Am I moving too fast?

[Bondo]

I have very little credit history. I got a secured credit card 4 months ago. My credit union just made it an unsecure card and raised my credit line from $250 to $500. I also just got a credit line from them for $750. I also just got an offer from Capitol One for a credit card. My question is should I add another card or should I wait? I have 3 hard inquires right now and no other negatives. I want to get a mortgage in 6 months to a year. I know if I get another credit card right now my score will go down. How long would it take for it to go back up?

[llecs]

If you are planning to app inside of a year, then I would wait. If you have the newly unsecured and the $750 CL, then you are in decent shape to have a good mix of credit come mortgage-time. If you did add a new CC (a third assuming you only have the two now), the score might take a slight dip and recover mostly by 6 months after it starts reporting and any damage would be recovered by the year mark.

ETA....congrats on the unsecured CC BTW. It's very rare to have a creditor unsecure that quickly. Most take a year or more, if at all.

[Bondo]

Thanks for the reply and the congrats. I actually only have the one credit card right now. The other is a line of credit hooked to my savings account. I was just wondering if those two would give me enough history or not. I talked to a financial advisor at the credit union this weekend to set up the line of credit and to unsecure my card and increase it's limits. She told me I should be able to get a mortgage in 6 months with the two items on my report. Because I don't have a credit history yet (until the 6 month mark) but have payed everything on time they gave me a default score of 680. Which they rate as a B. I would like to raise that but at the same time would be okay with it. I just don't want to lower it.

[Anonymous]

The previous good advice not withstanding. You might want to ask on the mortgage forum. The way I undertsand it, for certain mortgages they want to see three positive tradelines with either 12 or 24 months of good payment history (again, I am not an expert, but there are experts on the mortgage forum).

Best of luck!

[ShanetheMortgageMan]

So you have a 4 month old credit card, and a new credit line from them which I assume is 1 month old.  Do you have any other forms of credit on your reports?  Lenders want to see 3 trade lines of 12 months each.  Most lenders prefer them to be traditional trade lines, such as the credit card and credit line that are reporting on credit, or a car loan, student loan, personal loan, store credit card, mortgage, etc.  However some lenders will accept non-traditional trade lines such as rental/lease payment verification, utility payments, insurance payments (non-payroll deducted) and the like to build the required credit history.

[Bondo]

I only have the two items for my credit history. The credit union felt that the two would be enough. I have been with them for 10 years now so maybe that is why they would let it slide? Like I said though I would like to get another card so I have 3 lines. I just don't want to shoot myself in the foot by dropping my score over a long period. If my score would rebound in 6 months then I will get the card, if it won't rebound then I might have to rethink things.

[Bondo]

I still haven't decided what to do. Any other words of wisdom for me? God knows I need it.

[Anonymous]

well, I'm obviously not an expert (this would be my 2nd post here), but you and I are in simular positions. I had no score last month, and would like a mortgage before home prices start rising again. That being said, I opened 2 new secured cards last week (BoA and Wells Fargo) in addition to the cap1 secured card I've had for 6mos now. So I would suggest you do the same (Annual fee sux, but hopefiully they'll go unsecured before I pay it twice). You never can tell how things will go, and it may take you a bit longer than 6mos to get ready. In that case the 2 additional TL's should help you out.

Also being secured you can pimp out your own CL with cash deposits. I've been hearing that if you raise your secured CL to the 5k+ range, you'll be more likely to attract that amount as an unsecured. Anyway with your CR being virgin like mine was, you may want to look into taking out a secured personal loan also.  I dont have any first hand knowledge of exactly what kinda dip your CR will take opening all 3 @ once, but I hear it should recover nicely in 6mos anyways.

GL

[ShanetheMortgageMan]

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@Bondo wrote:

I only have the two items for my credit history. The credit union felt that the two would be enough. I have been with them for 10 years now so maybe that is why they would let it slide? Like I said though I would like to get another card so I have 3 lines. I just don't want to shoot myself in the foot by dropping my score over a long period. If my score would rebound in 6 months then I will get the card, if it won't rebound then I might have to rethink things.

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Since you already have a short credit history, then opening another credit card right now wouldn't put you much worse off than if you didn't open it... and it may potentially help.