ADVICE NEEDED: Which card or cards should I apply for?

[wmweeza]

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@tcbofade wrote:

If you're looking for a mortgage in the Spring, I wouldn't apply for anything right now.

It's not life or death, but you may have to provide a written explanation for every credit inquiry in the six months proceeding your mortgage app. 

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I have to agree with tcbofade. I'm applying for our next mortgage in April or May and refuse to apply for anything or charge too much. I'm staying the course so my profile looks rock steady to the bank mortgage underwriters. Will it ding your scores horribly? Depends, could be 3 points, could be 9, but either way you don't want to seek out more credit and then 6 months later ask for $200-300k for a house, it might spook them about your risk

[wmweeza]

I think the issue isn't just utilization and paying off items at a better rate, the main issue to banks would be them seeing you pay off your existing debts instead of rolling them into a new card. If it were me I would have started that process at least a year ago if that was your goal, but then again I'm financially conservative

[austinguy907]

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@Anonymous wrote:

Current credit score is 693 (Equifax)-- Transunion and Experian are a bit lower (in the 670ish ranges), I have a few collections (mostly medical and small, plus one for $4k from unpaid legal bills that I hope to remedy shortly) and a judgement that's due to fall off in March 2017. No lates in nearly 4 years. Income in the $90Ks (mine) and close to $150K (with my husband). The last few years have been ROUGH financially, hence the maxed out credit cards.

So, I have only 2 credit cards-- a Discover with a $19K limit and a $17K balance and an Amex with a $2K limit and a balance that hovers around $1K (my overall utilization is under 50% as I'm an authorized user on two of my dad's credit cards that have approximately $20K credit lines that he isn't using). 

I was just given an offer from Discover to get a cash advance at either 0% for 9 months (with a 3% fee) or 5.99% for 18 months with no fee.

I have just enough cash in savings to pay off the current balance on the Discover card and  in the moment that I have reduced my credit utilization to ZERO-- I'd like to both apply for an additional credit card(s) as I know that with maxed out lines, I won't qualify even with decent-ish scores. Plus paying off my card should theoretically boost my score to solidly over 700. 

Once I qualify for new cards, I'll (almost) immediately turn around and take the cash advance  to replenish my savings with the 5.99% offer and then I hope to pay that credit card off with my next few bonuses and/or as we have two paid off cars, I might borrow against one or both cars (at 2ish%) to pay off the credit cards and further reduce our payment.

WHICH credit cards should I apply for? 

Thank you SO much, in advance, we're hoping to buy a house in the spring and this gives me an opportunity to get our scores WAY up-- I don't want to screw it up!

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First of all I wouldn't be worried about applying for anything looking through your intial posting.  You're juggling things and thinking about a mortgage?  Let's start out with the best case scenario and go from there.

These collections/judgements are going to be an issue in getting approved for your mortgage depending on what lender you go through. You should be working on these instead of trying to get some new plastic in your pocket.

You have 89% utilization on your Discover card currently with your $17K balance!  This is killing your scores besdies the collections and judgements.

You should ideally get your utilization on any LOC / CC under 10% to maximize your scores for when you do decide to get a mortgage.  Ideally for the best rates you're needing to target 740-760.  You mentioned 2 lines of credit befween Discover and Amex which will both grow with you and only SP for CLI's...... This might be your saving grace if you can get your balances down and reporting (~30 days  for CRA updates) for the maximum CLI opportunities with both of them.  I don't know the age of your Amex but, with the 3X CLI option you could bounce that up to $6K and 6 months from then possibly up to $18K with another 3X.  This would give you a pretty good cushion for once you need to spend on the new house stuff that comes up once you move in and start finding things to fix up or change.  

Now onto this whole pay it off and take it back out in red.... This will raise flags with any lender if they probe back far enough to catch it or see the high fluctuation on your CRA's when starting the application process with them.  Pyramiding and shuffling debts before going into such a large transaction isn't a good idea unless you want them to perform a colonoscopy on your financial body.

Pay it down, leave it down, don't do a Cash Advance, throw your bonuses and such into your savings.  I wouldn't worry so much about the cars unless you have huge payments on them as it'll count against your DTI calculations which could reduce the purchase power you'll have when going out to look at housese.  If you do have a higher than you'd like payment then I would just Refi to bring them down to where you would qualify for what you're looking for.  I've been through this process several times at this point with a couple of mortgages and mortgage refi's.  This isn't something you want to mess with like poking the bear when it's sleeping.  

Since you're married I'll assume your other half has a couple of CC's as well for credit history?  The only reason I bring this up is when you both apply they'll be looking for at least 3-5 credit lines with 2 years of payment history in the underwriting criteria as a baseline.

[SouthJamaica]

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@Anonymous wrote:

Current credit score is 693 (Equifax)-- Transunion and Experian are a bit lower (in the 670ish ranges), I have a few collections (mostly medical and small, plus one for $4k from unpaid legal bills that I hope to remedy shortly) and a judgement that's due to fall off in March 2017. No lates in nearly 4 years. Income in the $90Ks (mine) and close to $150K (with my husband). The last few years have been ROUGH financially, hence the maxed out credit cards.

So, I have only 2 credit cards-- a Discover with a $19K limit and a $17K balance and an Amex with a $2K limit and a balance that hovers around $1K (my overall utilization is under 50% as I'm an authorized user on two of my dad's credit cards that have approximately $20K credit lines that he isn't using). 

I was just given an offer from Discover to get a cash advance at either 0% for 9 months (with a 3% fee) or 5.99% for 18 months with no fee.

I have just enough cash in savings to pay off the current balance on the Discover card and  in the moment that I have reduced my credit utilization to ZERO-- I'd like to both apply for an additional credit card(s) as I know that with maxed out lines, I won't qualify even with decent-ish scores. Plus paying off my card should theoretically boost my score to solidly over 700. 

Once I qualify for new cards, I'll (almost) immediately turn around and take the cash advance  to replenish my savings with the 5.99% offer and then I hope to pay that credit card off with my next few bonuses and/or as we have two paid off cars, I might borrow against one or both cars (at 2ish%) to pay off the credit cards and further reduce our payment.

WHICH credit cards should I apply for? 

Thank you SO much, in advance, we're hoping to buy a house in the spring and this gives me an opportunity to get our scores WAY up-- I don't want to screw it up!

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I think it's premature for you to try to figure out which cards at this point.

First you should have your Discover card report with a $1000 balance and your American Express card report with a zero balance. I expect that to bring your scores up significantly.

Then see what your scores are.

Then come back to us, tell us (a) your new scores, and (b) exactly what kind of card you would like to have... and then we can give you some advice.

BTW I will never advise you to have your credit cards basically maxed out, while having enough money in the bank to pay them off. I would never do that.

[SunriseEarth]

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@Anonymous wrote:

Current credit score is 693 (Equifax)-- Transunion and Experian are a bit lower (in the 670ish ranges), I have a few collections (mostly medical and small, plus one for $4k from unpaid legal bills that I hope to remedy shortly) and a judgement that's due to fall off in March 2017. No lates in nearly 4 years. Income in the $90Ks (mine) and close to $150K (with my husband). The last few years have been ROUGH financially, hence the maxed out credit cards.

So, I have only 2 credit cards-- a Discover with a $19K limit and a $17K balance and an Amex with a $2K limit and a balance that hovers around $1K (my overall utilization is under 50% as I'm an authorized user on two of my dad's credit cards that have approximately $20K credit lines that he isn't using). 

I was just given an offer from Discover to get a cash advance at either 0% for 9 months (with a 3% fee) or 5.99% for 18 months with no fee.

I have just enough cash in savings to pay off the current balance on the Discover card and  in the moment that I have reduced my credit utilization to ZERO-- I'd like to both apply for an additional credit card(s) as I know that with maxed out lines, I won't qualify even with decent-ish scores. Plus paying off my card should theoretically boost my score to solidly over 700. 

Once I qualify for new cards, I'll (almost) immediately turn around and take the cash advance  to replenish my savings with the 5.99% offer and then I hope to pay that credit card off with my next few bonuses and/or as we have two paid off cars, I might borrow against one or both cars (at 2ish%) to pay off the credit cards and further reduce our payment.

WHICH credit cards should I apply for? 

Thank you SO much, in advance, we're hoping to buy a house in the spring and this gives me an opportunity to get our scores WAY up-- I don't want to screw it up!

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I'd agree with the posts here that say not to apply for anything else right now if you'll be mortgage shopping in Spring.   I also think it's not a good idea to pay off your balance and then run it back up by doing a cash advance.  If something comes up and you absolutely need cash that you don't have in savings, at that time do the cash advance.  

As for your baddies, I highly recommend visiting our Rebuilding forum so that you can learn how to address those.  

I would also agree with those who suggested getting SP CLIs on your Discover and your AMEX.   Have you done a 3X CLI request yet on AMEX?   For Discover, if it's been more than 90 days since your last CLI, request once you've paid off the balance.