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mortgage applic. & credit score disclosures

Posted by tracey_b (My Page) on
Tue, Nov 24, 09 at 22:26

We're about to build and wanted to get pre-qualified so we'd be certain of our limits, etc. Anyway, hubby and I each received our credit score disclosures. They're both good, thank goodness (his better than mine, but weird since our names are joint on everything), but mine says this as to why it's less than the maximum score possible:

Too many inquiries in last 12 months.
No recent revolving balances.
Amount owed on revolving accounts is too high. (huh?)
Lack of recent installment loan info.

Who makes inquiries and how many is too many? I've not applied for, or bought anything requiring credit checks in a long while (except I guess when we leased the apt. in our new location).

We don't carry balances on our 2 credit cards, paying them off fully each month (so no revolving balances) and yet the very next statement says that "amount owed on revolving accounts is too high". Which is it? I don't get it.

Should I worry about this?

Thanks.


Follow-Up Postings:

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RE: mortgage applic. & credit score disclosures

Hi Tracy,

Should I worry about this?

In short; no.

Based on your statements, would I be safe in guessing your scores are in the mid to high 700's, or better?

The credit report software has to select 'reason codes' in a ranked format to justify the score being less than the perfect possibility... but the higher you get in your scores (the closer to perfect your credit) the more likely the software throws out "false negatives" simply because it has insufficient data to actually complain about.

You should be just fine.

Luck!
Dave Donhoff
Leverage Planner


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RE: mortgage applic. & credit score disclosures

re: "our names are joint on everything" - you should confirm this by looking at the detail of accounts. Many married couples unwittingly have listed their spouse as an authorized user instead of a joint account holder for credit cards. Because some people were abusing the authorized user designation to artificially inflate their credit score, that is generally no longer counted when computing credit.


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RE: mortgage applic. & credit score disclosures

We don't carry balances on our 2 credit cards, paying them off fully each month (so no revolving balances) and yet the very next statement says that "amount owed on revolving accounts is too high". Which is it? I don't get it.

At the time your credit was checked you probably had a high balance, but then when due you paid in full. This is why both are true statements.
I do this also, but have a high enough score I don't worry about it.


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RE: mortgage applic. & credit score disclosures

Thanks for the replies. I wasn't thinking when I said our names are jointly on everything (I was thinking credit cards, etc.)...except for some utilities when I set them up alone, it's just easiest to use my name only.

They told us 3 scores each, but I guess the one that counts is Equifax, and it was my lowest of the 3 at 794. If it can get better, would it be conducive to a better mortgage interest rate, or is it already good enough? We're building, so we have a few months. I guess I should go back to using checks or a debit card to keep our amount owed on credit cards from being "too high". In our relocation, it was just easiest to use a credit card.

Thanks!


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RE: mortgage applic. & credit score disclosures

Tracey,
For more loan programs underwriting will toss out the highest & the lowest, and qualify you based on the middle score (doesn't matter which bureau it is from.) When this is not the case, they toss the 2 highest, again regardless which bureau.

740 is the highest score that gets any considerable beneficial advantage... so, at the 790's (was I spot-on in my guessing or what!?!) you're beyond where any efforts matter.

Enjoy!
Dave Donhoff
Leverage Planner


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RE: mortgage applic. & credit score disclosures

Thanks for the info, Dave! That's one worrisome item I can now cross off my worry list :-)

I appreciate the help.
Tracey


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