Six months ago my score was 680 w/a COLLECTIOn on my account. I disputed and removed it. Continued to "pay as agreed" on everything, refi'd some mortgages and today my score is ... 581!!?? WTF????? They say my credit ratio is too high but I have not upped ANYTHING on VISAS, etc. Could this be because first mortgages were paid off and rolled into better rate variable equity lines of credit? I'm panicked! I CANNOT have a 581 score - especially with no late payments anywhere on my report, but it seems I do. Did I screw up with that refi??? Do equity lines screw you - showing up as "revolving credit" and ruining the ratio or what???
Actually your score sounds about right. The revolving credit with the recent refi completely screwed up your FICO score. I hate to say it but whoever convinced you to go this route completely ruined your FICO scores for a long time. Even with perfect payment history your CL to balances are basically ruined for a long time. If your credit history is short compared to older people your FICO score is really going to be effected. I don't see any great credit card offers in your near future. I'm not trying to be negative but just realistic. This is what I would do if I was in that situation now. I would not worry about or try to get any more credit for a long time. I would also not pay any attention to your FICO scores at this point. Basically if you were to do another refi or whatever it would cost you to much short term money, which you probably already spent. I guess I would try and get your overall debt down as much as possible. Your mortgage broker basically did not tell you this and only cared about getting the deal done I bet. This is truly a sad situation and I feel bad for you. The good news though is that your revolving APR is probably pretty decent. I would just work ways over time to take care of this problem. There might be programs you could get into soon but if it cost you 100 points you might need some special financing to get it done. I really feel bad reading a situation like this! Maybe someone here can help you more! Come on VETS this SUCKS!!!!!!!!!!!!! Help here!!!
I am new at the home mortgage and equity game, but the way understand it is that an equity line of credit "looks" like you are completely maxed out of your available credit on your CR's, even though you are not. I am not sure how to rectify it though. This is something else that needs to be changed in the credit scoring scam.
I think getting variable equity lines of credit right now is a big risk. Mortgages are low. Interest rates will go up. Why would you want to put your interest rate at risk? Lock it in low. If I were you, I'd go refi and get the best 30-year fixed rate mortgage that I could get. That locks you into a low rate for 30 years. Take the money, pay off the equity lines, invest any that is left. Leave it alone. When interest rates are back up in the 8-9% range, you'll be sitting there with your low-rate payback making good interest on your investments. Of course, you may have trouble getting a mortgage at this point since your scores have taken such a dive.
The problem is that these are rental properties we own - the "credit system" doesn't seem set up to understand anything but "standard" lifestyles - i.e. one home, one second mortgage. These are two extra houses, both paid off, equity lines got us better rates and we CAN "lock in" at any point, or we can continue to double, triple, etc. the payments and enjoy a quick paydown under the low rates while they last. Since previous mortgages were 10 years old and reflected early 90's rates of 9 or more (on investment property even then "perfect" credit didn't get much lower than that) we felt this was a good move. Still do, just don't understand why "credit scoring" is such the accepted standard when just my one little situation shows it to be very flawed for anything but the most mundane and "standard" examples.
I could lock them in but would they then reflect on the report as an "installment loan" which they essentially would be? Or would they just become less flexible payment wise and still screw me score wise? My greater question might be why is there nowhere that we can discuss these things with a truly nonbiased "advisor" before making these kind of mistakes? Not getting credit "for a long time" is not really an option. My spouse is driving a 12 year old truck with 170k miles on it -- will it last another ten years?? I think not. Our mortgage broker has worked with us for many years - I don't think this was an intentional "screw 'em" on her part, rather that no one - not even "banking professionals" seems to have a frickin' clue how scores are going to be effected.
