@risosers wrote:My fico score 8s are 768, 763 and 767.
My 5, 4, and 2 are 725, 671, and 694.
Why are they so far off from each other?
The reasons given in "What's hurting your score" are
- "High revolving balances"
- "Missed payments"
- "New account"
- "High credit usage"
- "Collection and/or PR"
- "Recent collection and/or PR"
- "Recent missed payment"
- "Short account history"
- "Loan balances"
I'm a bit confused by some of those, because:
Revolving Utilization: 28%
Average Age of Accounts: 6 years and 7 months
Age of Oldest Account: 18 years 11 months
Age of Most Recently Opened Account: 1 year 5 monthsNumber of Recent Inquiries: 1, 1, 2
Let me know if there are other metrics it would be helpful to know.
I'm actively working on a goodwill campaign to get the missed payments removed from my reports, they are from 2016.
The collections are a medical collection from Assetcare for $85 that I'm not quite sure the best way to get removed yet, as far as I can tell the OC is out of business. Any tips here are appreciated. I did have some success with Why Chat's hipaa letter a few years ago, and am considering that.
Mortgage score are more sensitive to some aspects of your profile.
An account under 2 years of age will give the young profile code. Don't worry about it, it has minimal effect on your score (just don't open any new accounts in the 12 months leading up to your planned purchase).
*High Revolving Debt* this is one of the area's that mortgage scores are sensitive to. You have a few area's to pay attention to here.
1) stay under 8.9% aggregate utilization
2) no single card over 28.9% utilization
3) no more than one (1) out of three (3) cards reporting a balance.
I suggest searching "AZEO" (All Zero Except One), this method of managing your credit cards will help you squeeze every possible point out of your profile.
Collections: collection accounts paid or not have a significant penalty with mortgage scores and will trigger the Recent missed payment/ collection reason codes for the whole time they remain in your file.
Good news, in July the medical debt has new rules as to how they get reported. This change if I understood correctly will cause your medical collection to be removed (not sure if a zero balance is required to make it happen automatically - I'm sure someone else will be through to clarify that).
Late payments hold your scores down greatly too, so your goodwill campaign is likely your best option to get a few extra points from having them removed.
@risosers wrote:My fico score 8s are 768, 763 and 767.
My 5, 4, and 2 are 725, 671, and 694.
Why are they so far off from each other?
The reasons given in "What's hurting your score" are
- "High revolving balances"
- "Missed payments"
- "New account"
- "High credit usage"
- "Collection and/or PR"
- "Recent collection and/or PR"
- "Recent missed payment"
- "Short account history"
- "Loan balances"
I'm a bit confused by some of those, because:
Revolving Utilization: 28%
Average Age of Accounts: 6 years and 7 months
Age of Oldest Account: 18 years 11 months
Age of Most Recently Opened Account: 1 year 5 monthsNumber of Recent Inquiries: 1, 1, 2
Let me know if there are other metrics it would be helpful to know.
I'm actively working on a goodwill campaign to get the missed payments removed from my reports, they are from 2016.
The collections are a medical collection from Assetcare for $85 that I'm not quite sure the best way to get removed yet, as far as I can tell the OC is out of business. Any tips here are appreciated. I did have some success with Why Chat's hipaa letter a few years ago, and am considering that.
Based on my experience, I believe that the primary differences between the mortage scores and the FICO 8 scores are as follows:
1. The "age" factors, such as inquiries, new accounts, average age of accounts... are weighed more heavily in the mortgage scores.
2. The mortgage scores are more concerned with number of zero account balances; the more the better, except that one bank card should report a balance each month.
3. The mortgage scores penalize more heavily for very high utilization individual accounts.
4. The FICO 8 scores penalize more heavily for high aggregate utilization.
5. Very low installment utilization (9% or lower aggregate) is rewarded in FICO 8, usually ignored or given little effect in mortgage scores.
The most important things you can do to target your mortgage scores are:
1. make no applications of any kind that could result in a hard pull
2. on your revolving accounts maintain as many zero balances as possible, ideally letting one bank card report a small balance while the others report zero balance and
3. reduce the number of high utilization accounts (If you have cards with > 50% utilization get them under 50%, if you have cards with > 30% utilization get them under 30%)
@risosers wrote:Thanks. Is there any consensus regarding whether its better to have one card at 40% versus 2 cards with 20% utilization?
I don't know about consensus but I'm 100% sure it's better to have 2 accounts each with 20% utilization than 1 account with 40% utilization.
@risosers wrote:Thanks for the reply. Not to split hairs, but I probably should have asked my question more clearly. Is there a preferable way to have 20% average utilization; 2 cards at 20% utilization vs. one card with 0% and a second with 40% (all else being equal).
The other way you asked it was perfectly clear.
This one less so. I don't even know what you mean by average utilization. The meaningful numbers are (a) aggregate utilization, and (b) individual account utilization.
@risosers wrote:Yeah, sorry. I meant aggregate utilization, not average utilization. I just wanted to be sure we were talking about 2 cards in both scenarios. Thanks again for your help.
The 40% card gives you a worse penalty than the two 20% cards.
Focus on what you can control. Get the collection off, PFD, etc and get AZEO on your revolvers which mortgage scores love. If you can GW the lates even better. The age factors are what they are and time will help, but the collection gone and AZEO will give you a significant bump to mortgage scores.
