topic Re: Opening New Credit Lines in Credit Cards

Opening New Credit Lines

Anonymous — Mon, 14 Dec 2015 19:44:26 GMT

Hello All,

I asked this in a reply to another post, but thought I would post as a new question in the correct category.

So, I currently have 2 Cap1 cards. I was just approved for a mortgage, and will be closing in April (house is being built).

My question is, should I wait until 6 months after I close to open new accounts, or SHOULD I do it the day after I close?

I'm looking to get a new Cap1 card, a Costco card, and a Lowes card.

Any suggestions/feedback?

Thanks!

Re: Opening New Credit Lines

DeeBee78 — Mon, 14 Dec 2015 19:53:43 GMT

@Anonymous wrote:
Hello All,

I asked this in a reply to another post, but thought I would post as a new question in the correct category.

So, I currently have 2 Cap1 cards. I was just approved for a mortgage, and will be closing in April (house is being built).

My question is, should I wait until 6 months after I close to open new accounts, or SHOULD I do it the day after I close?

I'm looking to get a new Cap1 card, a Costco card, and a Lowes card.

Any suggestions/feedback?

Thanks!

You're fine to do it the day you close. Several people in the forums go on app sprees when they close on their house.

Just don't make any changes that will result in a hard pull for the next 6 months.

Re: Opening New Credit Lines

Anonymous — Mon, 14 Dec 2015 19:59:04 GMT

Thanks for the reply!

I know that my scores will drop once my mortgage is reported, how long before scores normally recover from this? 6-12 months?

Also, part of my pre-approval states that I cannot change anything on my credit profile... just good utilization and PIF on my current accounts.

Thanks for your help!

Re: Opening New Credit Lines

dragontears — Mon, 14 Dec 2015 20:43:16 GMT

It took 3 months before my mortgage first reported when I purchased last year and when I refi in June of this year the new mortgage just hit my report this month. so definitely a YMMV type of thing.

Since it is a mortgage the hit to your report is not as bad as a new CC would be. the reporting of the refi drop my score a total of 3 points. I can't really say what the mortgage last year did because I opened a few CC accounts as soon as I had the keys in my hand (first app was 5 hours after closing lol) so my reports were going through changes due to new CC accounts.

Re: Opening New Credit Lines

Anonymous — Mon, 14 Dec 2015 21:44:12 GMT

@DeeBee78 wrote:
@Anonymous wrote:
Hello All,

I asked this in a reply to another post, but thought I would post as a new question in the correct category.

So, I currently have 2 Cap1 cards. I was just approved for a mortgage, and will be closing in April (house is being built).

My question is, should I wait until 6 months after I close to open new accounts, or SHOULD I do it the day after I close?

I'm looking to get a new Cap1 card, a Costco card, and a Lowes card.

Any suggestions/feedback?

Thanks!
You're fine to do it the day you close. Several people in the forums go on app sprees when they close on their house.

Just don't make any changes that will result in a hard pull for the next 6 months.

Exactly!

Re: Opening New Credit Lines

redbeard — Mon, 14 Dec 2015 21:52:16 GMT

@DeeBee78 wrote:
@Anonymous wrote:
Hello All,

I asked this in a reply to another post, but thought I would post as a new question in the correct category.

So, I currently have 2 Cap1 cards. I was just approved for a mortgage, and will be closing in April (house is being built).

My question is, should I wait until 6 months after I close to open new accounts, or SHOULD I do it the day after I close?

I'm looking to get a new Cap1 card, a Costco card, and a Lowes card.

Any suggestions/feedback?

Thanks!
You're fine to do it the day you close. Several people in the forums go on app sprees when they close on their house.

Just don't make any changes that will result in a hard pull for the next 6 months.

^This. Except make sure the deal is closed prior to going on the spree. Technically, if its funded you are probably okay, but waiting till confirmation of close is best. That way, in case something delays at the last second, there are no issues.

The mortgage reporting probably won't drop your score much, if at all. I think having a mortgage is a score boost, so some ding for a new account and some offset for a mortgage. Beyond that, it will depend on your profile.

Dan

Re: Opening New Credit Lines

Anonymous — Tue, 15 Dec 2015 21:48:31 GMT

Thanks for the feedback!

I thought a mortgage dropped it... since that's not the case, I will probably wait a couple months before opening new accounts.

Thanks!

Re: Opening New Credit Lines

Anonymous — Wed, 16 Dec 2015 00:53:40 GMT

Me and hubby closed on a house 10/26 and on 10/27 he did an app spree with homedepot got approved for 15k and with lowes 20k and bank of america 10k. His score dropped the next month by 20pts but then when he checked it last week went back up again and will continue to. Do it the day after you close and youll be fine.

Re: Opening New Credit Lines

Anonymous — Wed, 16 Dec 2015 04:32:04 GMT

@dragontears wrote:
It took 3 months before my mortgage first reported when I purchased last year and when I refi in June of this year the new mortgage just hit my report this month. so definitely a YMMV type of thing.
Since it is a mortgage the hit to your report is not as bad as a new CC would be. the reporting of the refi drop my score a total of 3 points. I can't really say what the mortgage last year did because I opened a few CC accounts as soon as I had the keys in my hand (first app was 5 hours after closing lol) so my reports were going through changes due to new CC accounts.

I closed on July 1st and app'd on July 3rd my credit took the hits for the new accounts but not much for the new mortgage. I would app the next day after you close in case you decide to refi. Your accounts will have aged. It took my mortgage 2 months to report because it got sold to another lender.

Re: Opening New Credit Lines

Anonymous — Wed, 16 Dec 2015 04:34:36 GMT

@redbeard wrote:
@DeeBee78 wrote:
@Anonymous wrote:
Hello All,

I asked this in a reply to another post, but thought I would post as a new question in the correct category.

So, I currently have 2 Cap1 cards. I was just approved for a mortgage, and will be closing in April (house is being built).

My question is, should I wait until 6 months after I close to open new accounts, or SHOULD I do it the day after I close?

I'm looking to get a new Cap1 card, a Costco card, and a Lowes card.

Any suggestions/feedback?

Thanks!
You're fine to do it the day you close. Several people in the forums go on app sprees when they close on their house.

Just don't make any changes that will result in a hard pull for the next 6 months.

^This. Except make sure the deal is closed prior to going on the spree. Technically, if its funded you are probably okay, but waiting till confirmation of close is best. That way, in case something delays at the last second, there are no issues.

The mortgage reporting probably won't drop your score much, if at all. I think having a mortgage is a score boost, so some ding for a new account and some offset for a mortgage. Beyond that, it will depend on your profile.

Dan

Yes, definitely wait until your loan is funded. We didn't move until our loan officer said YOUR LOAN HAS BEEN FUNDED!!!!

Re: Opening New Credit Lines

takeshi74 — Wed, 16 Dec 2015 14:11:59 GMT

@Anonymous wrote:
My question is, should I wait until 6 months after I close to open new accounts, or SHOULD I do it the day after I close?

The timeframe really doesn't matter as long as your mortgage is finalized.

What does matter is your credit profile and the timeframe isn't going to guarantee an approval or denial.

@Anonymous wrote:
I know that my scores will drop once my mortgage is reported, how long before scores normally recover from this? 6-12 months?

Don't assume that. Again, it's is not just a matter of time. Impact and recovery all depend on one's credit profile (everyone is not identical) and the details of the mortgage. We can't tell you what the imapct will be for you or how long it would take you to recover from impact. You have to monitor your credit to determine these things.

If I had to guess based on the scores in your signature -- assuming those are FICO 8's (always consider the specific scoring model as well as CRA when referring to scores) then I would suspect that you would need some time to recover. That said, I'm not an underwriter for any card issuer so monitor your credit versus relying on people's guesses.

@Anonymous wrote:
I thought a mortgage dropped it...

Impact is not fixed regardless of type of credit. Whether it's a mortgage, auto loan, credit card, etc the impact will depend on one's credit profile versus the details of the new account. One person could see a hit. The next could see little to no impact. In some cases one could see an improvement. Don't assume fixed impacts.

Scoring models are not simple as "new mortgage = -X points". They weigh a number of different factors to generate a score.