I’m in the mortgage biz, below are some facts:
Some of the answers above are basically correct.
1) Your minimum payments showing on your credit report are what will be used for debt ratios. It should always match your most recent statement.
2) The credit card balance that shows on your credit report will be the last statement that was reported to the 3 credit bureaus. It could be one that printed one day ago or 30 days ago, (or possibly older)
3) The lender doesn’t know or care that you pay in full every month. Paying a credit card down or off may raise a credit score 20-40 points or more within several weeks. It depends on the % of that cards limit that you are using.
4) If the minimum payment is going to throw off a borrower’s debt ratios, it is usually possible to pay the balance in full through escrow and not have the minimum payment factored in the debt ratio. If more than $2000 is taken out of a refinance transaction, in most cases it is considered a “cash out” refi and you will pay a slighty higher rate for this loan. To avoid this, you can submit the funds to escrow.
5) Using a high % of credit limits on EACH CREDIT CARD is what can hurt you. If you have 5 cards with $5000 limits each, it is better to have $1000 on each card and making 5 payments than having $5000 on one card maxed out. (I understand that you pay yours in full)
6) If you want to raise your credit score you MUST use credit responsibly. Using a debit card is the MOST foolish thing that anybody can do. It does absolutely nothing for your credit score. Zilch, nada, zip. Doesn’t even show up on a credit report.
7) I do not believe that having too much credit penalizes people. I have seen credit reports with over $100,000 in available credit and near 800 scores.
8)Closing old credit card accounts hurts worse than closing accounts that were opened more recently. Part of your score is based on the age and history of an account.
9) There are programs that can predict how many points you can improve your scores by using various tactics. For a small fee, updtaed info can be submitted to the bureaus and updated within 24-48 hours to improve a score. It’s called a “rapid rescore” or similar.
10) It is normally ONLY your middle score of the 3 bureaus that is used to price a loan. The high and low are ignored.
It’s only a concern to raise the mid score to get a better loan. Scores above 680 today get better pricing than below 680.
11) There are different credit score models.
a)consumer score b)auto score c)mortgage score
IMO It’s a waste of money to pay for your score on the internet, you will probably get a consumer score, not your mortgage score.
12)A credit report is usually valid for up to 3 months, and will often not be re-run if submitted for a loan. Not all creditors report every account to all 3 bureaus which explains the variance in scores from them.
13) For a cost of less than $20 I can run a credit report that will give you your actual mortgage scores.
If you would like any help, you can get my contact info by doing a search for SHELDON in the search box on the left side of the screen. Let me know if you have any other questions or concerns.
