~5 Months Out From Mortgage Sensible Credit Boosting Steps

[denny123]

From those that are more adept in credit scores and reports than I am can you guys double check my guesstimates for boosting credit scores and history for 2 people here. I'm a bit concerned about my ability to project on 5 months. 1 year out and this would be much easier for me, but 5 months might make some of the things I'm thinking of not valuable at all.

 

Person A:

-Numerous closed and paid off accounts stretching back years

-1 mortgage short sale that is being dealt with separately.

-1 revolving credit card line still open from 2005 which was a $9k limit prior to today. CLIed to $20k this afternoon(hard pull)

-$0 debt no other baddies

-~700 credit score

 

-Will likely have a 3 bureau hard pull for a mortgage pre-approval in the next couple of days to see what Desktop Underwriter pulls up and get a copy of the lender facing credit report

 

Person B:

-Only account on the entire profile is 1 Citi Credit Card from 2005 with likely only a few thousand limit

-No other credit history

-$0 debt obviously no baddies

 

 

My thoughts:

-2 new prime lines ASAP each likely USAA AmEx and Alliant Platinum Rewards Visa for the likelihood of higher limits(AmEx BCE and Wal Mart Discover with special # call afterward)

-Credit limit increase for Person B hopefully a soft pull

-~700 credit score

 

So I guess I'm asking is the inquiries + lowering of average age of account worth adding on more overall limits and open accounts in a time frame of 5 months? My guess is yes, but I'm not positive about it. Should they be looking at 3 lines each? Should they maybe only do 1? Or do you think they should do zero?

 

 

 

Thanks ahead of time!

[BobWang]

Use the FICO Estimator to project out.

 

http://www.whatsmyscore.org/estimator/

 

If you know Excel, you can use the spreadsheet in my siggy to plot trends.

[denny123]

The estimate drops it by 10 points, if you run the same thing both times except one with more than 6 months since last account vs. 3 to 6 months since last and 1 account vs. "2-4" accounts and altering from 0 or 1 hard inquiries(I assume loan application) to 2 or 3 in the last year.

 

But is that actually right? Is it actually advisable to take someone who for example only has 1 old account on a credit report and have them go in for a mortgage? Aren't they going to have a thin file issue? Wouldn't 2 more lines who are aged 4 months be a step in the right direction?

 

And then I ran everything the exact same through the entire program except 1 different. # of revolving lines I switched from 1 to 2-4 and it only gained 5 points on the range. Really? A person with only 1 credit line they've ever had stands basically the same chance of getting a loan as someone who has 3 credit lines?

 

Also, should I believe that 6 months is a hard line or a progressive line? I.e. does a major change happen when it's been 5 months vs. 6 months since your last open account or is there just just an incremental change from 5-6 months.

 

I just don't feel that comfortable relying on that program for some reason.

[denny123]

Look someone that understands the issues at play here gut check call!

 

1 8 year old line. You add 2 new lines cutting AAOA down to just less than 3 years. You take 2 new inquiries. You apply for a mortgage 5 months later. From both an underwriting standpoint and a credit score stand point is the 2 new lines + additional limit worth more or less than cutting down your AAOA into a 1/3, taking on a couple of inquiries, and having 2 new accounts 5 months old.

What is going to leave you in the best position 5 months out for a mortgage do you think?

Edited May 25, 2013 by denny123

[jak2136]

You might try asking in the mortgage forum. Generally most people feel you should'nt do anything that might affect your score (like open new credit) within 6 months of getting a mortgage, because there is no way to know what will actually happen. Also the general rule of thumb is it takes roughly 6 months for your score to recover after opening new credit.

[Lummy]

My refi pull tagged an inquiry for a CLI that was less than 120 days as derogatory. In fact, inquiries less than 120 days old had it's own section on my report. The underwriters did ask about it and I had to follow up with a letter of explanation

[getsome]

Adding each other as AU on your CC accounts might be beneficial to both of your scores.

[crabu2]

Adding each other as AU on your CC accounts might be beneficial to both of your scores.

 

They might also want the AU accounts taken off, for them to do a rescore, to see how each stands on their own. The 1st time I went for a mortgage, I had to take off all AU accounts because of this. Can't remember the exact number because it was 10 years ago, but I think dropping the AU accounts, from my report, caused my FICO to drop about 20 points.

 

BTW, from the time I started looking for a house and from the time I found one, it was about 12 months. My mid FICO went from about 740 to 785, during that time, and I think it was mostly because of the AAOA. When I 1st started looking, I had a new credit card that was only a few months old...

[mendelssohn]

I was told that accounts less than 1 year old don't count as tradelines that qualify for a mortgage, and not to open accounts within 6 months. You might want to ask in the mortgage forum.