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If I found it in writing, would you believe it? Probably not. But, I can share with you the logic (oxymoron, I realize) behind the practice. A revolving card that is paid off monthly is not considered using credit. Credit is where you pay interest on money advanced to you. If you pay the balance off before interest is accrued, it's not considered credit. It's scored the very same as having a credit card that is not used. The credit reporting agencies provide training to loan officers and this is always one of the key points.
By telling someone to carry a balance on a credit card, we (loan officers) are not recommending you incur debt you cannot pay off, but to keep a small balance in the period prior to purchasing a home. Keeping a $50 - $100 balance may cost you a few dollars over a six month period, but it will save you thousands over the life of your mortgage when you are rewarded with a higher score.
After time, a satisfactory history of managing credit will not be dependent on what balances are on the credit cards. Remember, the OP was recovering from a delinquent mortgage payment, this is where everyone's mileage will vary. The biggest clue given, was he paid credit cards in full each month, which is not the most efficient way to raise a score quickly.
If I found it in writing, would you believe it? Probably not. But, I can share with you the logic (oxymoron, I realize) behind the practice. A revolving card that is paid off monthly is not considered using credit. Credit is where you pay interest on money advanced to you. If you pay the balance off before interest is accrued, it's not considered credit. It's scored the very same as having a credit card that is not used. The credit reporting agencies provide training to loan officers and this is always one of the key points.
By telling someone to carry a balance on a credit card, we (loan officers) are not recommending you incur debt you cannot pay off, but to keep a small balance in the period prior to purchasing a home. Keeping a $50 - $100 balance may cost you a few dollars over a six month period, but it will save you thousands over the life of your mortgage when you are rewarded with a higher score.
After time, a satisfactory history of managing credit will not be dependent on what balances are on the credit cards. Remember, the OP was recovering from a delinquent mortgage payment, this is where everyone's mileage will vary. The biggest clue given, was he paid credit cards in full each month, which is not the most efficient way to raise a score quickly.
Well, I can only say what I read elsewhere and what I also have seen with my own eyes on my own credit reports, as provided by the lender. The only way I can reconcile what you say with what I've seen is if different card providers handle things differently. I can say definitely that any of my credit reports I've seen - including lender-provided credit reports 7 months apart, have always accurately reflected my statement balance, which was always paid off in full the very next day after posting for over four years. As I said, prior to getting a home loan, I've never had anything other than credit cards active, which always had been paid in full immediately prior to obtaining a mortgage.
According to what you say, I should have had a really hard time getting a good interest rate. The opposite was true. Lenders were practically falling over themselves to get my business and offered all kinds of concessions.
Well, I can only say what I read elsewhere and what I also have seen with my own eyes on my own credit reports, as provided by the lender. The only way I can reconcile what you say with what I've seen is if different card providers handle things differently. I can say definitely that any of my credit reports I've seen - including lender-provided credit reports 7 months apart, have always accurately reflected my statement balance, which was always paid off in full the very next day after posting for over four years. As I said, prior to getting a home loan, I've never had anything other than credit cards active, which always had been paid in full immediately prior to obtaining a mortgage.
According to what you say, I should have had a really hard time getting a good interest rate. The opposite was true. Lenders were practically falling over themselves to get my business and offered all kinds of concessions.
You missed a key point I made. I gather you didn't have to make a "comeback," which is entirely different from someone with a derogatory event. Someone that has had such an event has a different path to follow to a higher score. The scoring models are stilted, making it twice as hard (or at least feel like it, maybe not quite twice as hard, but definitely more difficult) for these folks to recover, which is what I was referring to when I said, "remember, the OP is recovering from a delinquent mortgage payment."
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