Long Term Score Raise

[MeganML84]

I know that I would like to buy a house between 3 and 4 years from now and am trying to do what I can to raise my score for the long term. This is my current EQ situation: 3 positive tradelines (closed small auto loan, bank overdraft line, LBAC auto loan), 1 negative tradeline (Cap 1 CC--one 30 day late that is waiting on a response to a GW), and a collection account that is disputed and in the process of being investigated. My EQ score is 622--I recently applied for an HSBC platinum mastercard and was approved for a $1K line. I did not lose any points from the INQ however the CC has not shown up yet.

My question is, should I go ahead and apply for another CC (I can *probably* get one through my bank, I have a very good relationship with them) now, or wait 6 months to get another one? I would like to have a long average history by the time I go looking for a mortgage and I am not too concerned with the score drop in the meantime. What is a good long-term plan to be in the 700s by 2010/2011?

Thanks in advance!

[John060675]

This is my opinion, but I would go ahead and apply for another CC.  The reason is that you are not planning to buy a house for 3 to 4 years, so the initial hit you will take in points for new accounts and inquiries will not be important.

Getting the other CC now will allow both to get out of the "new" condition, and it will show more credit responsibility.  This is my thought.

Good luck!

[Anonymous]

Per Fannie Mae's Credit Smart (which I teach) - 4-6 TLs total including any installment loans is optimum.  UTIL not over 30% (preferably under 10%). "PAYS AS AGREED" (no lates) for at least the last year (preferably 2 years).

Also, on any installment loans - anthing with less than 10 months to the life of the loan is not counted in your DTI.  So get any installment loans or at least the biggest 1 or 2 down below the 10 months left.  We did this with 2 car loans (paid them down to 9.5 times the monthly payment - $840/mo on one $240/mo on the other) and got the loan amount we wanted.  It was worth it to get the extra $1100/month room to househunt with (about $180K that we could add to the range).

[MeganML84]

I think I may just go ahead and apply for another one... I will wait until I get the results of my dispute with the CA back from EQ before I do anything though.

Also, ladyscarlet, that is good news to me because in about 3-4 years I will almost have my car loan paid off and hopefully I can time it to where I still have that positive, active tradeline but my DTI will be relatively small.

Thanks for the input!

Message Edited by MeganML84 on 09-24-2007 02:25 PM