topic Re: Please advice in Credit Cards

Please advice

kyenku — Wed, 09 May 2018 18:19:17 GMT

Hi,

I asked these questions before but now my priorities changed...

So here is my credit profile

Amex Blue cash preferred 25K Zero balance

BofA 10600 Zero balance

Discover 7500 Zero Balance

Citi Thank you12000 Balance zero

Citi DC 12000 Zero Balance

DCU 5000 1500 Balance (Closed card)

Chase 5000 2000 Balance(Closed card)

Auto loan 6200 of 9800 remaining (22%)

Personal loan 5000 of 12000 remaining (10.6%)

I am planning pay off DCU in a couple of weeks and pay Autoloan for about 3200 and keep balance of 3000

Chase is charging me only 2.99% so I want to keep that as it is reporting balance as accurate

Have 4 late payments from DCU Latest in 2015 March and the oldest os 2014 September.

And here are my scores

1. Amex - 725

2.BofA - 722

3.Citi- 789

4.DCU-751

5. Discover-722

Credit Karma

TransUnion 751 Equifax 770

Planning to get mortgage in November/December. I have not applied a credit card for alteast 3-4 years. So I would like to apply a card now.

May be a good balance transfter card. So is it wise to apply now and will my scores recover by November/December if I apply now and get a hard pull?

Please help me what to do I just dont want to apply a card now and get my scores hurt for my mortgage. Is 4 months good time to negate the hard pull. and if I balance transfer and keep all my cards at zero except say one at about 7500 balance would that hurt too?

Re: Please advice

Adkins — Wed, 09 May 2018 18:23:49 GMT

If you are planning to apply for a mortgage in November/December, you do NOT want to apply for any credit now. A safe bet is no new credit a minimum of six months before you plan for a mortgage. A year is even better. Your scores are good but FICO 8 scores are not the same as a mortgage score and you might actually be higher or lower than those scores.

Re: Please advice

kyenku — Wed, 09 May 2018 18:29:01 GMT

Okay Thank you. Yes I will get my mortgage scores from FICO in a month once all the statements are reported. Also trying to write a good will to DCU if they can remove my latepayments, I am walking to Bank this week, offer to pay the credit card in full and request to remove the late payments.

So I talked to a mortgage lender he said if my score is 740+ does not matter if it is 741 or 780 I will still get the same rates. So if I apply a card now in March would it really impact me and get my scores under 740?

Thanks

Raj

Re: Please advice

SouthJamaica — Wed, 09 May 2018 18:29:52 GMT

@kyenku wrote:
Hi,

I asked these questions before but now my priorities changed...

So here is my credit profile
Amex Blue cash preferred 25K Zero balance
BofA 10600 Zero balance
Discover 7500 Zero Balance
Citi Thank you12000 Balance zero
Citi DC 12000 Zero Balance
DCU 5000 1500 Balance (Closed card)
Chase 5000 2000 Balance(Closed card)

Auto loan 6200 of 9800 remaining (22%)
Personal loan 5000 of 12000 remaining (10.6%)

I am planning pay off DCU in a couple of weeks and pay Autoloan for about 3200 and keep balance of 3000
Chase is charging me only 2.99% so I want to keep that as it is reporting balance as accurate

Have 4 late payments from DCU Latest in 2015 March and the oldest os 2014 September.

And here are my scores

1. Amex - 725
2.BofA - 722
3.Citi- 789
4.DCU-751
5. Discover-722
Credit Karma
TransUnion 751 Equifax 770

Planning to get mortgage in November/December. I have not applied a credit card for alteast 3-4 years. So I would like to apply a card now.
May be a good balance transfter card. So is it wise to apply now and will my scores recover by November/December if I apply now and get a hard pull?

Please help me what to do I just dont want to apply a card now and get my scores hurt for my mortgage. Is 4 months good time to negate the hard pull. and if I balance transfer and keep all my cards at zero except say one at about 7500 balance would that hurt too?

1. You should pay off the Chase card as well as the DCU card.

2. You should pay the installment loans down to 9% or less.

3. You should not apply for any new cards until after you get the mortgage.

Forget about 2.99% interest on the Chase card. That's chicken feed compared to the kind of money you can save by having a good score when you apply for your mortgage.

Re: Please advice

SouthJamaica — Wed, 09 May 2018 18:31:56 GMT

@kyenku wrote:
Okay Thank you. Yes I will get my mortgage scores from FICO in a month once all the statements are reported. Also trying to write a good will to DCU if they can remove my latepayments, I am walking to Bank this week, offer to pay the credit card in full and request to remove the late payments.

So I talked to a mortgage lender he said if my score is 740+ does not matter if it is 741 or 780 I will still get the same rates. So if I apply a card now in March would it really impact me and get my scores under 740?

Thanks
Raj

No. No. No. You're itching to get a new card but you must resist the temptation. No new accounts. No inquiries. Let average age of accounts keep increasing. Let age of youngest account keep increasing.

Re: Please advice

Adkins — Wed, 09 May 2018 18:33:19 GMT

@kyenku wrote:
Okay Thank you. Yes I will get my mortgage scores from FICO in a month once all the statements are reported. Also trying to write a good will to DCU if they can remove my latepayments, I am walking to Bank this week, offer to pay the credit card in full and request to remove the late payments.

So I talked to a mortgage lender he said if my score is 740+ does not matter if it is 741 or 780 I will still get the same rates. So if I apply a card now in March would it really impact me and get my scores under 740?

Thanks
Raj

Yes. A new card lowers your average age of accounts, which can lower your score. You don't need to apply for any more credit. As the PP has stated, getting the card balances you have to zero (especially since they are closed), will help your score immensely.

Re: Please advice

kyenku — Wed, 09 May 2018 18:51:25 GMT

Okay Thank you all for your suggestions.. I will be paying DCU and Chase off completely by end of next month then.

Then will be paying my auto loan about 3000, probably pay it off in next 3-4 months would that help me?

Thanks

Re: Please advice

Adkins — Wed, 09 May 2018 18:54:52 GMT

@kyenku wrote:
Okay Thank you all for your suggestions.. I will be paying DCU and Chase off completely by end of next month then.

Then will be paying my auto loan about 3000, probably pay it off in next 3-4 months would that help me?

Thanks

Maybe, if you get the auto loan to under 9%. There is no way to tell how manybpounts you would gain. I highly suggest talking to a mortgage underwriter because they can tell you the best way to improve your score.

Re: Please advice

kyenku — Wed, 09 May 2018 19:03:49 GMT

Sure thank you under 9% meaning paying it off almost 5500? but I can do that before November, Before applying for the loan.

Should I still talk to the underwriter now?

Re: Please advice

Anonymous — Wed, 09 May 2018 19:15:42 GMT

@kyenku wrote:
Sure thank you under 9% meaning paying it off almost 5500? but I can do that before November, Before applying for the loan.

Should I still talk to the underwriter now?

No card /credit apps period. None til the day after the close. As I have said before some lenders will do a final credit pull up to everyone leaving the closing table. I watched a loan get cancelled because the buyer applied for a Home Depot card on the way to the closing and the lender simply cancelled the loan. Simply ask you self do I want a new credit card(s) or a new house.

Re: Please advice

Anonymous — Wed, 09 May 2018 19:24:04 GMT

Just one more thing, let one of your open cards report a balance every month after you pay off Chase and DCU.

Re: Please advice

HeavenOhio — Wed, 09 May 2018 19:27:12 GMT

You don't want to fully pay off the loans until after your mortgage has closed. Having no open loans will hurt at least one of your mortgage scores. (I don't recall which one.) Bringing your loan balances under 9% (8.9% or below) is great, though.

Also, just say no to credit cards until after the mortgage has closed. In addition to AAoA (average age of accounts), your AoYA (age of youngest account) will take a hit. Given that your newest accounts are fairly old, I'd assume that your excellent AoYA is worth a fair amount as far as propping up your score.

The reason not to do anything before the mortgage has closed is that the lender will likely do a soft pull on the closing date. Actually, I'd suggest not applying for anything until you know your new address has hit your credit reports. That may avoid potential verifiation issues.

Re: Please advice

HeavenOhio — Wed, 09 May 2018 19:30:57 GMT

@Anonymous wrote:
Just one more thing, let one of your open cards report a balance every month after you pay off Chase and DCU.

Good catch. All cards reporting zero will ding you by up to 20 points or so. The balance doesn't have to be large. $5 will do. You don't have to pay interest to pull this off. Your reported positive balance should come from new charges.

Re: Please advice

kyenku — Wed, 09 May 2018 19:34:32 GMT

Thanks a ton again.

I got my next steps

1. Pay off Chase and DCU first - And as I am typing paid Chase off it reports on the 18th

2. Will pay DCU this Saturday, planning to walk to the Bank and pay I live in MA, because I have 4 late payment will request them if they will be willing to remove those late paymnets, and also will tell them I am planning for mortgage and will most likely go with them in a few months so I dont want to hurt my rate I really hope they will accept

3. Will pay Auto Loan 3300 this month and 1000 next month.

4. Will report balance on of my cards Citi has about 900 balance will not pay that right away that would make it all zero except one

And no cards until I get new address

Thanks a ton again you guys I really really appreciate what you guys are doing

Re: Please advice

SouthJamaica — Thu, 10 May 2018 03:41:09 GMT

@kyenku wrote:
Okay Thank you all for your suggestions.. I will be paying DCU and Chase off completely by end of next month then.

Then will be paying my auto loan about 3000, probably pay it off in next 3-4 months would that help me?

Thanks

Purely from a FICO score perspective, it's actually better to keep a small balance on the auto loan. But I would imagine you want to get a clean title to the car, so you have to decide which is more important.

Re: Please advice

kyenku — Thu, 10 May 2018 13:57:54 GMT

I will keep auto loan for about 1000$ will not pay that in full

Re: Please advice

kyenku — Thu, 10 May 2018 13:59:33 GMT

Also guys I have another questions, can I ask Chase and DCU to reopen my cards after I pay in full?

Do you think they will do that? and would that in anyways negatively impact my score?

Thanks a million for all your help!

Re: Please advice

Adkins — Thu, 10 May 2018 14:45:27 GMT

@kyenku wrote:
Also guys I have another questions, can I ask Chase and DCU to reopen my cards after I pay in full? I wouldn't, it will change your credit profile.

Do you think they will do that? I don't know. Different lenders have their rules. and would that in anyways negatively impact my score? Only if they update the timeline of the payments to currently.

Thanks a million for all your help!

I would pay them off and leave them closed. You do not want to change your credit profile in any way, other than paying off balances.

Re: Please advice

kyenku — Thu, 10 May 2018 14:50:54 GMT

Okay

Thank you!

Re: Please advice

Kforce — Thu, 10 May 2018 14:56:37 GMT

@SouthJamaica wrote:

1. You should pay off the Chase card as well as the DCU card.
2. You should pay the installment loans down to 9% or less.
3. You should not apply for any new cards until after you get the mortgage.

Forget about 2.99% interest on the Chase card. That's chicken feed compared to the kind of money you can save by having a good score when you apply for your mortgage.

+1 Mortgage interest is far more important.