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what affects mortgage credit scores most?

I can pay off quite a bit in hopes of helping me obtain my mortgage. What is the best way to handle? Pay off the collections? or pay on time and reduce debt?
  • October 10 2013 - US
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Answers (7)

I would strongly suggest finding a lender that you feel comfortable working with and sitting down with that person to go over a plan of attack. Follow their instructions and suggestions because in the end that is the person that would be putting your loan package together. Good luck to you!
  • October 11 2013
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Usually lenders like myself recommend to pay off and reduce debt and to pay your revolving credit balance on time to fix your credit score. But what is your credit score as of now? Also, how many collections do you have and how much are in them? There are so many questions and details that are necessary in order to figure out whether or not you can get a loan. So I recommend you speak with a lender like myself to help you get the loan that best fits you. If you have any other questions or need a loan please contact me through the information on my profile page. I hope this helps and good luck!
  • October 11 2013
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Have you had your credit pulled by a lender recently?  Our reports (and many others) actually show the potential score improvement available, and I then use an online tool to calculate the benefits of paying down individual accounts.  Great feature, I just raised a client's middle score from 738 to 750 (getting him better loan pricing) simply by paying down a credit card that was over 50% of the credit limit.  If anyone has pulled your score, ask them if they have online tools to play with that report (and the balances on accounts) to see the effect on your scores.
  • October 10 2013
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Profile picture for CallTheSisters
Google free credit repair on the internet.  You do not need to pay anyone to help you.  Read the blogs and free instructions. There is a ton of good advice out there to follow.

Collections depending on what they are and how much may need to be paid off.

Reduce your debt but do not pay off or close any open lines of credit.  Keep the balance at 1/3 of the credit limit.  Keep making payments every month.

No late or missed payments for the 12 months prior to applying for a mortgage.
  • October 10 2013
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To improve your credit scores you need good credit over time.  Work on getting and keeping all your credit items paid in a timely manner.  Mortgage lenders have additional credit guidelines, in addition to qualifying credit scores, such as needing a specific number of active/open tradelines for a specific number of months.  Speak to a licensed mortgage person in your area to start the prequalifying process.  Good luck!

  • October 10 2013
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Pay on time and reduce debt. Try to keep your revolving debt below 30% of the approved credit limits.

Good Luck!
  • October 10 2013
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Ideally you want to be under 30% on your credit cards.  As for paying off collections it depends on what type they are.  Typically medical collections have little impact on your score paid or unpaid.  There are many companies out there that for the right price and let you know exactly what each action will do to your score.  I suggest you get a copy of your free credit report online and start taking out any negative items yourself.  You don't need to hire someone else to do it unless you don't have the time.
Best of luck!
  • October 10 2013
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