650 Credit Score, Want to Purchase Home

[soup_can]

A friend of mine is struggling to get a mortgage. Her real estate agent claims that she needs her credit score to be 10 points higher. I wanted to ask here for advice on how to best obtain a mortgage for her. The details are from creditkarma.com:

She is divorced with four children. She works as a nurse. She has the 20% down payment for the house. Unsure of income.

Summary:
Credit Score: 664 Transunion, 650 Equifax
Payment History: 92%
Credit Care Use: 28%
Derogatory Marks: 0
Credit Age: 1 year 9 months
Total Accounts: 4
Hard Inquiries: 5

3 Active Accounts:
Credit Card 1
- $274/$1000
- 88% payments on time
- 2 years, 1 month

Credit Card 2
- $139/$500 balance
- current
- 100% payments on time
- 7 months old

Account 3
- Child support, wage garnishment?
- 2 years, 7 months

What would you advise to raise her credit score?

1) Would closing Credit Card 2 increase her score or decrease?
2) She should ask to raise her credit limit on her two credit cards correct? Assuming that this does not result in a hard inquiry?
3) Would you recommend telling the credit card company that she is interested in raising her limits to purchase a house?
4) Are there any programs for nurses she can take advantage of?
5) Any other recommendations for something with bad credit?

[Detroittl]

Keep the cards. Pay down the balances so there is 1 percent use at any given time. In a month or two it should jump 10 to 30 points.

[Detroittl]

In 4 months I bet it’s an even 700

[celia]

Increase that payment history to 100% by paying all bills in full by the due date.

It also looks like her credit history is less than 2 years old. Making prompt payments for a longer time should also help.

[bayview]

Increase that payment history to 100% by paying all bills in full by the due date.

It also looks like her credit history is less than 2 years old. Making prompt payments for a longer time should also help.

+1

Tell her not to open any new accounts for a while, and just stay on top of the ones she has,

While doing that, she should be building up her emergency fund, along with a new-homeowner-headache fund. (Or combine the two, knowing that she WILL have to write out checks for some surprising things in the first half-year or so.)

[HomeStretch]

Your friend can set up autopay for monthly payment of each credit card/loan’s minimum balance or full balance. This will insure all payments are made on time going forward.

She can make multiple payments per month on credit cards to keep her credit utilization low.

[Nestegg_User]

credit utilization along with a very short history would mean that it'll take a while for increase in score. The low limits also are a cue that she might not be a good credit risk yet... hence I'd suspect that mortgages would be hard to get, although the 20% down should help.

[michaeljc70]

Derogatory Marks: 0
...
88% payments on time

If she made 12% of payments late on one account, that is a derogatory mark. As others said, time with making all payments on time is the thing that will help her. She should be able to see a trajectory of her score if she checks a free site monthly.

Most conventional mortgages require a 620 credit score so maybe she should talk to a lender and not rely on the real estate agent. She may need a higher score though depending on other factors like income to loan value.

She has 5 hard inquiries and that is a lot and brings down your score. She should not keep having her credit run.

[Rob5TCP]

There are several sites where you can do "what if" scenarios.
What if I cut my balance on my cards to 15%; what if I pay on time for the next 6 months.
It's not perfect, but it is useful. In your current situation,
as stated by others probably the best options would be lowering the balance owed
and having all payments the next few months be on time.