Welcome to the forums!
I want to gently disagree with some of the other posts both in terms of long-range scoring and in preparing for a mortgage app. And the tactics for these two scenarios can be almost opposite, so be sure to understand the difference!
First of all, the most important thing is to always be timely on your payments. Never charge anything that you don't have cash in the bank to cover, so that you could pay it off online tomorrow if you had to. Think of CC's as just a handy way to pay your bills in full once a month. You don't want to get into the debt mindset!
Long-range, your best bet to keep scores high is to have maybe two more cards, one bank card and one retail card. (Retail cards are from a store or gas company, and they don't have Visa/ MC/ Discover/ AmEx on them.) Have all three backed by different banks. Probably one of the two bank cards should actually be from a credit union (CU.)
Your auto loan helps your credit mix as long as it's open. Once it's paid off, it stays on your records for 10 years (or until EQ gets tired of it), helping your history, but it no longer helps your credit mix, and your scores can drop.
So all that above is for general purposes. For mortgage hunting, don't apply for new credit right away, unless your lender advises you to. Generally, they don't want to see new apps before going for a mortgage, but your credit file sounds thin (few accounts reporting) and short (hasn't been going for long), and they might want to see more of a track record. If they do recommend that you establish more of a credit history first, your scores should not go down for the next two revolving credit tradelines (CC's), because the FICO scoring formula "likes" to see 3 or so open revolving lines. I'll bet that if you went to the simulator page on your FICO EQ report, it would project a score increase for opening another account.
I would definitely not pay off the auto loan completely --again, I think that a lender is going to want to see a string of months of perfect payment history on various credit accounts --the track record thing. You can pay down a chunk of it, if that makes sense financially; just make sure that you leave enough of a balance to have at least a year's worth of payments.
By the way, this is an example of how what's good for credit isn't necessarily good for finances. But if you're going for a mortgage, this could be important.
Usually for mortgage apps, all three of your FICO scores and reports are pulled. You have your EQ FICO score, which is a great score. You can buy your TU score here, but it's TU98, and many lenders are pulling TU04, which could be higher or lower. You can't buy your EX FICO any more, as of Feb 13 per Experian's decision
, so you'll just have to find it out at app time. But with this little credit history, I don't think they're going to vary too widely.
So anyway, there's short-term strategy (mortgage hunting) and long-term strategy (keeping and expanding on the great credit you already have.) For the short term, I agree --ask realtors for some recommendations for mortgage lenders and interview them. Don't let them pull your credit yet, though. You want to do your mortgage apps all at once. For the long term, you might want to read the FICO High Achievers thread. There's a lot to be said for those new to credit modeling their behavior on the scoring feedback that we've collected from members' FICO score reports.
And if you haven't already, please read Understanding Your FICO ® Score and Credit Scoring 101 (at least the first post.)
These will give you the background knowledge you need to understand what you read here on the forums.
I want to gently disagree with some of the other posts both in terms of long-range scoring and in preparing for a mortgage app. And the tactics for these two scenarios can be almost opposite, so be sure to understand the difference!
First of all, the most important thing is to always be timely on your payments. Never charge anything that you don't have cash in the bank to cover, so that you could pay it off online tomorrow if you had to. Think of CC's as just a handy way to pay your bills in full once a month. You don't want to get into the debt mindset!
Long-range, your best bet to keep scores high is to have maybe two more cards, one bank card and one retail card. (Retail cards are from a store or gas company, and they don't have Visa/ MC/ Discover/ AmEx on them.) Have all three backed by different banks. Probably one of the two bank cards should actually be from a credit union (CU.)
Your auto loan helps your credit mix as long as it's open. Once it's paid off, it stays on your records for 10 years (or until EQ gets tired of it), helping your history, but it no longer helps your credit mix, and your scores can drop.
So all that above is for general purposes. For mortgage hunting, don't apply for new credit right away, unless your lender advises you to. Generally, they don't want to see new apps before going for a mortgage, but your credit file sounds thin (few accounts reporting) and short (hasn't been going for long), and they might want to see more of a track record. If they do recommend that you establish more of a credit history first, your scores should not go down for the next two revolving credit tradelines (CC's), because the FICO scoring formula "likes" to see 3 or so open revolving lines. I'll bet that if you went to the simulator page on your FICO EQ report, it would project a score increase for opening another account.
I would definitely not pay off the auto loan completely --again, I think that a lender is going to want to see a string of months of perfect payment history on various credit accounts --the track record thing. You can pay down a chunk of it, if that makes sense financially; just make sure that you leave enough of a balance to have at least a year's worth of payments.
By the way, this is an example of how what's good for credit isn't necessarily good for finances. But if you're going for a mortgage, this could be important.
Usually for mortgage apps, all three of your FICO scores and reports are pulled. You have your EQ FICO score, which is a great score. You can buy your TU score here, but it's TU98, and many lenders are pulling TU04, which could be higher or lower. You can't buy your EX FICO any more, as of Feb 13 per Experian's decision
, so you'll just have to find it out at app time. But with this little credit history, I don't think they're going to vary too widely.So anyway, there's short-term strategy (mortgage hunting) and long-term strategy (keeping and expanding on the great credit you already have.) For the short term, I agree --ask realtors for some recommendations for mortgage lenders and interview them. Don't let them pull your credit yet, though. You want to do your mortgage apps all at once. For the long term, you might want to read the FICO High Achievers thread. There's a lot to be said for those new to credit modeling their behavior on the scoring feedback that we've collected from members' FICO score reports.
And if you haven't already, please read Understanding Your FICO ® Score and Credit Scoring 101 (at least the first post.)
These will give you the background knowledge you need to understand what you read here on the forums.