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New Member
kkirkham7
Posts: 2
Registered: ‎01-14-2013
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Credit Card Help!!! Advice Please!!!!

I am currently in the process of buying a home.

 

I do not have a lot of credit but my average FICO is 675.

 

I have been approved for my mortgage, but I need/ would like to obtain a credit card with a decent limit.

 

Right now I have two small credit cards that are basically useless because if I charge something on the card my balance becomes too close to the credit limit.

 

I am nervous to apply for a card since I have 6 inquiries on my report. (Three are from the mortgage prequalification process)

 

Will applying for a credit card adversly affect my score and put me in jeopardy of losing my qualification for my mortgage?

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newportguy
Posts: 351
Registered: ‎11-11-2012
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Re: Credit Card Help!!! Advice Please!!!!

[ Edited ]

I would wait until  my Mortgage was final before apping for the CC. When i got my Mortgage my score went up a few points


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jamie123
Posts: 782
Registered: ‎03-22-2012
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Re: Credit Card Help!!! Advice Please!!!!

STOP RIGHT THERE!

 

Do not apply for any new credit until the day after your house closes!

 

Yes, your scores might decline if you apply for new credit. Yes, the decline in your scores right now could cost you your mortgage loan.

 

You want a minimum of 6 months between the last time you applied for credit and appying for a mortgage loan, a year is even better.



Starting Score: EQ 658 6/18/12
Current Score: EQ 683 8/24/14 - EX 687 7/21/14 - TU 682 7/21/14
Goal Score: EQ 720+
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09Lexie
Posts: 25,097
Registered: ‎09-13-2012
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Re: Credit Card Help!!! Advice Please!!!!

Valued Contributor
bs6054
Posts: 1,673
Registered: ‎11-11-2012
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Re: Credit Card Help!!! Advice Please!!!!


jamie123 wrote:

STOP RIGHT THERE!

 

Do not apply for any new credit until the day after your house closes!

 

Yes, your scores might decline if you apply for new credit. Yes, the decline in your scores right now could cost you your mortgage loan.

 

You want a minimum of 6 months between the last time you applied for credit and appying for a mortgage loan, a year is even better.


While good advice in general, it is overly broad.   If you have good credit and a fairly long history, a few inquiries won't hurt.  But

 

a) be prepared to explain all inqs on your report, in particular, was a new credit line granted

b) (as said above) once you have applied and been accepted for the mortgage, don't apply for anything at all until after closing (and any recision period for refinancing).

 

Nervous lenders may pull a credit report at closing, looking for any issues, and at least in my state, at closing you are asked to disclose material changes in financial status.  A new credit line might not meet that level, but why take a chance.

Senior Contributor
drkaje
Posts: 3,491
Registered: ‎07-25-2008
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Re: Credit Card Help!!! Advice Please!!!!

@ jaimie123,

 

I gotta know right now! :smileyhappy:


Starting Score: 675
Current Score: EX 754 FICO, EQ 737FICO
Goal Score: 776 FICO


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Revelate
Posts: 8,896
Registered: ‎12-30-2011
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Re: Credit Card Help!!! Advice Please!!!!

[ Edited ]

bs6054 wrote:

jamie123 wrote:

STOP RIGHT THERE!

 

Do not apply for any new credit until the day after your house closes!

 

Yes, your scores might decline if you apply for new credit. Yes, the decline in your scores right now could cost you your mortgage loan.

 

You want a minimum of 6 months between the last time you applied for credit and appying for a mortgage loan, a year is even better.


While good advice in general, it is overly broad.   If you have good credit and a fairly long history, a few inquiries won't hurt.  But

 

a) be prepared to explain all inqs on your report, in particular, was a new credit line granted

b) (as said above) once you have applied and been accepted for the mortgage, don't apply for anything at all until after closing (and any recision period for refinancing).

 

Nervous lenders may pull a credit report at closing, looking for any issues, and at least in my state, at closing you are asked to disclose material changes in financial status.  A new credit line might not meet that level, but why take a chance.


While I agree it's overly broad, I do think this should be lumped under the cliche of "show a bureaucrat what they're expecting to see."

 

Sure, if you're gold plated it doesn't really matter in the current market as banks will be throwing money at you; however, for the OP and the vast majority of people, it doesn't make much rational sense.  If it drops you down a tier, and you're stuck paying even a fractionally higher interest rate, there's no credit card on the planet that's worth that, and that's just the FICO score case.

 

For underwriting, at least previously they used to ask for six months bank statements for W2 employed individuals is my limited understanding of it; I think six months of a stable credit report is a reasonable expectation for anyone seeking a mortgage (really should be trying to put all your ducks in a row regardless of who you are) to refrain from applying for a new credit card until they close.

 

There's very, very few exceptions to this, and actually I'd suggest it's the thin files which the advice may not apply to (1-2 revolving tradelines being a straight boost to FICO's mix of credit function), rather than even the gold-plated folks.  

 

Between the boundaries of 640-720 with at least two revolving tradelines, I'd simply recommend sitting absolutely tight for at six months, and as a prior poster suggests, a year is reasonably better... and there's no blanket exception to anyone who doesn't meet that criteria either.

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
Current Score: EQ 04 679, EQ 8 708, TU 711, EX 702* (07/14/14, EX older)
Goal Score: 700 on EQ '04 (01/01/15)


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Valued Contributor
bs6054
Posts: 1,673
Registered: ‎11-11-2012
0

Re: Credit Card Help!!! Advice Please!!!!


Revelate wrote:

bs6054 wrote:

jamie123 wrote:

STOP RIGHT THERE!

 

Do not apply for any new credit until the day after your house closes!

 

Yes, your scores might decline if you apply for new credit. Yes, the decline in your scores right now could cost you your mortgage loan.

 

You want a minimum of 6 months between the last time you applied for credit and appying for a mortgage loan, a year is even better.


While good advice in general, it is overly broad.   If you have good credit and a fairly long history, a few inquiries won't hurt.  But

 

a) be prepared to explain all inqs on your report, in particular, was a new credit line granted

b) (as said above) once you have applied and been accepted for the mortgage, don't apply for anything at all until after closing (and any recision period for refinancing).

 

Nervous lenders may pull a credit report at closing, looking for any issues, and at least in my state, at closing you are asked to disclose material changes in financial status.  A new credit line might not meet that level, but why take a chance.


While I agree it's overly broad, I do think this should be lumped under the cliche of "show a bureaucrat what they're expecting to see."

 

Sure, if you're gold plated it doesn't really matter in the current market as banks will be throwing money at you; however, for the OP and the vast majority of people, it doesn't make much rational sense.  If it drops you down a tier, and you're stuck paying even a fractionally higher interest rate, there's no credit card on the planet that's worth that, and that's just the FICO score case.

 

For underwriting, at least previously they used to ask for six months bank statements for W2 employed individuals is my limited understanding of it; I think six months of a stable credit report is a reasonable expectation for anyone seeking a mortgage (really should be trying to put all your ducks in a row regardless of who you are) to refrain from applying for a new credit card until they close.

 

There's very, very few exceptions to this, and actually I'd suggest it's the thin files which the advice may not apply to (1-2 revolving tradelines being a straight boost to FICO's mix of credit function), rather than even the gold-plated folks.  

 

Between the boundaries of 640-720 with at least two revolving tradelines, I'd simply recommend sitting absolutely tight for at six months, and as a prior poster suggests, a year is reasonably better... and there's no blanket exception to anyone who doesn't meet that criteria either.


I'm not saying that you SHOULD go and get new credit lines before a mortgage, just, like a lot of advice here, it may well be overly cautious.  In particular, if someone has applied for a credit card for whatever reason, and then considers getting a house, they shouldn't always think," I need to wait 6 months or a year", because movements in the housing market and mortgage rates can outweigh any score-based changes in rate, and anyway a single inq doesn't always impact score much either.

 

For my most reason mortgages, only 2 months of bank statements were needed.  Don't ever remember needing 6.

Senior Contributor
Walt_K
Posts: 3,065
Registered: ‎11-02-2009
0

Re: Credit Card Help!!! Advice Please!!!!


bs6054 wrote:

Revelate wrote:

bs6054 wrote:

jamie123 wrote:

STOP RIGHT THERE!

 

Do not apply for any new credit until the day after your house closes!

 

Yes, your scores might decline if you apply for new credit. Yes, the decline in your scores right now could cost you your mortgage loan.

 

You want a minimum of 6 months between the last time you applied for credit and appying for a mortgage loan, a year is even better.


While good advice in general, it is overly broad.   If you have good credit and a fairly long history, a few inquiries won't hurt.  But

 

a) be prepared to explain all inqs on your report, in particular, was a new credit line granted

b) (as said above) once you have applied and been accepted for the mortgage, don't apply for anything at all until after closing (and any recision period for refinancing).

 

Nervous lenders may pull a credit report at closing, looking for any issues, and at least in my state, at closing you are asked to disclose material changes in financial status.  A new credit line might not meet that level, but why take a chance.


While I agree it's overly broad, I do think this should be lumped under the cliche of "show a bureaucrat what they're expecting to see."

 

Sure, if you're gold plated it doesn't really matter in the current market as banks will be throwing money at you; however, for the OP and the vast majority of people, it doesn't make much rational sense.  If it drops you down a tier, and you're stuck paying even a fractionally higher interest rate, there's no credit card on the planet that's worth that, and that's just the FICO score case.

 

For underwriting, at least previously they used to ask for six months bank statements for W2 employed individuals is my limited understanding of it; I think six months of a stable credit report is a reasonable expectation for anyone seeking a mortgage (really should be trying to put all your ducks in a row regardless of who you are) to refrain from applying for a new credit card until they close.

 

There's very, very few exceptions to this, and actually I'd suggest it's the thin files which the advice may not apply to (1-2 revolving tradelines being a straight boost to FICO's mix of credit function), rather than even the gold-plated folks.  

 

Between the boundaries of 640-720 with at least two revolving tradelines, I'd simply recommend sitting absolutely tight for at six months, and as a prior poster suggests, a year is reasonably better... and there's no blanket exception to anyone who doesn't meet that criteria either.


I'm not saying that you SHOULD go and get new credit lines before a mortgage, just, like a lot of advice here, it may well be overly cautious.  In particular, if someone has applied for a credit card for whatever reason, and then considers getting a house, they shouldn't always think," I need to wait 6 months or a year", because movements in the housing market and mortgage rates can outweigh any score-based changes in rate, and anyway a single inq doesn't always impact score much either.

 

For my most reason mortgages, only 2 months of bank statements were needed.  Don't ever remember needing 6.


 

I completely second that the OP should not apply for a credit card right now.  There's no reason to do so.  But building on bs6054's comments above, those that may have already applied for new credit before having found these forums need not always despair.  The trimerge reports that lenders pulled when I was applying for my mortgage only showed inquiries within the last 3 months.  Of course, I understand that is not always the case. 


 


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


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New Member
kkirkham7
Posts: 2
Registered: ‎01-14-2013
0

Re: Credit Card Help!!! Advice Please!!!!

Thank you, this really helped me! I'm glad I asked the question before making a decision. 


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