When to apply?

[Anonymous]

Good afternoon, everyone.

My wife and I have been spending the past few years in a debt repayment program, and we just made the last payment.  We have also been working for the past year on cleaning up our credit reports.  Due to these two things, my wife's score has gone up over 150 points to 738 (at last look).

Once this last payment hits her CR, my wife won't have any revolving credit lines.  We do not have a mortgage, so the only thing left on her report is the car loan, and a few student loans.

My question is this.  Should she apply for a new card before the payment shows (which will take off her only credit card with a balance), or should we wait until the card is at a zero balance, since it's a debt program-based card?  I'm concerned that it still having a balance (as of today) would affect the CC application, but I'm not sure if not having any cards at all (when the change hits) would be worse.

Thoughts?

Thanks, everyone!

Ryan 

[haulingthescoreup]

Interesting question! Being in a DMP no longer affects your FICO scores, but it most certainly can catch the attention of potential lenders.

Do you have one or two CC's on which she could be an authorized user (AU)? Ideally, these are long history, low or no balance, zero baddies. These are still being counted in FICO scoring. My own opinion is that those who go on an account as an AU in order to help their credit should not use the account in any way, shape or form. I'm an AU on my husband's Discover card in order to get some badly-needed age, but I never, ever use the card.

Once she's on as an AU, then she needs to get credit in her own name again. One possibility is a local CU or bank, especially if she already has a checking or savings relationship with them. Another is Bank of America's secured card. A third is a store card, such as Macy's. There are numerous terribly store cards, so do some research here, if this looks like an option.

Once she has credit re-established in her own name, she can then come back off the AU cards.

[Anonymous]

Thanks for the response.

Unfortunately, we're both in the rebuild stage, so I can't add her as an AU, because I'm in the same situation as she is.  I thought about the BOA secure card, but someone (in another thread) advised me against it, due to her (relatively) high FICO score.  I thought about a CU card, as well, but I'm pretty sure our CU just puts their label on a BOA card.

I think we may end up applying for one now, then if that fails, trying again after the change posts...

Thanks again! 

[haulingthescoreup]

On the other thread, they might not have grasped the full situation. It's true that a high score like that would normally be overkill, but your wife is in a different situation.

Did you/ she include BofA in the DMP?

[Anonymous]

Please let me know if I'm not reading this right, but yes, we both had BoA accounts in our DMP.  I had two BoA cards, whereas she had one.

Oddly enough, the last card that's got paid off (the account in question) was her BoA card...