Reply
Member
Posts: 16
Registered: ‎08-14-2012
0

Credit Needed for Best Mortgage Rates

[ Edited ]

I am looking at getting into a house in 12 - 18 months.

 

I've cleaned up my credit a ton in the last 6 years and I've only got 3 Charge Offs left that will be falling off in about 9 months. 

 

Right now my active credit lines are thin.  I only have a $550 limit Orchard Bank card (with a monthly fee) and 2 student loans totaling about $4,500.  My other accounts have all been closed for 3+ years.

 

I would like to get a few credit cards now so that I can kick the Orchard Bank card to the curb and most importantly get some cards reasonable limits.  However I don't want this to hurt my chances of getting approved or the rate I get.  I want to get the very best rate possible. 

 

I currently have the following:
- 3 baddies (Charge Offs) - 6+ years old (I can't wait til they fall off!).  9 Months left to go.
- 1 low limit Orchard Bank account (now Cap One)
- Student loans in good standings (no lates)
- 1 Auto Loan (Paid 3 years ago, 30 days late twice in a row)

- FAKO 700 - 730 across all 3.  683 Fico but one CO/collections from 3 years ago was removed since then so it should be close to 700.

- Average age of accounts is 8 years

 

Goals in the next 1 - 1.5 years:
- Mortgage - I will have at least 10% + 10k for any fees or other stuff.  Income $75,000.  House around $250,000.
- 2-3 high limit credit cards

 

Should I look at getting 1-2 credit cards now or just tough it out and wait until I close on my mortgage in 12-18 months?

Valued Contributor
Posts: 1,063
Registered: ‎05-26-2010
0

Re: Credit Needed for Best Mortgage Rates

Your score determines how deeply underwriting looks at you, and your rate.  But you'll still be put through underwriting either automated or manual, which will be where your lates are looked at.  Two 30 day lates three to four years old should be having minimal impact on score and should n't be a hindrance in underwriting.

 

If you are going to take on new credit card debt (whether you use the lines or not) I would do it now.  If you have no inquiries and no new debt within the past 12 months that will help with both score and underwriting.  Having two or three prime credit cards with a year of positive history should help.  But be judicious about applying, don't risk inquiries in search of cards. I would start with your bank or credit union, go in and talk to a human, see what they can do for card(s).

BK7 Filed 8/11/2009 Discharged 11/23/2009. Purchased new home 4/11/2012
Starting Score:11/16/2009 EQ 566 11/16/2009 TU 538
Interim Score: 12/27/2012 EQ 683 09/17/2012 EX (lender) 670 1/01/2013 TU 701
Current Score: 11/06/2013 EQ 708 11/06/2013 EX 702 11/16/2013 702 11/06/2013 TU 729
Goal Score: EQ 740 EX 740 TU 740
Take the FICO Fitness Challenge
Member
Posts: 16
Registered: ‎08-14-2012
0

Re: Credit Needed for Best Mortgage Rates

I just wanted to say thanks to Chasmith.

 

I got two credit cards.  One with Amex.  They gave me $2,500.  Then I did the 3X CLI and got it to $7,500!

 

Then I applied for a Capital One Rewards card (prime) and they gave me a $10,000 limit right off the bat!

 

I am so excitied!

 

I also kicked that crappy $550 Orchard Bank card to the curb.

 

To top it all off my credits better than it's ever been at 750+ across all CRAs!

Established Contributor
Posts: 751
Registered: ‎10-04-2010
0

Re: Credit Needed for Best Mortgage Rates

That is great news Bill. Awesome news. Are you still trying to apply for a mortgage? Sounds like your application for a home loan should be a breeze!
BK in 2008, after making very stupid financial decisions.

Barclay's Apple Financing Card ($6400) --- Capital One Quicksilver ($13,000)---GEMB CareCredit ($5700) --- AUFCU ($10000)--- Walmart ($5000)

FICO Scores: TU 735 EQ 709 EX 740 (Feb 2013, all pulled by lender TU 747 (May 2015)
Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
† Credit cards for FICO Score ranges: The score ranges are guidelines based on actual applicant approvals and having a FICO Score in a particular range does not guarantee you will be approved for credit cards recommended in that range.

Copyright ©2001-2015 Fair Isaac Corporation. All rights reserved.   | Terms of Use | Privacy Policy | Sitemap

IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.