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Making progress ... question on new credit line


andherewego
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I am making progress in my repair journey ... decided to buy a car even with the higher rate then refi later and saw a significant bump in my FICO almost immediately.  I've disputed with the big three reporting agencies and am waiting to hear back.  My question today relates to opening a new low limit credit card account.  I've paid down my open cards to about half the limit, planning to go even lower.  I'm wondering if another credit line would help at this point? Or might it hurt?  My available credit would still be quite small ...

 

Also, capone sent a letter about the disputed items requesting documents ... not sure how to respond?  My letter was to the reporting agencies not capone.

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I'll answer the last question first...when you dispute with the CRAs, they are supposed to contact the creditor.  It up to the creditor if they want to respond to the CRA...or contact you directly.  Either way, the TL should be marked "in dispute".

 

Now, are you looking at an actual FICO score, or one of the ones from the CRAs.  The CRA scores are bogus...FAKOs...nobody who's going to lend you money looks at those.  If you actually paid FICO for a FICO score, its the FICO Consumer Score which is closest to the FICO Bank Card score (the "sucker score")...the one that CCs use to determine who they will make money on.  If you ran up more debt and it went up, they've found another sucker.

 

Read my signature...

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Debt isn't an issue in this situation ... haven't had anymore debt than a mortgage for 2 years.  Needed a new vehicle anyway and I am very intentionally attempting to raise my FICO score.  I would like to move in a about 6 months and understand I will need to be around 650 to even be considered for a decent rate on a mortgage.  The FICO score I have is from myfico.com ...  

 

I have microscopic debt  ... I'm thinking a part of the reason for my low score is low use of credit over the past 5 years.  The main reason for my low score is that back in 08 I had some issues and settled 2 accounts, 3 more were charged off.  Haven't had any open lines at all till about a year ago ... other than the mortgage.  Good pay history on the big stuff, car, house.

 

I'd been advised that opening an account, buying groc/gas and paying it off each month would be helpful.

 

Do I need to respond to capone?  My understanding is that they need to provide documentation verifying their reporting ... not sure what I could say in that case.

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Here's the thing.  A mortgage underwriter is most interested in things that could result in legal being brought against you that may affect your ability to pay your house loan.  In other words, they're probably going to insist that the outstanding CO's be resolved before they'll approve a mortage.

 

As for needing a 650 score...remember, there are a bunch of different FICO scoring algorithms.  You can see your sucker score;  the people that financed your car saw the FICO New Car score (which really doesn't care about the same things as the sucker score); and, the mortgage company will see the FICO Mortgage Score.  Chances are your Mortgage Score is in the 500's because of the charge offs.

 

The "utilization" game does not help the Mortgage Score.

 

As for Crap One...exactly what documents are they requesting?

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If you're so inclined, you might go to www.FICO.com (not myFICO) and browse around.  You do have to be a FICO customer in order to get details, but there is a general discussion of the FICO 8 Mortgage Score which implies that in addition to the "normal" things that people think make up a FICO score, the mortgage score uses other data.

 

Also, the discussion does say that "available credit" and "outstanding balances" are taken into account, but does not say anything about how each contributes to the caculation.  And, nowhere is the term "utilization" used.

 

(BTW, you can also find a list of all the other scoring algorthims FICO offers).

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