training, from 2008-2014, with probably 49 payments on it.  No late payments ever and the home was sold in 6/2014.

My standard FICO score is 710, according to multiple credit cards that I have that offer free FICO score reporting.  I have recently liquidated more cash by taking loans out on life insurance policies (shouldn't affect credit) and cashing in on 10 years' worth of saved up "cash back" rewards on a credit card along with cashing in on a bunch of physician market research I've been participating in, all said netting me about 4-5 thousand dollars to pay revoliving debt down with in preparation for the mortgage.  I moved all of this money within the last two weeks and am ready to pay down whatever would be most appropriate to pay down at this point.  I would like to know if it would matter if I had two cards at 85% utilization and two at 97% versus all four at 95%.  I don't know how that all works in regards to FICO scoring.  I'd also like to hear of any other more creative ways of liquidating cash to improve credit score if there are any you guys can think of.  I have some money in 401(a) plans (though I am not currently contributing), but unfortunately cannot liquidate/sell these accounts unless I lose my job or leave it.  I am maintaining an additional $3,000 "safety net" emergency fund currently which I don't want to use to pay down cards as it truly is an emergency fund, unless I can be convinced otherwise.

This mortgage is unique and for physicians only.  There are many physicians out there with little to no credit history, or a not-so-great score (like me), but lenders seem to think we will be reliable folks to give mortgages to since income shoots up so substantially once we're out in the real world, especially as subspecialists, and we have job security and pay reliably.  My "FICO score" per the person who does the mortgage loans, needs to be at 710.  If it is 710, I can secure the mortgage and get the home with no down payment, which as you can see I am not in the market to produce at this time.  Below 710 and my hopes of getting this home are sunk.  As I said above, I am straddling RIGHT on 710 and have been for the last 4-5 months on my FICO score reported by credit agencies, which is a big part of the reason I'm nervous here.  I am sure the 710 reported by my credit card agencies is not my mortgage score.  My mortgage score might be 750, it might be 670, from what I am seeing on the forums here.  I have no idea how closing or otherwise manipulating the lease accounts would affect it which is one of the big reasons I'm posting here.  It's one of the few things still inside my control that may make a difference moving into October.

I would be more than happy to provide specifics in the form of my actual credit report - I am willing to download it, edit it to scrub all personally identifying information off of it, put it back up as a .pdf, and then furnish is here on the forums to be reviewed.  Otherwise, I'm happy to mine whatever specific information out of it that may be helpful.  Particularly as it pertains to CreditGuyInDixie's inquiries, I can provide very specific answers once I pull my full credit report.  I am ready to purchase any of the packages from myFICO to provide actual scores, but I am trying to figure out when it would be most appropriate to purchase one of the packages and which package it should be.  If I can update mortgage scores monthly that would be immensely helpful.  For what it's worth, I cannot pay any of my credit card balances to zero... or even close.  I can probably get and hold around 93-94% utilization across all accounts if it would be the most helpful tact to take now.

I do have $510 with which I can open a bank account, if this would end up helping as well.  Hopefully by coming here this early I will be able to really strategize the best approach moving forward, and quickly.

I asked for help on a bunch of items above and will be more active in this thread from here on out, likely daily until I have cleared things up as best as possible.  Thanks again for hearing about my case which I am guessing is somewhat unique and may give some of you guys a little bit of a (fun? or maybe not?) challenge to help work through.

EDIT: I did try to go through Lending Club to get a $30k loan about a year and a half ago (when income was $310k/yr) to drop CC balances, but the application was denied.  Don't know how this would be helpful or if it would be helpful.  I could reapply with them and note my current/anticipated $465k this tax year as my current income, but have no idea if there's a chance in **** they'd consider approving it.

[Anonymous]

To help move things along... Just plonked down small sums through Experian to get their FICO 8 and FICO 2 scores.  Also got my Equifax/Beacon 5.0.  Not sure if I can get the proper TU score without going through myFICO - which I am willing to do - as going through transunion.com gets my useless VantageScore 5.0.....

EX FICO 8 5/29/17: 728

EX FICO 2 5/29/17: 713

EQ 5/Beacon 5.0 5/29/17 (is this what I got from signing up at Equifax?  Fine print says "based on FICO score 5 model"): 710

Ancillary info from the reports:

Length of credit history: 15 years, 4 months

Average account age: 8 years, 3 months

Inquiries in the last 2 years: 3

Public records, negative accounts, and collections: all 0

Mortgage: 0 accounts

Installment: 13 accounts, balance $275,432, available $17,794, credit limit $293,226, debt:credit ratio 94%, monthly payment amount $4,261, accounts with balance 13

Revolving: 4 accounts, balance $75,959 (down to about $71,000 after the monies I recently liquidated), available $1,541, credit limit $77,500, debt:credit ratio 98%, monthly payment amount $1,581, accounts with a balance 4

Other: 0 accounts

Total: 17 accounts, $351,391 balance, $19,335 available, $370,726 credit limit, 95% debt:credit ratio, $5,842 monthly payment amount, 17 accounts with balance 

Most recent account opened 11 months ago (cosigned student loan for wife)

I would like to actually post images in here of my more detailed credit reports with personally indentifying info scrubbed if it would be of any help, but don't know what image hosting service to use.  Looks like there is not an option to upload images into the post using this board's software.  Which image hosting service seems to work best for this purpose here?  If this wouldn't be helpful to you in analyzing my situation, just tell me.  I'd be happy to not have to put in the effort to edit a bunch of files to delete personal information from them prior to posting 

[Anonymous]

Is there any family/friends or way you could get a loan to take those UTIs down? The biggest score jump comes as you get control of UTI on revolving credit..from what I have learned here the big score bumps are

79%

49%

29%

and with mortgage companies I think they don't look at "gifts/family loans" 90 days prior to applying for having to explain where the cash comes from if they do, have whoever the money comes from write the check directly to CC company.  Also another route if possible is an advance pay from the practice you are joining? My SIL was able to take a 50% advance pay when he joined his. Can you take a loan on your savings? My CU offers this at a much lower APR and that could help you pay down too

Good Luck!!

[Anonymous]

Unfortunately, I don't come from money and nor does my wife.  To get down to 79% from my ~95% usage currently it would take about $13,000 from family or a friend.  Not so sure I could secure this.  If I can get any sort of validation of the 79% boosting my score substantially, I'll try and go for it through my parents who are nearing retirement, basically with a promise of paying them back when I get my bonus in early December this year which will be about $14k after taxes.  I have already joined the practice and am in my two year burn-in period, currently on fixed salary plus a bonus of 15% of what I'd earn otherwise once I hit a certain productivity threshold, to be paid in December of this year; I simply flip over to become a partner and hit straight productivity based pay as of October 1.  I got an advance when I signed the contract to join for the "burn in" period back in 10/2015, and assume I could do the same when coming in as a partner.  However, I am hesitant to do this for a very unexpected reason.  When I came on board with this practice, I took a $45k advance (pre-tax).  They were supposed to pull it from my paychecks, per the contract I signed when I came on board, through the first two years.  However, they haven't pulled a penny.  The independent third party organization that combs their books each fiscal year must not have noticed the $40k that disappeared after I signed on during fiscal year 2015-2016, because after 1 year I never heard from the chair of my practice about it.  I am guessing that he heard about it after I'd been on board for a year and didn't want to lose me at that point, seeing how productive I was.  Not a word has been spoken with me about it.  I just feel that if I tempt fate and ask for an advance at this point that it might be brought up.  Not sure of this but I do have some hesitation here.  I don't think I'll be signing my partnership contract until 9/2017 anyway and may not see that advance until literally 1-2 weeks prior to needing to get on board with the mortgage.

Unfortunately, I have no savings (only the money in the 401(a) totalling about $45k which I can't move unless I lose my job).  My wife has a joint account with me and so herself has nothing to offer here.  Her credit history is virtually nonexistent, though I have her as a co-user on my cards and she does have her own student loan accounts which I've co-signed on.

[#8]

Unfortunately, I don't come from money and nor does my wife.  To get down to 79% from my ~95% usage currently it would take about $13,000 from family or a friend.  Not so sure I could secure this.  If I can get any sort of validation of the 79% boosting my score substantially, I'll try and go for it through my parents who are nearing retirement, basically with a promise of paying them back when I get my bonus in early December this year which will be about $14k after taxes.  I have already joined the practice and am in my two year burn-in period, currently on fixed salary plus a bonus of 15% of what I'd earn otherwise once I hit a certain productivity threshold, to be paid in December of this year; I simply flip over to become a partner and hit straight productivity based pay as of October 1.  I got an advance when I signed the contract to join for the "burn in" period back in 10/2015, and assume I could do the same when coming in as a partner.  However, I am hesitant to do this for a very unexpected reason.  When I came on board with this practice, I took a $45k advance (pre-tax).  They were supposed to pull it from my paychecks, per the contract I signed when I came on board, through the first two years.  However, they haven't pulled a penny.  The independent third party organization that combs their books each fiscal year must not have noticed the $40k that disappeared after I signed on during fiscal year 2015-2016, because after 1 year I never heard from the chair of my practice about it.  I am guessing that he heard about it after I'd been on board for a year and didn't want to lose me at that point, seeing how productive I was.  Not a word has been spoken with me about it.  I just feel that if I tempt fate and ask for an advance at this point that it might be brought up.  Not sure of this but I do have some hesitation here.  I don't think I'll be signing my partnership contract until 9/2017 anyway and may not see that advance until literally 1-2 weeks prior to needing to get on board with the mortgage.

Unfortunately, I have no savings (only the money in the 401(a) totalling about $45k which I can't move unless I lose my job).  My wife has a joint account with me and so herself has nothing to offer here.  Her credit history is virtually nonexistent, though I have her as a co-user on my cards and she does have her own student loan accounts which I've co-signed on.

[Anonymous]

---

@Anonymous wrote:

Unfortunately, I don't come from money and nor does my wife.  To get down to 79% from my ~95% usage currently it would take about $13,000 from family or a friend.  Not so sure I could secure this.  If I can get any sort of validation of the 79% boosting my score substantially, I'll try and go for it through my parents who are nearing retirement, basically with a promise of paying them back when I get my bonus in early December this year which will be about $14k after taxes.  I have already joined the practice and am in my two year burn-in period, currently on fixed salary plus a bonus of 15% of what I'd earn otherwise once I hit a certain productivity threshold, to be paid in December of this year; I simply flip over to become a partner and hit straight productivity based pay as of October 1.  I got an advance when I signed the contract to join for the "burn in" period back in 10/2015, and assume I could do the same when coming in as a partner.  However, I am hesitant to do this for a very unexpected reason.  When I came on board with this practice, I took a $45k advance (pre-tax).  They were supposed to pull it from my paychecks, per the contract I signed when I came on board, through the first two years.  However, they haven't pulled a penny.  The independent third party organization that combs their books each fiscal year must not have noticed the $40k that disappeared after I signed on during fiscal year 2015-2016, because after 1 year I never heard from the chair of my practice about it.  I am guessing that he heard about it after I'd been on board for a year and didn't want to lose me at that point, seeing how productive I was.  Not a word has been spoken with me about it.  I just feel that if I tempt fate and ask for an advance at this point that it might be brought up.  Not sure of this but I do have some hesitation here.  I don't think I'll be signing my partnership contract until 9/2017 anyway and may not see that advance until literally 1-2 weeks prior to needing to get on board with the mortgage.

Unfortunately, I have no savings (only the money in the 401(a) totalling about $45k which I can't move unless I lose my job).  My wife has a joint account with me and so herself has nothing to offer here.  Her credit history is virtually nonexistent, though I have her as a co-user on my cards and she does have her own student loan accounts which I've co-signed on.

---

I understand about family...but I highlighted a possible good thing...when you get that advance immediately (within 24hrs)  apply it to CCs and ask if your lender to do a "rapid rescore' .they will show any payments made up 72hrs prior to that date

Best of Luck!

[#10]

Unfortunately, I don't come from money and nor does my wife.  To get down to 79% from my ~95% usage currently it would take about $13,000 from family or a friend.  Not so sure I could secure this.  If I can get any sort of validation of the 79% boosting my score substantially, I'll try and go for it through my parents who are nearing retirement, basically with a promise of paying them back when I get my bonus in early December this year which will be about $14k after taxes.  I have already joined the practice and am in my two year burn-in period, currently on fixed salary plus a bonus of 15% of what I'd earn otherwise once I hit a certain productivity threshold, to be paid in December of this year; I simply flip over to become a partner and hit straight productivity based pay as of October 1.  I got an advance when I signed the contract to join for the "burn in" period back in 10/2015, and assume I could do the same when coming in as a partner.  However, I am hesitant to do this for a very unexpected reason.  When I came on board with this practice, I took a $45k advance (pre-tax).  They were supposed to pull it from my paychecks, per the contract I signed when I came on board, through the first two years.  However, they haven't pulled a penny.  The independent third party organization that combs their books each fiscal year must not have noticed the $40k that disappeared after I signed on during fiscal year 2015-2016, because after 1 year I never heard from the chair of my practice about it.  I am guessing that he heard about it after I'd been on board for a year and didn't want to lose me at that point, seeing how productive I was.  Not a word has been spoken with me about it.  I just feel that if I tempt fate and ask for an advance at this point that it might be brought up.  Not sure of this but I do have some hesitation here.  I don't think I'll be signing my partnership contract until 9/2017 anyway and may not see that advance until literally 1-2 weeks prior to needing to get on board with the mortgage.

Unfortunately, I have no savings (only the money in the 401(a) totalling about $45k which I can't move unless I lose my job).  My wife has a joint account with me and so herself has nothing to offer here.  Her credit history is virtually nonexistent, though I have her as a co-user on my cards and she does have her own student loan accounts which I've co-signed on.

[Anonymous]

Thanks for replies so far... I have added a few things since some folks here originally looked at this thread.  Am hoping to get further thoughts and insight on the effect of extending leases versus closing lease account(s) out on my credit score, as based on what has been said so far it looks like the best option would either be to extend the lease or close lease and rent a car.  Also hoping to have other questions I've asked be addressed.  With the two scores I have obtained (710 and 713) are so, so, so near the 710 that I need for the mortgage, I fear even the slightest misstep here...

[#12]

Thanks for replies so far... I have added a few things since some folks here originally looked at this thread.  Am hoping to get further thoughts and insight on the effect of extending leases versus closing lease account(s) out on my credit score, as based on what has been said so far it looks like the best option would either be to extend the lease or close lease and rent a car.  Also hoping to have other questions I've asked be addressed.  With the two scores I have obtained (710 and 713) are so, so, so near the 710 that I need for the mortgage, I fear even the slightest misstep here...

[medicgrrl]

You want to get each card below 89%. Based on 75k balance and you having 4-5 to put towards this, you should be close. Also, have you called any of your creditors to discuss what you're attempting and request a CLI? Don't do it online. Call the CEO if you need to.

As far as the leases, if you can extend them until after closing without a HP, that's going to be best. Anything to avoid having your credit pulled right now will help you.

You can purchase a 1bureau report on here for TU and it will give you your last mortgage score.