How Can I Increase Middle Score?

Question

I need one more point to get 100% financing. Im one point short on the middle score that the mortgage officer lender requires. Should I negotiate a collection for 290 bucks or pay down two credit cards to raise my score? Any and all advice needed now. I would like to close this month.
Eddie.

Answer 1

When you pay an old debt, the negative credit listing doesn't disappear. In fact, it re-ages and the seven-year clock begins again with that negative listing. And, the most ironic thing is that a paid, current negative listing is not any better than an unpaid negative listing. That's not always true, but in most cases, you won't get much further by paying the old debt.

You must know who reports your middle score, and pay/down accounts that are reported by that paticular company. It wont help to pay down a credit account unless the comany providing that middle score reports that account. All accounts should list the companies reporting it. Example TRU/EFX/XPN means all 3 companies report that 1 account, the info can be found on the same line the account is reporting.

Answer 2

So you got the 579 blues huh?

I am a mortgage loan officer in the Carolinas. My advice is that you pay down a credit card (down to 30% or less of limit) instead of paying off old debts. Your score may go down by paying off the collection because you would have updated the date of last activity. I also recommend going to http://www.optoutprescreen.com and opting out from "prescreened credit offers." This removes you from the mailing lists that the major credit bureau SELL to credit companies. They claim that it does not impact scores, but I have done this with my clients and have seen almost a 20 pt increase at times! Just wait a week before repulling credit.

I would however recommend you prepare yourself for a next month closing unless you move quickly. Most companies report activity near the beginning of the month. The opt out site may help with a quicker turn.

If you are in NC or SC check out my website at http://www.DropRent.com for more advice and tips.

Good luck.
Ed

Answer 3

Your lender may be able to do a rapid rescore on your bureau. that is a gamble though. Credit updates up to 2 times per month and your score may go up or down. The best way to get it up is to pay off some debt. A collection account would be perfect.

Email me if I can be of any other specific advice