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Optimal utilization for scores


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Hello,

 

I'll be applying for a mortgage in the next couple of months and wanted to see if there is a way for me to bump my score up to the next score tier by changing my CC utilization. I have 6 CCs and use the AZEO method to get the most benefit. I usually keep a balance of about $10 on a CC which has a limit of $33,500. I subscribed to myFico for the month so I can get an idea of where I stand and noticed that my mid is 756. One of the reasons listed by EX (EX fico 2) under what's hurting your score is "Not using revolving credit". Is it because the card's limit is too high for the $9 utilization. Would I benefit from increasing the balance to $100-$200 so this is not a factor? Another point to note: I had a 30 day late payment 2.7 years back. Other factors:
Oldest account: 8 years

AAoA: 4 years 6 months

Last enquiry: 5 months back.

Other closed loans: 2

 

Your insights are appreciated.

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That should be optimal.

 

Might be a longshot, but are you actually looking at the reports to make sure that the one card is actually reporting the balance  you think it is?  

 

A couple of examples of why I'm asking:

 

- Chase will report your statement balance, but then if you pay the same card to zero mid-cycle, they'll update the balance to zero shortly thereafter;

- US Bank doesn't report statement balance, it reports your end-of-calendar-month balance;

- Amex sometimes is more than one statement cycle behind in reporting balances.

 

Just some examples.

 

 

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3 hours ago, cv91915 said:

That should be optimal.

 

Might be a longshot, but are you actually looking at the reports to make sure that the one card is actually reporting the balance  you think it is?  

 

A couple of examples of why I'm asking:

 

- Chase will report your statement balance, but then if you pay the same card to zero mid-cycle, they'll update the balance to zero shortly thereafter;

- US Bank doesn't report statement balance, it reports your end-of-calendar-month balance;

- Amex sometimes is more than one statement cycle behind in reporting balances.

 

Just some examples.

 

 

Yes, I checked the EX report to make sure there is a $9 balance. I was aware of those and chose to keep the balance on my BofA card. I was just surprised to see "Not using revolving credit"  as one of the things hurting the credit score. Being so close to 760 I was just wondering bumping up usage would help get to the next bracket and help reduce the points I pay for a rate. Also, is it likely that the enquiry's impact drops off next month. From what I have read it impacts the score for 6 months.

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2 hours ago, cigrage said:

Yes, I checked the EX report to make sure there is a $9 balance. I was aware of those and chose to keep the balance on my BofA card. I was just surprised to see "Not using revolving credit"  as one of the things hurting the credit score. Being so close to 760 I was just wondering bumping up usage would help get to the next bracket and help reduce the points I pay for a rate. Also, is it likely that the enquiry's impact drops off next month. From what I have read it impacts the score for 6 months.

Got it, I figured you'd checked but wanted to be sure.

 

The mortgage FICOs, IME, are really sensitive to the number of accounts with balances, so I'd be more inclined to try to push the single-card balance up a bit than I would to try to have a second card report a balance.

 

The older inquiries aren't doing anything to your scores at this point.

2 hours ago, cigrage said:

Being so close to 760 I was just wondering bumping up usage would help get to the next bracket and help reduce the points I pay for a rate.

Have you already selected a mortgage company?  If so, I'd ask to make sure that there's even an invisible line at 760.  720 or 740 may get you the lowest pricing.

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6 hours ago, cv91915 said:

The mortgage FICOs, IME, are really sensitive to the number of accounts with balances, so I'd be more inclined to try to push the single-card balance up a bit than I would to try to have a second card report a balance.

Yeah, I was thinking I'd post closer to $100 this time around. 

 

6 hours ago, cv91915 said:

Have you already selected a mortgage company?  If so, I'd ask to make sure that there's even an invisible line at 760.  720 or 740 may get you the lowest pricing.

I used the online mortgage rate tool by Wells Fargo and it seemed to give me a 0.125% rate difference if I chose 760+ as my score. I am not sure if this is something that can be trusted though. I remember  the agent I spoke to might have said that invisible line may be at 740. Thanks for your help :)

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Not to hijack your thread but this is my very recent experience on buying a home. I think every lender is different. I just closed on a home and the cutoff was 740 for top tier, conventional with 20% down.. Thanks to the advice given on Creditboards a few years ago, I also had  a back-up. It wasn't needed but was there just in case.

 

I was carrying balances on 2 cards (4k at 0% interest) plus had an open installment loan and extremely high student loan debt (which has since been forgiven via PSLF :)). My lender said to leave everything alone unless the underwriter requested something. He did mention that not having any inquiries within the last 90 days was favorable (I actually had none in 2 years) but if there had been inquiries, it would not have been a negative--just something I would need to explain. Beyond 90 days they didn't care.

 

I did an underwritten pre-approval before I started shopping as cash is king on the barrier island where I wanted to buy. Most sellers wouldn't even entertain an offer that required selling a home or no pre-approval. 

 

I wrote the offer 11/3/2020 and closed 11/30/2020. 30 year at 2.625--if I had waited one more day to lock it would've been 2.5 but oh well. The closing was remote as I don't live in the state where I bought my home.

 

Pick a lender/broker you like and go for it. Enjoy the hunt!!

 

 

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I wouldn't d1ck around with Hells Fart-go or any other TBTF. I just did a refi with Caliber Home Loans and couldn't have been happier with my experience. Sure, a couple flubs but emails to my LO got things sorted out. You don't say if you are looking to go conventional or FHA.

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On 1/13/2021 at 5:32 AM, morehelp said:

Not to hijack your thread but this is my very recent experience on buying a home. I think every lender is different. I just closed on a home and the cutoff was 740 for top tier, conventional with 20% down.. Thanks to the advice given on Creditboards a few years ago, I also had  a back-up. It wasn't needed but was there just in case.

 

I was carrying balances on 2 cards (4k at 0% interest) plus had an open installment loan and extremely high student loan debt (which has since been forgiven via PSLF :)). My lender said to leave everything alone unless the underwriter requested something. He did mention that not having any inquiries within the last 90 days was favorable (I actually had none in 2 years) but if there had been inquiries, it would not have been a negative--just something I would need to explain. Beyond 90 days they didn't care.

 

I did an underwritten pre-approval before I started shopping as cash is king on the barrier island where I wanted to buy. Most sellers wouldn't even entertain an offer that required selling a home or no pre-approval. 

 

I wrote the offer 11/3/2020 and closed 11/30/2020. 30 year at 2.625--if I had waited one more day to lock it would've been 2.5 but oh well. The closing was remote as I don't live in the state where I bought my home.

 

Pick a lender/broker you like and go for it. Enjoy the hunt!!

 

 

Thank you and congratulations! Your insights really help. I am trying to get a jumbo loan from what I have been finding out the closing costs differ at the 760 and 780 levels. I'll get multiple approvals to make sure there are no hiccups. 

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On 1/13/2021 at 2:12 PM, IndyPoolPlayer said:

I wouldn't d1ck around with Hells Fart-go or any other TBTF. I just did a refi with Caliber Home Loans and couldn't have been happier with my experience. Sure, a couple flubs but emails to my LO got things sorted out. You don't say if you are looking to go conventional or FHA.

I am looking to get a jumbo loan which is one of the reasons why I reached to Wells. I wasn't sure if I'd get good rates at other lenders. Wells had this program which gives a 0.125% discount for every 250k deposited to their account. It doesn't matter if you then go on use it as down payment. I was hoping to use this to get the best rates 

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I used US Bank who provided a LO (locally) dedicated to their Wealth Management Clients. Same 0.125% discount for banking relationship and used quite a bit of the funds in my account for the down payment. I actually debated leaving the funds in, tied to a LOC and using the LOC as the DP. The market was climbing daily and I wanted to capitalize on it by keeping the money invested, but at the end of the day, I pulled the money I needed.

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On 1/20/2021 at 7:06 PM, cigrage said:

I am looking to get a jumbo loan which is one of the reasons why I reached to Wells. I wasn't sure if I'd get good rates at other lenders. Wells had this program which gives a 0.125% discount for every 250k deposited to their account. It doesn't matter if you then go on use it as down payment. I was hoping to use this to get the best rates 

I would reach out to a couple of mortgage brokers who service your area.  In my past experiences their rates have been much more competitive than the national big banks, and since closing loans is the only way they make money, they are certainly more motivated to get you the best deal possible.

 

Another note on WF.  Back when we were buying a home in 2012, I had gotten a pre-approval from WF.  Our real estate agent suggested that we get one from somewhere else as many buyers were not taking WF pre-approvals because they took too long to or never closed loans, causing enormous issues as you can imagine (for example my transaction was linked to 2 others..buyer had to buy our condo so we could buy the house so the house's owner could buy their new house).  I don't know if it is the same thing now, but worth checking in to.

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On 1/27/2021 at 3:44 AM, CTSoxFan said:

I would reach out to a couple of mortgage brokers who service your area.  In my past experiences their rates have been much more competitive than the national big banks, and since closing loans is the only way they make money, they are certainly more motivated to get you the best deal possible.

 

Another note on WF.  Back when we were buying a home in 2012, I had gotten a pre-approval from WF.  Our real estate agent suggested that we get one from somewhere else as many buyers were not taking WF pre-approvals because they took too long to or never closed loans, causing enormous issues as you can imagine (for example my transaction was linked to 2 others..buyer had to buy our condo so we could buy the house so the house's owner could buy their new house).  I don't know if it is the same thing now, but worth checking in to.

I will get multiple preapprovals, this context helps :)

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On 1/25/2021 at 9:56 AM, morehelp said:

I used US Bank who provided a LO (locally) dedicated to their Wealth Management Clients. Same 0.125% discount for banking relationship and used quite a bit of the funds in my account for the down payment. I actually debated leaving the funds in, tied to a LOC and using the LOC as the DP. The market was climbing daily and I wanted to capitalize on it by keeping the money invested, but at the end of the day, I pulled the money I needed.

I'll give them a call and see what they have to offer too, thanks!

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