Mortgage Loans

[BuffaloBill]

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?

[chasmith]

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).