I have a relatively low fico score at 732 as of today. 30k I needed). At the time, I was told that my credit history was low because I did have no real estate loans. I told the loan officer that I got paid my home loan and I most surely had a home loan history. Unfortunately, it is no more counted within my credit history because the accounts is closed. Since that right time, I took the advice of the loan official and opened up some credit cards (I previously closed my last credit cards in 2005 and have been a debit card guy ever since).
I currently have 4 credit cards which I use on a monthly basis but pay completely and keep carefully the balance at zero. A friend of mine at work informs me that the only path to boost my score is to keep a little balance on each one of these cards. I really don’t want to do that.
I was under the impression that as long as I use the cards, they remain active on my credit file and hence, impact the fico score. Reasoning: I’m looking to buy rental property and this will require a new mortgage. I’m attempting to boost my rating to the perfect which may influence my borrowing capacity as well as getting the best rate. Any advice or answer to my friend’s statement (keep a balance or not)? I work in the home loan business. 740 is the most you could need to get their finest rate. Talk to an LO about this.
A fico score that high will never have an effect on your borrowing capacity. That is more dependent upon your personal debt ratios far, if you aren’t over increasing yourself, I wouldn’t get worried. Understand that CCs are unsecured, so these are more cautious about offering big lines of credit at first.
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Go back a season with a good pay history and they’ll up it. The presssing issue with the mortgage being lately paid is that you closed the accounts. FICO scores suffer when you close an account, however they will gradually go back up. Opening new accounts hits your fico also, if you haven’t already, don’t go opening up a bunch of bank cards.
Manual underwrites are foolish for your situation because you won’t require it and if you demand, your rate shall be higher for a manual underwrite. Your issue is not getting an approval, it is about getting the best rate. USUALLY DO NOT keep pulling credit to find out if its higher.