Post Ch. 13 discharge, should I apply for a 2nd card or wait until after I apply for a mortgage?

[Anonymous]

I am 2.5 years post-discharge on a Ch. 13.  I have a student loan, an auto loan, and a secured card from PNC that I've had for about 2 years, everything paid on time.  I'm planning on applying for a mortgage in the Spring, but I feel like I might need one more credit card on my report first.  (Income: 90k, Score: 733)   If I'm planning on buying a home (assuming I can get approved) should I just hold off on a credit card application?  Or, if I apply for the card now and wait at least 6 months to apply for the mortgage, will I be ok?  Any advice?

[Anonymous]

Hi Bosrich,

IME, you'd be fine apping for a second card.

When DH and I were about 6 months post discharge, we opened a new mortgage.  We had several cards less than 60 days old (we weren't planning on doing the mortgage for another year).  It was a non-issue.  It seems that for rebuilders, you're just not going to get that big point dip with a new card - others with a "fatter" credit file will often see some significant score damage when apping and opening new accounts.

And, at any rate, you're about nine months pre-app timing, so you're in fine shape - but even more so because you're a rebuilder.  I believe having a second card will be a benefit to you even if you were apping as soon as the next couple months.

Did you decide which card to app for?

[Anonymous]

Thanks for the good info.  I feel more comfortable with the card attempt.  However, based on my lack of prequal. online, I'll probably look at one of the Barclays options.   Thanks for the advice there as well.  I'll let you know how I do.  Thanks.

[chasmith]

Witha score like yours why not look into a Credit Union?  You may be able to get an unsecured card with a better limit and low or no fees through a CU.

I agree, it seems that the "best" posture is two or three credit cards, total utilization below 10%, no individual card at or above 10%, and try to have "more than half" the cards report zero balances.  I try to rotate which cards report zero to keep limited activity on each to keep them open.

[Anonymous]

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@chasmith wrote:

utilization below 10%, no individual card at or above 10%,

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I agree with chasmith - it's definitely helpful to keep that utilization down if you're watching FICO points (or just to stay in the good graces of your CC issuer, for that matter).

For many folks (me & DH included) we find the general mantra of keeping utilization below 9% to work best - it's definitely a YMMV thing.  DH sees FICO point drops when he hits 10% utilization on an individual card, but not when he's at 9%.  Remember utilization rounds up, so 9.0001% reports as 10% utilization.