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Regular Contributor
Posts: 178
Registered: ‎04-30-2012
0

Re: When to apply? How do they decide if you get approved or denied?

I need to bring approximately $8000 cash to close.  It is already put aside and ready to go

 

Reserves are not needed

 

I am doing FHA with 3.5% down

 

What is the determining factor in deciding our available credit limit?  Our previous cards that are now closed had the following limits:

 

  • Capital One- $5000 limit
  • Wells Fargo - $2700 limit
  • Juniper Bank - $4000 limit
  • Home Depot - $4000 limit
  • GE Money - $ 2500 limit

So all in all, we had $18,200 in available credit back in the day.  Why would we only get low limit cards now when we have less debt and more income?  When could we get higher limit cards? 

 

I see no point in applying for low limit cards when we can pay cash instead.   I am looking at approximately a $7000 purchase for appliances and window treatments.

 

Thanks in advance for your answers!


Starting Score:2/1/16 565
Current Score: 3/1/16 575
Lender Mid Score: 3/1/16 575

Goal Score: 700


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Valued Contributor
Posts: 3,406
Registered: ‎12-19-2012
0

Re: When to apply? How do they decide if you get approved or denied?

Reason is because of all those late payments. CCCs will want to see that you can manage higher limit cards without late pays first. You are starting back at zero again. You will have to start with low limit cards, get credit limit increases over time, and apply for better cards in the future. Key is you HAD high limit cards. You don't anymore and banks will see that in the past, you didn't manage high limit cards well. So they will start you off in the baby pool to see how you do. Banks like Chase don't like to give customers their first high limit card. They want to see how well you manage another bank's high limit card first. The trick will be finding a bank that will give you your first high limit card. You will have to manage low limit cards first before you have a chance at getting a higher limit credit card.

Congrats on the home! :-)
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! Smiley Happy Last App: 4/5/13 Gardening until July 2014
Valued Contributor
Posts: 1,453
Registered: ‎04-14-2012
0

Re: When to apply? How do they decide if you get approved or denied?

All true......they are going to want to see about a year of use on some revolving accounts before they give you any decent limit.

And yes...Congrats on the new home!!

*8/10/13
Valued Contributor
Posts: 2,792
Registered: ‎03-15-2012
0

Re: When to apply? How do they decide if you get approved or denied?

A grasp of the situation is to figure complete DTI, instead of how just the mortgage payment fits into the paycheck.

The lates are gonna hurt for a while once they hit 60's, and higher.

 

I'm sure you've done your homework on the recent changes to PMI, interest write offs now...

 

Even though you've dug out, you're not quite out of the woods.

 

Auto/home loans are "secured," in the fact that there's collateral attached, but burning CC's, and tying in derogs into your report won't help get a high limit CC, especially since what revolvers you do have left open resemble mostly what rebuilders use.

Regular Contributor
Posts: 178
Registered: ‎04-30-2012
0

Re: When to apply? How do they decide if you get approved or denied?

All great information! Thank you all for sharing...Big help!  I appreciate all the knowledge I have gained here.  I first started in the mortgage forum, and they gave me all the info I needed to get pre-approved and then ultimately approved.  I hope to find the same knowledge in this forum.

 

Would you advise digging in and getting a low limit card now and work it up, or just wait altogether and apply a couple years from now?

 

 


Starting Score:2/1/16 565
Current Score: 3/1/16 575
Lender Mid Score: 3/1/16 575

Goal Score: 700


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Valued Contributor
Posts: 1,453
Registered: ‎04-14-2012
0

Re: When to apply? How do they decide if you get approved or denied?

IMO I would wait until after you close on the house and try to get WF to raise your limit to $5k then app for a new card, they might match the limit for you.

*8/10/13
Valued Contributor
Posts: 2,792
Registered: ‎03-15-2012
0

Re: When to apply? How do they decide if you get approved or denied?

Pay attention to your scores once the mortgage starts reporting. That alone will tell you if you need to wait a while, in regards to seeking another CC immediately.

Regular Contributor
Posts: 178
Registered: ‎04-30-2012
0

Re: When to apply? How do they decide if you get approved or denied?

I don't know if this would matter or not but I did a score analyzer and if I paid down my Wells Fargo Card (which I will do when my tax refund comes back) to 5% utilization, my score should go from 658 to around 705

 

Same thing goes for my wife, her Gap card has a $160 limit and if she pays down she will be aorund 715/725

 

Would this help with attaining credit?

 

 


Starting Score:2/1/16 565
Current Score: 3/1/16 575
Lender Mid Score: 3/1/16 575

Goal Score: 700


Take the FICO Fitness Challenge
Valued Contributor
Posts: 2,792
Registered: ‎03-15-2012
0

Re: When to apply? How do they decide if you get approved or denied?

Problem with score estimators, is that they're not using the "true algorithm," of what the mysterious fico gods use, and nobody's telling the core secrets.

Take the estimate with a big grain of salt. You're better off pulling your scores here, once you know the mortgage hits your CR.

Valued Contributor
Posts: 1,453
Registered: ‎04-14-2012
0

Re: When to apply? How do they decide if you get approved or denied?

I want to be more positive.....but....

The truth is...yes the decrease in utilization will raise your score. The raise in score will help your chances of being approved for the card.

However, when credit limits are set it is not based ONLY on your score, they look at the big picture. I seriously doubt that they are going to start you out with a high limit. You might get lucky with someone that will do a recon and give you the chance to explain things. But, it is a reach in my opinion.

*8/10/13

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