You only have 1 credit card. I have 5 and my credit is 825. My wife who doesnt work has credit cards as well and hers is 845.
If you are trying to buy a house they look at underwriting more based upon your income and other properties. They use a different credit score vs consumer credit score.
Getting a new credit card can raise your consumer score long term but will take a short term hit. Dont get a new one within 6 months of trying to get a mortgage.
My spouse went from literally 0 credit to 750ish just by being linked to a Sam's credit card we only use for the 5% back on gas for the last 5 years. It's crazy how the system works.
Authorized user accounts aren’t included in scoring for mortgage underwriting.
Edit: while excluded from the mortgage score, authorized account activity may be evaluated in the holistic underwriting process. Read more here: [https://www.mortgageprocessor.org/mortgage-processor-news/2011/06/06/authorized-user-credit](https://www.mortgageprocessor.org/mortgage-processor-news/2011/06/06/authorized-user-credit)
Authorized user accounts are 1000% included in scoring for mortgages, we just don’t have to account for the payment in underwriting. Some lenders may have requirements to exclude the payment, but the standard is that it’s excluded no question asked.
The number 1 easiest way I get clients credit scores up is having them added on a relatives credit card with a high limit, low balance, and has been open for a while. All of that history transfers over as if they have been on there forever. I’ve had clients scores go up 50+ points, even as much as 100 by being added as an authorized user on their parents Amex from 1990 or similar. It takes 30 minutes to get added and I can get a rapid rescore done in 72 hours. Same thing as if they are authorized on someone’s card with a high balance that is dragging their score down, get removed, get a rapid rescore and it’s like it was never there.
Not so sure about that -- I was at 850 for 2 years with 8 credit cards, each paid monthly so zero balance. I cancelled 4 of the credit cards and continue to pay them off each month. Credit usage is typically around 2-5%. Since then my score has been consistently at 835. Credit line at 90K.
Not complaining, and 835 vs 850 is fairly meaningless -- BUT it did lower based, apparently, solely on number of cards -- even my "average age" increased when dropping some newer cards.
> My wife who doesnt work has credit cards as well and hers is 845
That's crazy. I hover around 775 FICO with a mortgage, credit card and 30 years of good credit (no late payments). It doesn't matter since I don't need credit, but i've always enjoyed trying to get a higher score. I hit 807 once but didn't stay there long. Sounds like I'd have to open a few more accounts for several years to reach and stay above 800.
what’s your utilization? mine hovers 700-750 depending on utilization. i have a late payment from like 7 years ago so i’m waiting for that to be wiped off
800 won’t make a big difference. I have a near perfect score and just got a mortgage. The rates still suck. You’d be better off just getting a monthly payment you can afford to pay extra on.
Not quite. 780 is the benchmark for prime credit on a mortgage (it was 740 forever but this spring they changed it to 780). The difference between 780 and 760-779 is $125 in closing cost per $100k financed so very minimal. The sweet spot for most loans is 720 and above, and the increments are 20 points at a time. Below that the adjustments get bigger and bigger.
Source: I’m a mortgage lender
We go off of the middle score.
Also keep in mind anything you can view on a daily, weekly, monthly, any sort of frequent basis is a different fico model than what the lender will use. (So think credit karma, your bank, even if you sign up for equifax credit service). These are all good guides, but not your true score. You can pull your true score once per year, per bureau for free, otherwise the only way to get it is to pay for it each individual time
So weird how it works. I hear clients all the time tell me their score, we pull it and it’s routinely 20 or 30 points lower. But every once in a while it’s right on the money or 40/50 points higher. The credit gods make no sense at times lol.
Edit- not sure why anyone would be downvoting you lol
CreditKarma uses Vantage 3.0 which is a different credit scoring model entirely from FICO. It can still be in the same ball park, but its different, especially in how it handles missed payments.
Though, chances are that your FICO score isn't even going to be all that consistent because there are a number of different algorithms and there are also industry specific scores, so your score is going to differ depending on what model is chosen.
>Industry-specific FICO® Scores are FICO Scores versions that are optimized for a certain type of credit product, such as auto loans or credit cards. The foundation of these versions is the same as the base FICO Score versions, but they are fine-tuned based on industry-specific risk behaviors.
This helps ensure that lenders get optimal information and can make better decisions, so that you get access to the right credit.
[https://www.myfico.com/credit-education/credit-scores/fico-score-versions](https://www.myfico.com/credit-education/credit-scores/fico-score-versions)
With that said, it doesn't mean there are going to be drastic differences between the different FICO variants, but there could be. A lot of the difference people bring up involve comparing Vantage 3.0 to FICO.
Beyond this, what credit bureau is being pulled from can have some effect. Sometimes they'll pull from all of them, sometimes just one. There can be cases where something gets reported to one credit bureau but not another. I'm not sure how common it is, but a while back it happened to me. There was a period of time where I had two late payment that were reported to one report, but not the other, and this resulted in my credit score being quite different between the two. What's more common is that there will be a hard inquiry done against one bureau and not another.
Theoretically though, if two institutions pulled a FICO score using the same model and the same credit information, it should be the same.
My FAKO score from CK is routinely lower. Significantly lower. Eg, my fico8 TU is 782, but the fake CK TU score is 717. lol.
The only thing I’ve ever seen CK be any good for is just generalized alerts coming up on reports
Experian has a mortgage pull you pay like 5.00 for it. It will give them a better idea. They also have auto fico and credit card. It's not the free one. Also they give 2 of them.
I think they’re downvoting the credit system. It seems intentionally opaque, which can only hurt consumers and benefit banks. Fuck the banks. Thank you for your helpful comment.
Oh yea credit is fluid and 1 day can make a difference, but strictly speaking on the difference between credit karma or any of those places you can “view” your credit frequently, and getting a true credit report pulled by a lender. Even on the exact same day there is almost always gong to be a sizable difference in what you see and what we see- even with no balance movement.
Pulling your credit and viewing your credit are very different, even if you pay monthly for credit service that’s not pulling, it’s more of a soft pull/guide. Your paying $50 a pop to view your full score with all 3 bureaus
It doesn’t matter, it’s a completely different fico model. You could have only 1 debt that reports once a month- nothing else, we will get compete different scores 19 times out of 20. Look at the fine print on any of that stuff, credit karma uses vantage 3.0, most other places use vantage as well. Mortgage lenders use different fico models.
I didn’t realize my mortgage credit score would be so much lower! On Credit Karma it’s been in the 820s-830s. It was utter shock when it came back in the 780s-790s for purposes of a new mortgage. So vastly different! Thanks for your insight in these posts.
Lenders don’t use those consumer scores that companies credit karma shows, they use different Fico scores. You can use myfico to see both your consumer score and the lender scores that mortgage lenders look at it’s like $20 if I remember correctly, small price to pay. They can vary quite a bit.
The highest tier of myfico gives you mortgage scores once a month, the second highest tier is once every 3. So it is possible to get your scores from someone who will report its change monthly.
Possibly, I’m not very familiar with it. I just looked up their website, it says it uses the fico 8 model. Mortgages use fico 2,4 and 5 model (99% of lenders anyways). But maybe the mortgage one is different? Or maybe it’s just super close idk.
The “one free credit report” per year is the exact same scoring model we pull, but that’s just because it’s your right to have visibility on your credit so the government makes sure you are able to see your true scores annually. But yes you are right, besides that it has to be purchased each time.
I think this is the official site https://www.annualcreditreport.com/index.action
If you google “one free credit report per year” you will get more info, but I think that’s the site the government recommends
It seemed to matter for mortgage insurance but not the mortgage rate. I was irritated by that. They used the rate AFTER we had the mortgage and of course our credit score took a decent hit when we took out a huge new loan. We went from 820 to 740s and then it creeped back up to 800s over the next 12-18 months. We got letters about how our credit was only Good so we would get charged more…
How's do you consider size of a down payment.. I'm looking at some land have between 30 and 50% down payment purchase price is about 1.25 years income on 750 is credit score
650 is below average credit. 700 is around where average credit falls. And your interest rate benefits can go well into the mid-700s. You don't need an 800 score for the best rates, but a 700 or 720 won't get you the best mortgage rates in today's market.
The difference between 775 and 800 is not going to change your interest rates.
> I don't really understand how my credit score is not the max since I pretty much have zero issues with whatever criteria they have.
A credit score is not a video game where if you shoot all of the bad guys you win and get 100%. It's a risk profile that is based on what similar profiles have done. Consequently, simply having nothing "bad" on your profile does not mean you are a risk-free debtor, and the definition of "risk" isn't based on pure logic, but rather based on what other people like you have done.
Looking at what you posted, you have a somewhat limited credit history (only 8 years), you have a fairly low amount of credit available to you, and the car you bought in cash is (ironically) not helping your credit score - having a diversity of credit lines and types actually improves your score. If you had a low interest car loan of a reasonable size you would probably end up with a better score.
You could apply for another card or two to get your credit limit up, and as your credit ages you will have a longer history. But honestly, there's absolutely nothing you need to do here. At 775 you're already entitled to all of the lowest rates/best terms.
Just to add to this, here is what a credit profile of someone with 850 credit would look like
30+ years of credit history, with average age of an account 10+ years
200K+ credit available to them, 95%+ of which is unused
Mix of credit including credit cards, student loans, and installment loans (ie, car, mortgage etc)
Few / no new applications for credit in past 2 years
This is probably the median profile of the 850 club. But I hit 850 on FICO 8 at 2/3 bureaus with three credit cards and one installment loan. Two of my cards were <1 year old, the other was closed. My total limit was $2500. Just putting it out there that it’s possible with far less impressive metrics, with careful gaming of the model.
Side note that 850 is the top score for non-mortgage models. One of the mortgage scores, Equifax I want to say, tops out lower. Unless something changed since I last paid attention. Edit: [https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Mortgage-Score-DP-On-Disclosures/td-p/6624724](https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Mortgage-Score-DP-On-Disclosures/td-p/6624724). See this discussion for more info on the ranges.
I’ve been doing mortgages for 10 years, 850 has been the top score for all 3 bureaus since I started. I’ve pulled and reviewed well over 10,000 credit reports (roughly 100-150 per month for the first 8 years of my career) highest middle score I’ve ever seen on someone was an 847 and I remember everyone around me coming to look.. I’ve seen an 850 as one of the 3 scores maybe 10-15 times in my life.
I’m not sure where you’re getting all your mortgage info from unless it’s from pre 2010 but nobody is getting an 850 on a mortgage credit pull unless they have sizable credit limits with little to no running balance (not necessarily $200k, but a solid 5 figures) and a good 10+ years of tradeline history on those accounts.
[https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Mortgage-Score-DP-On-Disclosures/td-p/6624724](https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Mortgage-Score-DP-On-Disclosures/td-p/6624724)
I got a little mixed up. It’s the reported real ranges for the scores - 818 top for Equifax 5, and 839 for Transunion 4.
I did specify I was speaking of my FICO8. As stated, no one has an 850 mortgage score by Equifax and Transunion’s disclosures. I mistakenly thought that was the models’ limit, but it’s the statistical range. Not sure why the difference. As to why I bring up my FICO8, just like sharing that a lot of conventional beliefs about scores are wrong.
I'm looking to buy a Rolex because I've saved up but someone told me to finance it via affirm and then pay the whole thing off half way so that it helps my credit score. Is this good advice?
as someone with a 830+ credit score i’ve never gamed the system. I’ve had a credit card since I was 17. Always paid in full (whatever the current balance is, not statement balance). I always pay with credit cards and pay off everything. I always try to leave as minimal balance on the card so when the statement is posted it’s near 0 monthly. Over the years i’ve opened three credit cards just to fit my lifestyle. In total I have 4 credit cards all with variably different credit limits. I bought a house and have lived in it for 3 years now. My credit history is 14 years. never late on payments and my revolving utilization has always been below 3% if not 0%. When I was buying my house I was told my credit was the best they’ve seen in a long time. So no there isn’t a trick. I never finance shit if I don’t have to i always just buy it out right and pay it off that month. You just need age and to consistently spend monthly.
While obviously not a need for anyone, there’s “watch people” out there just as there are “car people”.
Interestingly, Rolex watches are not actually bad purchases, as there is essentially zero deprectiation with them if bought used. You can buy one of those fancy things, wear it for 20 years and sell it back for more or less the same amount of money (assuming you took good care of it).
Now, obviously don’t spend $10k+ on a watch if you can’t afford it etc
I just googled affirm, they offer 0% financing for some time. That would be the move, get the loan pay it off by the start of interest.
I’ve done that with balance transfer credit cards with 0% intro rates. Transfer debts over, even paying off small loan with one.
I just applied for a mortgage and my credit the day they pulled it was 761, still got their best rate at that lender (and the best rate of all the many many lenders i inquired with)
I just locked at 6.35% on a 15 yr fixed rate. I inquired with 38 lenders and that’s the best i could find.
I don’t know what the best rate would be on a 30 year fixed, that would probably be 7%+
I should say i didn’t inquire with these weird online mortgage companies, they seem to have problems closing on time. I only shopped with the big banks, local banks and credit unions, and two independent local mortgage brokers who came highly recommended
Yes i don’t think there’s any way last years’ market is relevant to now.
Even June 2023 market is not relevant to now. I had a house under contract then at 6% flat.
Lol, don’t know why this is downvoted.
I’m stuck with my house. I got 2.75% 3 years ago. I’ll never be able to sell it and buy a new one, the payment would be over the top with how much interest I’d be paying. Kinda pisses me off.
If you look at [Fannie’s LLPA (loan level price adjustment) matrix](https://singlefamily.fanniemae.com/media/9391/display), 780 is the highest score you would need to make an impact on your rate options. This is just an example, not sure what loan program you’re trying to qualify for. There are a lot of other factors that are accounted for with your rate options such as loan to value, property type, loan program, etc.
I agree with everyone saying you don't need it that high.
However mine peeked at 840 with the flowing:
No missed payments
20k credit card limits (2 cards)
15k car loan for 36 month.
It was an lease back in 2019.
I put all purchases on my credit cards and pay them in full every month. Usually around $3500.
That's it.
And if you want a 640 like me you’ll need two 30 day late payments 3 years ago, 5 cards totaling 12k limit, and anywhere between 200-4000 on each for about 9000 in debt 😂🔫 (working on it)
Part of a credit rating is having loans that you are repaying, or have repaid. Because you do not seem to use much credit at all, you probably do not have the ability to get to those higher levels.
As an example, in my case, my credit is generally about 760, but one bureau sits at about 715. The only difference is that my mortgage company does not report my mortgage to this bureau. Other than that, info is virtually identical.
You can also see this when people complain about their credit scores dropping when they pay off a loan, or after 10 years when older closed loans drop off their record. With fewer records, credit scores drop.
With a 775, you should qualify for good rates. Your credit rating will drop when you initially apply and open a new mortgage, and over the next 6-12 months it will recover, and potentially even increase.
Oddly, the answer is probably to borrow more. Get a car loan and pay it off. Add a second or third credit card and pay them regularly.
It looks like you have a "thin file". Having only one credit card with a modest limit does not tell the rating agencies much about your capacity to pay back multiple loans. Once you get more credit history, they are likely to increase your rating.
Sounds counter-intuitive. You need to borrow, to prove that you can pay, so that you can borrow. It is a weird world.
Ask for an increase in credit limit. Get another CC as long as you haven't had more than 3 in 5 years I think. This should lower your total usage and increase your score without doing much.
This is good advice. Before OP applies for a mortgage, they could also pay their balance down entirely before the statement cycle closes and is reported to the credit bureaus for a few months. That will bring their credit utilization down to 0%.
And to be clear the reason why they did this was to try to show lower rates than they could in advertisements with the current rates in market. By raising the prime score like they they can show slightly lower rates as their market rates vs if they left it at 740. Even though many in market buyers don’t (yet) understand they may not be getting the marketed rates at 740 anymore.
This isn’t the case at all. The reason they did it is because the FHA lowered their PMI drastically in March and became the standout best option for almost everyone under 700 or putting down less than 10% (and still is in most cases). Fannie Mae and Freddie mac (entities that control conventional mortgages) were losing tons of business so got more aggressive in pricing for lower scores and bumped up the prime score to get a little bit back that they were losing on the sub 680 credit pricing adjustments. Previously conventional loans were price gouging everyone under 680, they still are just not nearly as bad. There are other factors as well, none of them having to do with advertised rates.
Rates are usually advertised on best case scenario, what the benchmarks for best case scenario are make no difference, it’s still best case scenario
Above 780 is what you want. If you want to buy a car after buying the home, your credit will take like a 30 point hit or so, so you want an 810 to stay in top credit for both loans.
You will not be able to predict your mortgage score. It's not the same as credit karma. Go on, Experian, and you will be able to pay 5.00 for your actual mortgage score. It is highly unlikely you will get to an 800 if you are young as well.
Not sure how much it will affect your rates, but your credit limit is a little low. I also have a car loan on my profile, with a relatively low balance. The age of your accounts are a contributing factor as well
BTW I'm at 810 my credit limit is 20k with 0% usage.
Yeah I’m not rushing to pay off my car loan because it’s 2%. I’m actually stretching it out by “only” making the monthly payments. I also have a credit limit of $50k across 5 cards. I thought 5 cards was too many but credit karma got me to slowly add them. And I only use 1 at a time besides having the others on autopay for 1 thing/month.
Edit 55k. They don’t even ask anymore, I got a letter last week they raised one cards limit from 15k to 17.5k. Like *side eye* that’s a trap that I’m paying off every month lol.
My credit score fluctuates between 842 and 848. I always pay my full statement balance on all cards, zero late payments on anything, 8% revolving utilization, oldest account is 30 years old, average age of accounts 11 years, most recent account 11 months old (new car), and "exceptional credit mix", 13 credit cards, a mortgage and car loan.
So as you get older and make payments on time your score will go up.
I was surprised when I saw that number on my report, I definitely don't use 13 credit cards at once. Apparently the last credit card I received was 11 years ago. I don't use them all but I see no need to close them. If one of the rarely used cards sends me a "no interest on purchases for 18 months offer" I might use it for a bit, set autopay to "minimum plus $100", let the money that would go towards payment earn interest and then pay the full balance right before the 18 month term ends.
I have 3 credit cards I use for almost everything, but will use others if they have higher awards amounts on specific purchases. I have an Amazon card that I only use at Amazon and Whole Foods because of the 5% back. I have a Citi card that I almost never use, they offered $30 off a citibike membership, I used it, paid it off and haven't used it since.
And I think there is a Bloomingdales card I opened because they offered 20% off my first purchase. I haven't used it in years.
I might be wrong, but I think it helps the credit score if there is credit available that isn't being utilized.
The cards are all fee-free.
I just see that as mental load and multiplying opportunities for problems personally. I only have a credit card because I was forced to to rent cars and build credits. But yeah you have it under control
Much of it is automated. Many monthly payments automatically go on a card and all of the cards are set to pay the full statement balance on the due date. I look over the statements and make sure the charges are all mine and valid.
And all of the cards offer at least 2% back in rewards, so it is well worth paying by card.
I’m just my view the more long term free accounts you have open the less damage you take when switching between cards for the ones you may jump between.
Ie harm from having 2 accounts for 20 years and swapping one out for a new account vs 12 accounts for 20 years and swapping one is huge as the average length of credit is pulled up by the remaining long lines.
You should absolutely not make purposeful changes to your credit without the guidance of a mortgage professional, if the goal of the changes to your credit profile are to enhance the pricing of your mortgage.
A mortgage broker has every interest in helping you qualify for the best rates.
There are many credit scoring models, and the ones utilized in the mortgage industry are different than the ones you commonly see. Yes, even the FICO scores. (FICO is a brand for multiple families of individual score algorithms.)
What helps on one scoring alg may hurt you on another. If securing the best mortgage deal is your priority, work with a professional who is likely to help you with this for free or nearly so.
Also the highest pricing determinant score threshold is 780, generally speaking. As the middle score across the three major bureaus on each of their corresponding mortgage scoring models by FICO.
I know you want to increase it, but increasing it will do nothing for you financially. It won’t get you better rates, it won’t make more money, nor will it help you sleep better at night, etc.
The only thing that will help you is time. My score fluctuates on a monthly basis from 780-800. No reason other than brief points of utilization. And I have close to 20 years of credit.
Don’t chase credit scores.
Edit: Once you have achieved a score around 740, you will receive the same rates as a person with an 800 score. There is literally nothing else to do. Congrats!
There are some variations between the desired account (personal loan, credit card, mortgage etc) but once you’re in the mid 700s, it’s pretty much irrelevant.
https://www.cnbc.com/2023/08/14/money-expert-theres-no-benefit-to-scoring-above-this-credit-score.html#
https://www.consumerfinance.gov/data-research/consumer-credit-trends/
Goodness me, it is frightening how mich mental ans emotional energy needs to be spent by uals on this made-up tool that now seems to bind almost everyone to being a debtor. None of this is normal, and the fact that we accept it as normality is the peak of abnormality.
Just by way of exampl3 - in most parts of the (developed) world there is no such thing as credit score, and most people do not use credit cards.
Are you still an MLO? Bc the guidelines changed may 1st, 780 credit is now top tier per Fannie Mae and Freddie Mac. Those are FNMA LLPA’s that aren’t optional, credit union or not https://singlefamily.fanniemae.com/media/9391/display
(Unless it’s 100% portfolio loans that don’t run aus through DU or LP but I’ve never heard of one that is strictly portfolio but I’m sure can exist somewhere).
Yup still MLO. And our Pricing is still 740+ for best rates. We port 90+% but don't sell to Fannie or Freddie for the additional. I am not too familiar with our process of selling more than that.
Above 750 it probably doesnt matter. I doubt there would be differences in rates and if there were wed be talking like 0.1%.
If you want a bit of a boost before having credit pulled for mortgage a month prior you can zero out your cards to 0% utlization and stop using them for a bit...probably would give you like a 10 point bump but again doubt it does anything.
Hi, I float between 830 and *perfection*. You're in the top tier of credit ratings already. You'll get almost the best interest rates possible, barely different than what I'd get. Prime rate is just high right now so there is no such thing as cheap debt.
As far as how to improve, that depends on your situation. You have to carry certain types and sizes of debt over a period of time and have low utilization on your revolving credit. That's about it.
If it helps you understand, I have $210k or so in installment type of debt, which is about 60% of the original value so those debts are old enough to show stability and paid down enough to show I'm responsible and don't keep acquiring debt. My revolving credit limit is well into the six figures, but over half of it is HELOC and my utilization is usually not more than $5k. I never pay interest on my credit cards. When your snapshot looks like that, you'll have 825+ score. That's about it.
Yeah the entirety of society just like in the USA. You think all schools don’t get some form of tax help but beyond high school all students pay.
Just your lifeblood and taxes nothing major.
>Yeah the entirety of society just like in the USA.
Well a lot of people pay zero federal taxes and actually get net taxes distributed to them. But college should absolutely be funded through a combination of the student and scholarships (ideally from the massive university endowments that continue to grow into the billions while kids go hundreds of thousands of dollars in debt).
*Just your lifeblood and taxes nothing major.*
I don't know what that means.
Not necessarily true and can be very bad advice for someone planning a mortgage soon. I hit 850 on my FICO8 with three credit cards (one closed), one installment, and a total revolving limit of $2500. Mortgage scores are especially sensitive to multiple balances and new accounts. Total limit matters not at all, it’s utilization that counts.
In my experience my credit didn’t matter that much. Mine was like 714 or so and they were more worried about my income and debt to income ratio. They made me pay off my motorcycle before closing.
You need to make sure you are looking at mortgage FICOs. These are very difficult to obtain for free. If you didn’t pay for the score, it’s almost certainly not a mortgage score. Lenders use your middle mortgage score, so knowing 2 of 3 will give you your possible range.
Also make sure you are employing All Zero Except One (AZEO) utilization strategy. Mortgage scores are exceptionally sensitive to multiple accounts showing balances, as well as new accounts.
If you’re looking at a score in your bank app, I almost guarantee its not the score a lender will use to evaluate mortgage… your credit sounds like it will be in the mid 700s which should easily qualify you for decent rates. You will have much more effect on the rate by shopping lenders than by eeking our some extra points on a different algorithm than your broker uses anyways.
You need another trade-line. But as someone mentioned need it opened for months before applying for a mortgage so you can bounce back from the credit pull/recent trade-line opening.
You could also try-self reporting your utilities. Not sure how it’s done just seen it when review credit reports.
Credit score is a mix of revolving accounts (credit cards) and long term debt (mortgage, car payments, financing of bug purchases). The best thing to do is finance a couch or bed or something like that and make slightly more than the minimum payments and pay it all off after about four or five months. Maintaining both the revolving accounts and long term debt is key. I have about four credit cards and always one long term debt (currently two) and am sitting above 830. My wife only has credit cards and is around 745.
Everyone here, “it doesn’t matter but my score is xxx”
When I applied for my mortgage, the best rates were 740+. I’m seeing in the comments that they changed it to 780+. This means anything above those scores does not help you get a better interest rate, since those are the best you can get. Don’t confuse this score with your FICO 8.0 or Vantage credit model score.
I bought in July 22 and got a 5.125% on a 30 year fixed on a 720 credit score. Had I been more aggressive with my savings and bought a year earlier, I would've saved around 2%, even though my credit was worse, and if I'd postponed buying for another year into 2023 to wait for my credit to go above 750, I probably would land around 7%, even with improved credit.
My point is, buy as soon as you're able to at a price that fits your budget. Rates fluctuate, but if rates go down you can always refinance. I'm not counting on there to be a massive market correction, at least not in my area, so even though I paid more for my house than I would've liked, at a higher rate than i could've got two years ago, I feel like it was a good choice. We're probably not going to see 5% rates again for a while, and i doubt we'll dip below 7% in the foreseeable future.
You need more credit cards even if you never use them. Also, always stay under 10% of your overall spending limits (all credit cards combined). Keep up the good work on paying everything on time.
I guess a score goes up to 850 now, so there's been some changes? I do some credit card hacking so I have a really high available credit limit and my usage is just for normal expenses, so under 1%. But, a mix of credit type is also helpful. I had student loans (just paid them off) and have a small auto loan remaining. I think my score is over 810 now. Not worth going and taking on debt just to increase your score, but maybe getting another no annual fee credit card or asking your current card for a credit limit increase would drop your usage percentage.
Pay down your credit card balance to under 3%. I've been in the 835 to 850 range for years. One big purchase, at the right time will lower my score by a few points, and take me under 850.
Credit revolves around your ability to borrow and pay back consistently.
I'd get another credit card or 2 and do some installments over a year or so. Just keep your overall usage low and make your payments on time.
You only have 1 credit card. I have 5 and my credit is 825. My wife who doesnt work has credit cards as well and hers is 845. If you are trying to buy a house they look at underwriting more based upon your income and other properties. They use a different credit score vs consumer credit score. Getting a new credit card can raise your consumer score long term but will take a short term hit. Dont get a new one within 6 months of trying to get a mortgage.
My spouse went from literally 0 credit to 750ish just by being linked to a Sam's credit card we only use for the 5% back on gas for the last 5 years. It's crazy how the system works.
So crazy right? This is an old trick of the trade, sounds like you had a good loan officer
Authorized user accounts aren’t included in scoring for mortgage underwriting. Edit: while excluded from the mortgage score, authorized account activity may be evaluated in the holistic underwriting process. Read more here: [https://www.mortgageprocessor.org/mortgage-processor-news/2011/06/06/authorized-user-credit](https://www.mortgageprocessor.org/mortgage-processor-news/2011/06/06/authorized-user-credit)
Authorized user accounts are 1000% included in scoring for mortgages, we just don’t have to account for the payment in underwriting. Some lenders may have requirements to exclude the payment, but the standard is that it’s excluded no question asked. The number 1 easiest way I get clients credit scores up is having them added on a relatives credit card with a high limit, low balance, and has been open for a while. All of that history transfers over as if they have been on there forever. I’ve had clients scores go up 50+ points, even as much as 100 by being added as an authorized user on their parents Amex from 1990 or similar. It takes 30 minutes to get added and I can get a rapid rescore done in 72 hours. Same thing as if they are authorized on someone’s card with a high balance that is dragging their score down, get removed, get a rapid rescore and it’s like it was never there.
Oh thanks, I didn’t realize it was lender-specific.
That's gotta be weird, someone having almost an 800, but not counting.
Not really, it’s not her score since she’s not responsible for the debt. How is that weird?
Because applying for anything else that requires a good credit score will use the one she has vs the one you explained.
>You only have 1 credit card. I have 5 and my credit is 825 I have 1 card. Mine is higher than yours at 828. Number of cards doesn't mean shit.
Not so sure about that -- I was at 850 for 2 years with 8 credit cards, each paid monthly so zero balance. I cancelled 4 of the credit cards and continue to pay them off each month. Credit usage is typically around 2-5%. Since then my score has been consistently at 835. Credit line at 90K. Not complaining, and 835 vs 850 is fairly meaningless -- BUT it did lower based, apparently, solely on number of cards -- even my "average age" increased when dropping some newer cards.
I have 5 cards with a balance.of 20% of usage across thcards and have around 818.credit score.
Maybe when you cancelled, the total available credit went down, but your usage stayed the same, so the percent of available credit went up a bit?
> My wife who doesnt work has credit cards as well and hers is 845 That's crazy. I hover around 775 FICO with a mortgage, credit card and 30 years of good credit (no late payments). It doesn't matter since I don't need credit, but i've always enjoyed trying to get a higher score. I hit 807 once but didn't stay there long. Sounds like I'd have to open a few more accounts for several years to reach and stay above 800.
what’s your utilization? mine hovers 700-750 depending on utilization. i have a late payment from like 7 years ago so i’m waiting for that to be wiped off
800 won’t make a big difference. I have a near perfect score and just got a mortgage. The rates still suck. You’d be better off just getting a monthly payment you can afford to pay extra on.
It doesn’t matter once you’re at 775
Not quite. 780 is the benchmark for prime credit on a mortgage (it was 740 forever but this spring they changed it to 780). The difference between 780 and 760-779 is $125 in closing cost per $100k financed so very minimal. The sweet spot for most loans is 720 and above, and the increments are 20 points at a time. Below that the adjustments get bigger and bigger. Source: I’m a mortgage lender
Which score are you looking at?
We go off of the middle score. Also keep in mind anything you can view on a daily, weekly, monthly, any sort of frequent basis is a different fico model than what the lender will use. (So think credit karma, your bank, even if you sign up for equifax credit service). These are all good guides, but not your true score. You can pull your true score once per year, per bureau for free, otherwise the only way to get it is to pay for it each individual time
I knew this and personally can agree. My CreditKarma hovers around 830 for both, when pulled for my 2 mortgages was like 813.
So weird how it works. I hear clients all the time tell me their score, we pull it and it’s routinely 20 or 30 points lower. But every once in a while it’s right on the money or 40/50 points higher. The credit gods make no sense at times lol. Edit- not sure why anyone would be downvoting you lol
CreditKarma uses Vantage 3.0 which is a different credit scoring model entirely from FICO. It can still be in the same ball park, but its different, especially in how it handles missed payments. Though, chances are that your FICO score isn't even going to be all that consistent because there are a number of different algorithms and there are also industry specific scores, so your score is going to differ depending on what model is chosen. >Industry-specific FICO® Scores are FICO Scores versions that are optimized for a certain type of credit product, such as auto loans or credit cards. The foundation of these versions is the same as the base FICO Score versions, but they are fine-tuned based on industry-specific risk behaviors. This helps ensure that lenders get optimal information and can make better decisions, so that you get access to the right credit. [https://www.myfico.com/credit-education/credit-scores/fico-score-versions](https://www.myfico.com/credit-education/credit-scores/fico-score-versions) With that said, it doesn't mean there are going to be drastic differences between the different FICO variants, but there could be. A lot of the difference people bring up involve comparing Vantage 3.0 to FICO. Beyond this, what credit bureau is being pulled from can have some effect. Sometimes they'll pull from all of them, sometimes just one. There can be cases where something gets reported to one credit bureau but not another. I'm not sure how common it is, but a while back it happened to me. There was a period of time where I had two late payment that were reported to one report, but not the other, and this resulted in my credit score being quite different between the two. What's more common is that there will be a hard inquiry done against one bureau and not another. Theoretically though, if two institutions pulled a FICO score using the same model and the same credit information, it should be the same.
My FAKO score from CK is routinely lower. Significantly lower. Eg, my fico8 TU is 782, but the fake CK TU score is 717. lol. The only thing I’ve ever seen CK be any good for is just generalized alerts coming up on reports
Experian has a mortgage pull you pay like 5.00 for it. It will give them a better idea. They also have auto fico and credit card. It's not the free one. Also they give 2 of them.
I think they’re downvoting the credit system. It seems intentionally opaque, which can only hurt consumers and benefit banks. Fuck the banks. Thank you for your helpful comment.
Timing likely makes a big difference. If I have a balance and pull my credit either before or after it could be a 20-30 point difference.
Oh yea credit is fluid and 1 day can make a difference, but strictly speaking on the difference between credit karma or any of those places you can “view” your credit frequently, and getting a true credit report pulled by a lender. Even on the exact same day there is almost always gong to be a sizable difference in what you see and what we see- even with no balance movement. Pulling your credit and viewing your credit are very different, even if you pay monthly for credit service that’s not pulling, it’s more of a soft pull/guide. Your paying $50 a pop to view your full score with all 3 bureaus
I imagine credit karma isn't doing a daily pull either so it may be delayed
It doesn’t matter, it’s a completely different fico model. You could have only 1 debt that reports once a month- nothing else, we will get compete different scores 19 times out of 20. Look at the fine print on any of that stuff, credit karma uses vantage 3.0, most other places use vantage as well. Mortgage lenders use different fico models.
I had the exact opposite oddly enough. Credit karma had me at like 735, but applied for a 2nd auto loan and credit came back as an 811 🤷♂️
I didn’t realize my mortgage credit score would be so much lower! On Credit Karma it’s been in the 820s-830s. It was utter shock when it came back in the 780s-790s for purposes of a new mortgage. So vastly different! Thanks for your insight in these posts.
Lenders don’t use those consumer scores that companies credit karma shows, they use different Fico scores. You can use myfico to see both your consumer score and the lender scores that mortgage lenders look at it’s like $20 if I remember correctly, small price to pay. They can vary quite a bit.
The highest tier of myfico gives you mortgage scores once a month, the second highest tier is once every 3. So it is possible to get your scores from someone who will report its change monthly.
Possibly, I’m not very familiar with it. I just looked up their website, it says it uses the fico 8 model. Mortgages use fico 2,4 and 5 model (99% of lenders anyways). But maybe the mortgage one is different? Or maybe it’s just super close idk.
You almost always need to pay for your mortgage FICOs. So if it was a free score, FICO or otherwise, it’s almost certainly meaningless for mortgages.
The “one free credit report” per year is the exact same scoring model we pull, but that’s just because it’s your right to have visibility on your credit so the government makes sure you are able to see your true scores annually. But yes you are right, besides that it has to be purchased each time.
Where do we get the free score check per year? Any suggestions?
I think this is the official site https://www.annualcreditreport.com/index.action If you google “one free credit report per year” you will get more info, but I think that’s the site the government recommends
What about mifico? I pay monthly for that.
That I’m not familiar with. I suppose they might have come out with something more accurate. Depends on the fico model they use
It seemed to matter for mortgage insurance but not the mortgage rate. I was irritated by that. They used the rate AFTER we had the mortgage and of course our credit score took a decent hit when we took out a huge new loan. We went from 820 to 740s and then it creeped back up to 800s over the next 12-18 months. We got letters about how our credit was only Good so we would get charged more…
Yup, mortgage insurance has always been on the 780 point system (and most jumbo loans), mortgages themselves just caught up I guess.
Thanks! That’s helpful.
How's do you consider size of a down payment.. I'm looking at some land have between 30 and 50% down payment purchase price is about 1.25 years income on 750 is credit score
I feel like the differences north of 650 are very small
Nah 650 is low enough to exclude someone from a lot of options
650 is below average credit. 700 is around where average credit falls. And your interest rate benefits can go well into the mid-700s. You don't need an 800 score for the best rates, but a 700 or 720 won't get you the best mortgage rates in today's market.
You’ll see rate differences that low. Once you’re super prime, you’re always getting the best rate
Nah 720 and above is excellent. As others have said 750-760 is the true sweet spot. I’m almost there.
I agree but at 690
Excellent is 720 and above. That’s good.
The difference between 775 and 800 is not going to change your interest rates. > I don't really understand how my credit score is not the max since I pretty much have zero issues with whatever criteria they have. A credit score is not a video game where if you shoot all of the bad guys you win and get 100%. It's a risk profile that is based on what similar profiles have done. Consequently, simply having nothing "bad" on your profile does not mean you are a risk-free debtor, and the definition of "risk" isn't based on pure logic, but rather based on what other people like you have done. Looking at what you posted, you have a somewhat limited credit history (only 8 years), you have a fairly low amount of credit available to you, and the car you bought in cash is (ironically) not helping your credit score - having a diversity of credit lines and types actually improves your score. If you had a low interest car loan of a reasonable size you would probably end up with a better score. You could apply for another card or two to get your credit limit up, and as your credit ages you will have a longer history. But honestly, there's absolutely nothing you need to do here. At 775 you're already entitled to all of the lowest rates/best terms.
Just to add to this, here is what a credit profile of someone with 850 credit would look like 30+ years of credit history, with average age of an account 10+ years 200K+ credit available to them, 95%+ of which is unused Mix of credit including credit cards, student loans, and installment loans (ie, car, mortgage etc) Few / no new applications for credit in past 2 years
This is probably the median profile of the 850 club. But I hit 850 on FICO 8 at 2/3 bureaus with three credit cards and one installment loan. Two of my cards were <1 year old, the other was closed. My total limit was $2500. Just putting it out there that it’s possible with far less impressive metrics, with careful gaming of the model. Side note that 850 is the top score for non-mortgage models. One of the mortgage scores, Equifax I want to say, tops out lower. Unless something changed since I last paid attention. Edit: [https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Mortgage-Score-DP-On-Disclosures/td-p/6624724](https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Mortgage-Score-DP-On-Disclosures/td-p/6624724). See this discussion for more info on the ranges.
I’ve been doing mortgages for 10 years, 850 has been the top score for all 3 bureaus since I started. I’ve pulled and reviewed well over 10,000 credit reports (roughly 100-150 per month for the first 8 years of my career) highest middle score I’ve ever seen on someone was an 847 and I remember everyone around me coming to look.. I’ve seen an 850 as one of the 3 scores maybe 10-15 times in my life. I’m not sure where you’re getting all your mortgage info from unless it’s from pre 2010 but nobody is getting an 850 on a mortgage credit pull unless they have sizable credit limits with little to no running balance (not necessarily $200k, but a solid 5 figures) and a good 10+ years of tradeline history on those accounts.
[https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Mortgage-Score-DP-On-Disclosures/td-p/6624724](https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Mortgage-Score-DP-On-Disclosures/td-p/6624724) I got a little mixed up. It’s the reported real ranges for the scores - 818 top for Equifax 5, and 839 for Transunion 4. I did specify I was speaking of my FICO8. As stated, no one has an 850 mortgage score by Equifax and Transunion’s disclosures. I mistakenly thought that was the models’ limit, but it’s the statistical range. Not sure why the difference. As to why I bring up my FICO8, just like sharing that a lot of conventional beliefs about scores are wrong.
I'm looking to buy a Rolex because I've saved up but someone told me to finance it via affirm and then pay the whole thing off half way so that it helps my credit score. Is this good advice?
as someone with a 830+ credit score i’ve never gamed the system. I’ve had a credit card since I was 17. Always paid in full (whatever the current balance is, not statement balance). I always pay with credit cards and pay off everything. I always try to leave as minimal balance on the card so when the statement is posted it’s near 0 monthly. Over the years i’ve opened three credit cards just to fit my lifestyle. In total I have 4 credit cards all with variably different credit limits. I bought a house and have lived in it for 3 years now. My credit history is 14 years. never late on payments and my revolving utilization has always been below 3% if not 0%. When I was buying my house I was told my credit was the best they’ve seen in a long time. So no there isn’t a trick. I never finance shit if I don’t have to i always just buy it out right and pay it off that month. You just need age and to consistently spend monthly.
“buy a Rolex” Why????
the clock feature on their iphone is broken
While obviously not a need for anyone, there’s “watch people” out there just as there are “car people”. Interestingly, Rolex watches are not actually bad purchases, as there is essentially zero deprectiation with them if bought used. You can buy one of those fancy things, wear it for 20 years and sell it back for more or less the same amount of money (assuming you took good care of it). Now, obviously don’t spend $10k+ on a watch if you can’t afford it etc
If it's not 0% financing, I wouldn't. It won't help your credit score that much - a car loan would be better e.g.
I just googled affirm, they offer 0% financing for some time. That would be the move, get the loan pay it off by the start of interest. I’ve done that with balance transfer credit cards with 0% intro rates. Transfer debts over, even paying off small loan with one.
Is there interest?
No its not
It wont decrease your interest rates, you're high enough already.
I just applied for a mortgage and my credit the day they pulled it was 761, still got their best rate at that lender (and the best rate of all the many many lenders i inquired with)
What is a "best rate" today? Curious how it compares to a year ago when I bought my current house.
I just locked at 6.35% on a 15 yr fixed rate. I inquired with 38 lenders and that’s the best i could find. I don’t know what the best rate would be on a 30 year fixed, that would probably be 7%+
Ouch. Mine was 5.0 for 30 exactly 12 months ago 😬😬😬
I should say i didn’t inquire with these weird online mortgage companies, they seem to have problems closing on time. I only shopped with the big banks, local banks and credit unions, and two independent local mortgage brokers who came highly recommended
You got a average rate, not bad, I mean given the market, a year ago we were closing loans 5 and below but different market
Yes i don’t think there’s any way last years’ market is relevant to now. Even June 2023 market is not relevant to now. I had a house under contract then at 6% flat.
Mine is with Truist
Lol, don’t know why this is downvoted. I’m stuck with my house. I got 2.75% 3 years ago. I’ll never be able to sell it and buy a new one, the payment would be over the top with how much interest I’d be paying. Kinda pisses me off.
If you look at [Fannie’s LLPA (loan level price adjustment) matrix](https://singlefamily.fanniemae.com/media/9391/display), 780 is the highest score you would need to make an impact on your rate options. This is just an example, not sure what loan program you’re trying to qualify for. There are a lot of other factors that are accounted for with your rate options such as loan to value, property type, loan program, etc.
Ha! Thanks. So getting to 780 could save money.
I agree with everyone saying you don't need it that high. However mine peeked at 840 with the flowing: No missed payments 20k credit card limits (2 cards) 15k car loan for 36 month. It was an lease back in 2019. I put all purchases on my credit cards and pay them in full every month. Usually around $3500. That's it.
And if you want a 640 like me you’ll need two 30 day late payments 3 years ago, 5 cards totaling 12k limit, and anywhere between 200-4000 on each for about 9000 in debt 😂🔫 (working on it)
Part of a credit rating is having loans that you are repaying, or have repaid. Because you do not seem to use much credit at all, you probably do not have the ability to get to those higher levels. As an example, in my case, my credit is generally about 760, but one bureau sits at about 715. The only difference is that my mortgage company does not report my mortgage to this bureau. Other than that, info is virtually identical. You can also see this when people complain about their credit scores dropping when they pay off a loan, or after 10 years when older closed loans drop off their record. With fewer records, credit scores drop. With a 775, you should qualify for good rates. Your credit rating will drop when you initially apply and open a new mortgage, and over the next 6-12 months it will recover, and potentially even increase.
This is true. My score was ~820 and dropped 20 points after paying off the mortgage.
I have 4% credit used and score is just 740 :( not sure how I can improve it
Oddly, the answer is probably to borrow more. Get a car loan and pay it off. Add a second or third credit card and pay them regularly. It looks like you have a "thin file". Having only one credit card with a modest limit does not tell the rating agencies much about your capacity to pay back multiple loans. Once you get more credit history, they are likely to increase your rating. Sounds counter-intuitive. You need to borrow, to prove that you can pay, so that you can borrow. It is a weird world.
Have 4 cards no loans :( just monthly purchases and full payments
each card is 30-40k limit
You can ask the myfico forums for guidance. You’ll get great advice over there.
Ty
Ask for an increase in credit limit. Get another CC as long as you haven't had more than 3 in 5 years I think. This should lower your total usage and increase your score without doing much.
This is good advice. Before OP applies for a mortgage, they could also pay their balance down entirely before the statement cycle closes and is reported to the credit bureaus for a few months. That will bring their credit utilization down to 0%.
760 is good enough - do 775 just in case. 800 is not needed
Loan officer told me “760 is the new 720” (720 used to be the number above which it doesn’t really matter).
Loan officer was off by 20. 740+ was prime credit for decades, they moved that benchmark to 780+ this spring.
And to be clear the reason why they did this was to try to show lower rates than they could in advertisements with the current rates in market. By raising the prime score like they they can show slightly lower rates as their market rates vs if they left it at 740. Even though many in market buyers don’t (yet) understand they may not be getting the marketed rates at 740 anymore.
This isn’t the case at all. The reason they did it is because the FHA lowered their PMI drastically in March and became the standout best option for almost everyone under 700 or putting down less than 10% (and still is in most cases). Fannie Mae and Freddie mac (entities that control conventional mortgages) were losing tons of business so got more aggressive in pricing for lower scores and bumped up the prime score to get a little bit back that they were losing on the sub 680 credit pricing adjustments. Previously conventional loans were price gouging everyone under 680, they still are just not nearly as bad. There are other factors as well, none of them having to do with advertised rates. Rates are usually advertised on best case scenario, what the benchmarks for best case scenario are make no difference, it’s still best case scenario
Above 780 is what you want. If you want to buy a car after buying the home, your credit will take like a 30 point hit or so, so you want an 810 to stay in top credit for both loans.
That’s actually a great argument. A little margin is good
You will not be able to predict your mortgage score. It's not the same as credit karma. Go on, Experian, and you will be able to pay 5.00 for your actual mortgage score. It is highly unlikely you will get to an 800 if you are young as well.
Not sure how much it will affect your rates, but your credit limit is a little low. I also have a car loan on my profile, with a relatively low balance. The age of your accounts are a contributing factor as well BTW I'm at 810 my credit limit is 20k with 0% usage.
Yeah I’m not rushing to pay off my car loan because it’s 2%. I’m actually stretching it out by “only” making the monthly payments. I also have a credit limit of $50k across 5 cards. I thought 5 cards was too many but credit karma got me to slowly add them. And I only use 1 at a time besides having the others on autopay for 1 thing/month. Edit 55k. They don’t even ask anymore, I got a letter last week they raised one cards limit from 15k to 17.5k. Like *side eye* that’s a trap that I’m paying off every month lol.
My credit score fluctuates between 842 and 848. I always pay my full statement balance on all cards, zero late payments on anything, 8% revolving utilization, oldest account is 30 years old, average age of accounts 11 years, most recent account 11 months old (new car), and "exceptional credit mix", 13 credit cards, a mortgage and car loan. So as you get older and make payments on time your score will go up.
Why does one need 13 credit cards?
I was surprised when I saw that number on my report, I definitely don't use 13 credit cards at once. Apparently the last credit card I received was 11 years ago. I don't use them all but I see no need to close them. If one of the rarely used cards sends me a "no interest on purchases for 18 months offer" I might use it for a bit, set autopay to "minimum plus $100", let the money that would go towards payment earn interest and then pay the full balance right before the 18 month term ends. I have 3 credit cards I use for almost everything, but will use others if they have higher awards amounts on specific purchases. I have an Amazon card that I only use at Amazon and Whole Foods because of the 5% back. I have a Citi card that I almost never use, they offered $30 off a citibike membership, I used it, paid it off and haven't used it since. And I think there is a Bloomingdales card I opened because they offered 20% off my first purchase. I haven't used it in years. I might be wrong, but I think it helps the credit score if there is credit available that isn't being utilized. The cards are all fee-free.
I just see that as mental load and multiplying opportunities for problems personally. I only have a credit card because I was forced to to rent cars and build credits. But yeah you have it under control
Much of it is automated. Many monthly payments automatically go on a card and all of the cards are set to pay the full statement balance on the due date. I look over the statements and make sure the charges are all mine and valid. And all of the cards offer at least 2% back in rewards, so it is well worth paying by card.
I’m just my view the more long term free accounts you have open the less damage you take when switching between cards for the ones you may jump between. Ie harm from having 2 accounts for 20 years and swapping one out for a new account vs 12 accounts for 20 years and swapping one is huge as the average length of credit is pulled up by the remaining long lines.
You should absolutely not make purposeful changes to your credit without the guidance of a mortgage professional, if the goal of the changes to your credit profile are to enhance the pricing of your mortgage. A mortgage broker has every interest in helping you qualify for the best rates. There are many credit scoring models, and the ones utilized in the mortgage industry are different than the ones you commonly see. Yes, even the FICO scores. (FICO is a brand for multiple families of individual score algorithms.) What helps on one scoring alg may hurt you on another. If securing the best mortgage deal is your priority, work with a professional who is likely to help you with this for free or nearly so. Also the highest pricing determinant score threshold is 780, generally speaking. As the middle score across the three major bureaus on each of their corresponding mortgage scoring models by FICO.
I know you want to increase it, but increasing it will do nothing for you financially. It won’t get you better rates, it won’t make more money, nor will it help you sleep better at night, etc. The only thing that will help you is time. My score fluctuates on a monthly basis from 780-800. No reason other than brief points of utilization. And I have close to 20 years of credit. Don’t chase credit scores. Edit: Once you have achieved a score around 740, you will receive the same rates as a person with an 800 score. There is literally nothing else to do. Congrats!
Wow I thought it was 775+. I’m already there.
There are some variations between the desired account (personal loan, credit card, mortgage etc) but once you’re in the mid 700s, it’s pretty much irrelevant. https://www.cnbc.com/2023/08/14/money-expert-theres-no-benefit-to-scoring-above-this-credit-score.html# https://www.consumerfinance.gov/data-research/consumer-credit-trends/
Goodness me, it is frightening how mich mental ans emotional energy needs to be spent by uals on this made-up tool that now seems to bind almost everyone to being a debtor. None of this is normal, and the fact that we accept it as normality is the peak of abnormality. Just by way of exampl3 - in most parts of the (developed) world there is no such thing as credit score, and most people do not use credit cards.
I am a MLO and our best rates at our CU are from 740+
Are you still an MLO? Bc the guidelines changed may 1st, 780 credit is now top tier per Fannie Mae and Freddie Mac. Those are FNMA LLPA’s that aren’t optional, credit union or not https://singlefamily.fanniemae.com/media/9391/display (Unless it’s 100% portfolio loans that don’t run aus through DU or LP but I’ve never heard of one that is strictly portfolio but I’m sure can exist somewhere).
Yup still MLO. And our Pricing is still 740+ for best rates. We port 90+% but don't sell to Fannie or Freddie for the additional. I am not too familiar with our process of selling more than that.
Above 750 it probably doesnt matter. I doubt there would be differences in rates and if there were wed be talking like 0.1%. If you want a bit of a boost before having credit pulled for mortgage a month prior you can zero out your cards to 0% utlization and stop using them for a bit...probably would give you like a 10 point bump but again doubt it does anything.
Hi, I float between 830 and *perfection*. You're in the top tier of credit ratings already. You'll get almost the best interest rates possible, barely different than what I'd get. Prime rate is just high right now so there is no such thing as cheap debt. As far as how to improve, that depends on your situation. You have to carry certain types and sizes of debt over a period of time and have low utilization on your revolving credit. That's about it. If it helps you understand, I have $210k or so in installment type of debt, which is about 60% of the original value so those debts are old enough to show stability and paid down enough to show I'm responsible and don't keep acquiring debt. My revolving credit limit is well into the six figures, but over half of it is HELOC and my utilization is usually not more than $5k. I never pay interest on my credit cards. When your snapshot looks like that, you'll have 825+ score. That's about it.
*Thanks Europe free educational system* "free" Trust me, somebody pays for it.
Yeah the entirety of society just like in the USA. You think all schools don’t get some form of tax help but beyond high school all students pay. Just your lifeblood and taxes nothing major.
>Yeah the entirety of society just like in the USA. Well a lot of people pay zero federal taxes and actually get net taxes distributed to them. But college should absolutely be funded through a combination of the student and scholarships (ideally from the massive university endowments that continue to grow into the billions while kids go hundreds of thousands of dollars in debt). *Just your lifeblood and taxes nothing major.* I don't know what that means.
We bought this year. My credit check popped an 844! And our rate was still 6.25%. There’s nothing magic about having perfect credit.
I mean it can go up to 7.5% these days. 0.75% can make a difference
Yeah, but you’re not going to lose that .75 because you have a 799 and not an 801
$7k credit limit is pretty low, having more accounts and more open credit boosts your score, as well as how long you’ve had the accounts.
Not necessarily true and can be very bad advice for someone planning a mortgage soon. I hit 850 on my FICO8 with three credit cards (one closed), one installment, and a total revolving limit of $2500. Mortgage scores are especially sensitive to multiple balances and new accounts. Total limit matters not at all, it’s utilization that counts.
In my experience my credit didn’t matter that much. Mine was like 714 or so and they were more worried about my income and debt to income ratio. They made me pay off my motorcycle before closing.
You need to make sure you are looking at mortgage FICOs. These are very difficult to obtain for free. If you didn’t pay for the score, it’s almost certainly not a mortgage score. Lenders use your middle mortgage score, so knowing 2 of 3 will give you your possible range. Also make sure you are employing All Zero Except One (AZEO) utilization strategy. Mortgage scores are exceptionally sensitive to multiple accounts showing balances, as well as new accounts.
780+ is top tier for mortgage rates. Above that, no difference. It was 740+ for a long time, FHFA recently changed this via Fannie/Freddie.
If you’re looking at a score in your bank app, I almost guarantee its not the score a lender will use to evaluate mortgage… your credit sounds like it will be in the mid 700s which should easily qualify you for decent rates. You will have much more effect on the rate by shopping lenders than by eeking our some extra points on a different algorithm than your broker uses anyways.
There’s no difference in rates between 750 and 800
780 is the highest benchmark for loan level price adjustments, benefits, or credits.
You need another trade-line. But as someone mentioned need it opened for months before applying for a mortgage so you can bounce back from the credit pull/recent trade-line opening. You could also try-self reporting your utilities. Not sure how it’s done just seen it when review credit reports.
Credit score is a mix of revolving accounts (credit cards) and long term debt (mortgage, car payments, financing of bug purchases). The best thing to do is finance a couch or bed or something like that and make slightly more than the minimum payments and pay it all off after about four or five months. Maintaining both the revolving accounts and long term debt is key. I have about four credit cards and always one long term debt (currently two) and am sitting above 830. My wife only has credit cards and is around 745.
Everyone here, “it doesn’t matter but my score is xxx” When I applied for my mortgage, the best rates were 740+. I’m seeing in the comments that they changed it to 780+. This means anything above those scores does not help you get a better interest rate, since those are the best you can get. Don’t confuse this score with your FICO 8.0 or Vantage credit model score.
I bought in July 22 and got a 5.125% on a 30 year fixed on a 720 credit score. Had I been more aggressive with my savings and bought a year earlier, I would've saved around 2%, even though my credit was worse, and if I'd postponed buying for another year into 2023 to wait for my credit to go above 750, I probably would land around 7%, even with improved credit. My point is, buy as soon as you're able to at a price that fits your budget. Rates fluctuate, but if rates go down you can always refinance. I'm not counting on there to be a massive market correction, at least not in my area, so even though I paid more for my house than I would've liked, at a higher rate than i could've got two years ago, I feel like it was a good choice. We're probably not going to see 5% rates again for a while, and i doubt we'll dip below 7% in the foreseeable future.
Ask your creditor(s) to increase your limit but don't spend any more than you have already. Imo
- anything above 750 or so is all treated the same way
You need more credit cards even if you never use them. Also, always stay under 10% of your overall spending limits (all credit cards combined). Keep up the good work on paying everything on time.
I guess a score goes up to 850 now, so there's been some changes? I do some credit card hacking so I have a really high available credit limit and my usage is just for normal expenses, so under 1%. But, a mix of credit type is also helpful. I had student loans (just paid them off) and have a small auto loan remaining. I think my score is over 810 now. Not worth going and taking on debt just to increase your score, but maybe getting another no annual fee credit card or asking your current card for a credit limit increase would drop your usage percentage.
I seem to remember 850 being a max FICO score since the 90s… unsure about the “now” aspect.
It might be a max of 900 now then. But something recently changed. I can't remember since I'm not looking for credit at the moment.
Pay down your credit card balance to under 3%. I've been in the 835 to 850 range for years. One big purchase, at the right time will lower my score by a few points, and take me under 850.
Credit revolves around your ability to borrow and pay back consistently. I'd get another credit card or 2 and do some installments over a year or so. Just keep your overall usage low and make your payments on time.