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jjohns36 · Jan 4, 2006, 08:11 AM

I began cleaning up my credit about 8 months ago. The results have been great... except even though items have been deleted and paid off my score has not changed! It is my understanding the FICO score is fluid and changes as information on the credit report changes, but this has not happened. I'm confused. Any help and/or advice would be greatly appreciated.

RickJ · Jan 4, 2006, 08:17 AM

You are right to expect that it would change, but unfortunately the Credit Bureaus don't disclose the "formula" for how the scores change - and the score itself is not disputable.

[Yes, we're at their mercy! :( ]

Time is also an important factor in score changes: Scores will rarely go significantly up or down in a month or two month period - so give it a couple more months. If significant derogatory stuff has been removed recently, I'll bet you see a better score in a couple months.

jjohns36 · Jan 4, 2006, 08:31 AM

Thanks rickj! I feel better knowing the work I've done may not have been done in vain. I'll wait a few months and see what happens. Thanks again and HAPPY NEW YEAR!!

RickJ · Jan 4, 2006, 09:14 AM

You're welcome. Happy New Year to you, too!

Ver · Jan 4, 2006, 10:54 PM

Old items also do not affect your credit score as much as you think, by removing them, you present a shorter credit history which has more of a negative affect on your score than if you had left them on there. So you removed some items, which raised your score, but may have shortened your credit history, which in turn lowered your score right back to where it was.

jjohns36 · Jan 5, 2006, 07:34 AM

I'm trying to get a home mortgage loan within the next 6 months. I was advised to work on credit to increase the score for a better interest rate. With my score, I'm afraid I'll fall into subprime lending and risk losing the home because of high (high) interest. Do you think waiting to buy would be a better idea? I appreciate your response. Thanks!

Dr D · Jan 5, 2006, 10:45 AM

Conventional loans are more dependent on FICO scores than government loans (FHA or VA) in this age of automated underwriting. The lowest threshold for conventional is about 620 to get Approve Eligible from the computer. FNMA has Expanded Approval Levels I, II, and III for borrowers with less than ideal credit, income etc. The rates for these is about .5 to 1.5% higher than standard. They also offer a Timely Payment option (at an added cost for levels II and III), which reduces the rate after a two year satisfactory payment history. Government loans have more latitude on credit, allowing loans with high 500 FICO's. Also a human underwriter is able to over rule a computer turn down. Gov't loans can use "alternative credit", such as rent, utilities, car insurance to show creditworthiness. Continue your efforts to raise your FICO's and pay your other bills like clockwork (and save your documentation) just in case. I hope this helps to get your ducks in a row.

jjohns36 · Jan 5, 2006, 10:52 AM

This is great news because I am a veteran and am eligible to use the VA guaranteed loan program. I already have my certificate of eligibility! So, I'm wondering if it's okay to get a loan preapproval?

Dr D · Jan 5, 2006, 11:37 AM

You could do that, even if you don't plan to by for 6 months. It would be a good check to see if you have other issues such as income, job stability etc that need to be addressed. The exhibits that the lender collects, such as credit report, job verifications have a limited shelf life and might have to be updated, but so what. A VA loan is the best in the world for someone without big bucks. You can get in with zero down, and ask the seller to pay all of your costs. If they agree, your total move in can be ZERO; a sweet deal.

Good Luck