hello! I have been lurking around for a while, you guys have great information. My question is about buying a home. MY BK chapter 7 was discharged October 2011, I am one year out and have the following:
Cap1 with $500 CL (started October 2011)
Cap1 car loan for 10k (started June 2012)
and just recently I applied for and was approved for two more cards
Cap1 rewards $1000 CL (Oct 2012)
Credit1 CL $300
My question is, do I need any more credit? I know I need to keep my total usage under 10%, but is the 1800 plus the car loan enough to show that I can manage it? My goal is to buy a home next October at the end of my two years post discharge....
You should be fine. You have demonstrated revolving and installment loans, and a comfortable number of trade lines.
Just keep your utilization below 20% (maximum ...) and PIF each month if possible. Religiously, and I do mean religiously, make your payments on time.
3 to 6 months (6 months is ideal) out from your planned mortgage application date, stop applying for new credit. You want the mortgage lender to see established lines with a healthy payment history and low utilization, along with low to no inquiries for the 6 months preceding the app.
Do that and your chances of being approved will increase. Just don't get discouraged if lenders decline to buy the mortgage. a BK is toxic, and that may slot you into less than prime lenders & rates, but anything can be done with enough work and diligence. Just stick with this and live the lesson that it teaches about managing debt.
Thank you! I think since I have those three cards, I am done applying for anything. Im praying for that last 70 points to come over the next year with good payments and low utilization. I appreciate the advice.