I am looking to buy my first house in just over a year. Here is my information:
All of my accounts are current, but I have a couple old items that "charge off's" (7 years old and 4 years old) , one colleciton item that will drop off in January 2008 on EQ, and one 60 day late on all 3 agencies from 7 months ago. I have sent GW letters to beg for mercy with all of these items, and I will continue to send them until they are hopefully lifted.
I currently have 2 revolving accounts and 1 car loan. The credit card accounts have 60% utilization reported, but this will be 0% by next month.
My question is whether I should open 1 or 2 more credit card accounts, and not use them. I have read some threads that stated that it helps to have 3 or 4 credit cards open to bump up a score. Also, since I am looking in over one year I believe the "new" credit staus will be lifted on these new accounts.
Any other information or tips would help. I really need to work hard to get my scores over 720. Is this realistic, or am I just wishfully thinking?
Starting Score: 583 EQ, 612 EX, 569 TU Current Score: 658 EQ, 648 EX, 618 TU Goal Score: 720 EQ, 720 EX, 720 TU
I think your idea and goal are actually quite realistic! While you want to keep those inquiries to a bare minimum (especially just before going for a mortgage or refi), I think you would be well advised to apply for at least 2 more credit cards and possibly even a long term installment loan to beef up your credit report, and thereby raising your FICO scores. (CRS's and lenders like to see a "mixture" of credit). Also, in anticipation of obtaining a mortgage down the road, I would look into membership of a credit union so you can cultivate a business relationship. Credit unions tend to have lower interest rates for their members... Bottom line, I would shoot for FICO scores of 750, and when it comes time to get a mortgage, YOU will be sitting in the catbird seat.
I'm not an expert, but when I was going through the process, I was told do NOT open any new accounts. Even with no balance, it brings down the average age of accounts. I had two cc's (Visa/MC) and was told two is a good number. I will say that they liked seeing a good balance of different types of credit(installment, revolving, etc), which it sounds like you have.
Then again, if you're a year away from starting the process, it may be enough time will pass between now and then that they aren't considered new, but I was also told having accounts in good standing for 3 years or more is ideal.
Hope it helps...
Outer Banks Frank
"Success is nothing but luck...Just ask any failure!