topic Re: Help Newbie! in Credit Cards

Help Newbie!

Anonymous — Tue, 08 Jan 2013 19:24:27 GMT

Hi guys this is my first post! I have been following this forum for about 10 months and it has greatly improved my credit. My fico went from a 518 to 639 in 10 months. My husband and I recently went to speak to a loan officer about a rural home loan. His credit is 551 (fico score). He makes 2 1/2 times the amount I do; however, no loan is possible with him on there. So needless to say I had to do it on my measly 12 dollar an hour job (I am also a full time student). With that said, he came back with a loan offer that blew my mind. I got approved for 100k house (which here is a lot of house in rural GA), low mortgage payments and no money down, with an APR of 3.7% however, needing one more point.

Now here is my dilemma, we mainly went to speak with him to see where to start, how to better our credit, and ask all the questions with the intention of buying a house in March (if there was a possibility). He urged me to open another line of credit. I have my school loans since I started almost 11 months ago, perfect pay on time, and a first premier card for going on 8 months perfect on time paying. So I followed his advice and applied for Capital one, speaking to the lady for over 45 mins before applying.

I gave her everything on my credit so she knew which would be the best to apply for. I only had one hard inquiry on my credit (from the loan officer above). After her telling me to go safe and apply for the rebuilding credit card, I was denied. I have no idea why yet as I have not received the letter. Now I feel like I am stuck between a rock and a hard place. I was one point under 640 before the loan to get the best rate possible, and now I have 2 hard inquiries on my credit.

What advice would anyone offer here, do I try for another card or something risking another HI pull? I only have 2 revolving credit lines on my CR, my school and this CC. I just do not want to ask for a limit increase with them charging 25% on the 100. I would greatly appreciate any advice Thanks in advance!! -K

Re: Help Newbie!

Anonymous — Tue, 08 Jan 2013 20:32:47 GMT

What type of Cap One card did you apply for? Did they give a reason for the denial?

Re: Help Newbie!

Anonymous — Tue, 08 Jan 2013 20:47:06 GMT

I have not recieved the letter stating why yet. (Just baffeled I got approved for a loan of 100k, but denied on a credit card). I am not sure which, I just tried to find the one she had me apply for. It was for credit over 580, and no fee the first year, 18 dollars the second year. My loan officer said they do not frown upon credit card inquires, so to apply again when my credit card balance posts this month on the 12th. I just am lost... Is there an easier card to get like Walmart, gas card, or another CC that reports to all 3?

Re: Help Newbie!

Anonymous — Tue, 08 Jan 2013 20:54:25 GMT

You may get some good advice in the mortgage section of the forum. However, if you read many threads on here, then you would know that in most experiences applying for credit while trying to close a home is a big no no.

He is telling you to get me more credit, which when you add the card to your accounts it will lower you AAoA, which could and possibly will lower your score making it even more difficult to get your loan. Not to mention the credit apps usually affect underwriters (general rule is no apps within 6 months of applying for mortgage).

Your loan officer is probably trying to do the right thing, "he wants his commission", but may not be the best one to get advice from. I am not saying I am the best person either, but look at the collective group of informed consumers on MyFico forums and you will get some sound advice.

Best of luck to you.

Re: Help Newbie!

Anonymous — Tue, 08 Jan 2013 21:00:33 GMT

Thanks for your advice, that is why I am here. I think the best way to learn is to talk to people who have already walked in my "future shoes"

Re: Help Newbie!

SnackTrader — Tue, 08 Jan 2013 21:44:42 GMT

Sounds like the officer is just trying to get that extra point - which ends up being a cool $1,000 in her pocket.

So was your loan already approved after it went through underwriting and all that? Or has the officer just said "oh, we can definitely offer you this"? Because I think that's a big distinction and will likely change how you go through the credit card process. If it hasn't gone through underwriting, you are not truly approved for anything, as far as I am aware.

As stated, it's generally not a good idea to put any new inquiries or accounts on your credit so close to mortgage. But if you haven't gone through underwriting yet, it's possible that this didn't do any additional damage. You'll have to wait and see I suppose. But try to research a little more on the process. Without the knowledge, you will rarely fall into the best possible deal. But with knowledge of the process, you can save some money and a lot of hassle.

Re: Help Newbie!

Anonymous — Tue, 08 Jan 2013 22:30:53 GMT

He told me before he ran my credit that the stipulations had to be 620 with no collections and 640 for some collections. I came out with a 639, and though I may gain that one point by march. If I can raise my score 20-40 more points it is the difference of thousands in my interst rate over 30 years.

Re: Help Newbie!

Anonymous — Tue, 08 Jan 2013 22:33:07 GMT

This is the criteria for the USDA loan, not the lenders. (As far as I am aware). I could have signed the loan right there with one more point, but like I said I am trying to get the best possible loan, along with raising my credit a tad more. Just confused at the moment.

Re: Help Newbie!

SnackTrader — Wed, 09 Jan 2013 00:57:27 GMT

So are you able to wait a few more months for that score increase, or do you need the mortgage today?

It seems to me that if you are able to get a new card (secured may work for this purpose) and then wait 6 months for the inquiries to age, your scores have a chance to increase those 20 points. Obviously there is no guarantee, but 6 months would give you at least a fighting chance.

Re: Help Newbie!

Anonymous — Wed, 09 Jan 2013 06:31:13 GMT

I can wait, he just seems to push the issue for me to get another line of credit. I only have 2 right now. I have time. I have till the end of March for my lease to be up here.

Re: Help Newbie!

Anonymous — Wed, 09 Jan 2013 09:22:06 GMT

The bad thing is that CapOne pulls from all 3 reports. Depending on what fico your bank is using, you can try to sneek in a discover approval with a TU inquiry. Since you can wait, I'd suggest that you give it the 3 months and then continue with the loan. As you may know, keep your util below 9% and only let 1 card report. The rate they gave you is outstanding, cheers to that.

We closed with Bofa on 11/11 and the rate didn't change once we locked it in. know you will get more information in the mortgage forum. btw, are you applying FHA or Conventional?

Re: Help Newbie!

Anonymous — Mon, 14 Jan 2013 04:21:27 GMT

Sorry it took so long to reply (was out of state), I applied for FHA. 90% of my town qualifies for rural. Capital One said that I do not have enough credit history. Weird, I am going to wait and try for a Wal-Mart card, if I get denied there I am going to just wait it out or get a secured cared to give me 3 lines of credit. Congratulations on your home J I appreciate all the advice.

Re: Help Newbie!

solxp — Mon, 14 Jan 2013 06:07:25 GMT

@Anonymous wrote:
Hi guys this is my first post! I have been following this forum for about 10 months and it has greatly improved my credit. My fico went from a 518 to 639 in 10 months. My husband and I recently went to speak to a loan officer about a rural home loan. His credit is 551 (fico score). He makes 2 1/2 times the amount I do; however, no loan is possible with him on there. So needless to say I had to do it on my measly 12 dollar an hour job (I am also a full time student). With that said, he came back with a loan offer that blew my mind. I got approved for 100k house (which here is a lot of house in rural GA), low mortgage payments and no money down, with an APR of 3.7% however, needing one more point.

Now here is my dilemma, we mainly went to speak with him to see where to start, how to better our credit, and ask all the questions with the intention of buying a house in March (if there was a possibility). He urged me to open another line of credit. I have my school loans since I started almost 11 months ago, perfect pay on time, and a first premier card for going on 8 months perfect on time paying. So I followed his advice and applied for Capital one, speaking to the lady for over 45 mins before applying.

I gave her everything on my credit so she knew which would be the best to apply for. I only had one hard inquiry on my credit (from the loan officer above). After her telling me to go safe and apply for the rebuilding credit card, I was denied. I have no idea why yet as I have not received the letter. Now I feel like I am stuck between a rock and a hard place. I was one point under 640 before the loan to get the best rate possible, and now I have 2 hard inquiries on my credit.

What advice would anyone offer here, do I try for another card or something risking another HI pull? I only have 2 revolving credit lines on my CR, my school and this CC. I just do not want to ask for a limit increase with them charging 25% on the 100. I would greatly appreciate any advice Thanks in advance!! -K

I would def recon this thru the EO. Send a email to the ceo of Cap One tons of thread on the this board will walk you through it and tell them exactly what you told us here and be sure to mention that you spoke to a CSR for 45 minutes about your situation. While its not 100% guaranteed that they will approve you it wont affect your credit to try and there is a much greater success rate when the Executive Office gets involved then with any other department within Capital Ones mystical magical mushroom world of under-writing. The only 100% guarantee you have right now is that if you dont follow up you have wasted a hard pull on your credit.

If your not in a rush it will save you 10000's of dollars on a mortage to wait till you get over 680-720 fico and that should easily be do able within 12 months if you are currently at 639.00 while a walmart card would help some fico scores store cards lower then credit cards. You may want to sit down with your husband and discuss what time frame your looking at and if it would be better long term to wait another year before purchasing a home also during that time he can hopefully begin to repair his credit most likely thru secured cards and possibly as a AU on some of your accounts. You should also get rid of that first premier card the second you close on your mortage and after you have obtained one or two more cards. IMO a secured card is much better then a predatory card like first premier. As a full time student you may be eligible for some student cards from some prime companies.

Re: Help Newbie!

Anonymous — Mon, 14 Jan 2013 06:31:38 GMT

I think the only thing worth risking is a secured card, then wait 6 months before going for that mortgage.

You should also get your husbands scores up into that 640 range as well. Go to the rebuilding section of the forum and work hard on his credit.

Figure out a payment you are comfortable with. I would highly recommend getting a 15 year mortgage over a 30 year. You will pay significantly less in interest, and your payment will still remain affordable.

I would also advise paying a little extra for a house in a good area, it will help with resale in the long run. Make sure the home is sound enough to withstand whatever natural disasters that are common in your area. Then be sure to get insurance that specifically covers those perils.

Re: Help Newbie!

Anonymous — Mon, 14 Jan 2013 13:55:47 GMT

Thanks everybody! I got my capital one letter and it stated not enough credit history. So, I went with the Walmart card. They approved me for 700 dollars. I am in no rush and my loan officer knows that. He has not bugged me once other than told me to get that 3rd credit line. I just do not want to dilly dally around and miss a great thing. Houses are dirt cheap right now, and as far as I can see they are not going up soon.

Re: Help Newbie!

Anonymous — Mon, 14 Jan 2013 15:52:39 GMT

I was just approved for a Chase Freedom on 1/10. Applied for it on 12/22 but it took awhile to go through the recon process. I applied with two different lenders for a mortgage on 12/31 and 1/5. Both came back with preapprovals but I have to go with the builder's lender for the incentives.

I was told to NOT use the card until after closing. The Chase Freedom is my third credit line. My app is in underwriting. The first broker I did a preapproval check with back in July said, accounts opened 120 days out don't count and don't require a letter of explanation. To add to it all, my car broke down in Nov and I had to get a new vehicle and I leased it.

My mid fico is 703 and holding steady so the new accounts won't bump me under the threshold. So typically if you apply for a credit card close to a mortgage, they don't want you to use it until after closing as they run your credit one more time before closing and the usage on the card can bump your score down and if you are on the edge, it can disqualify you completely. And they also don't want you to buy large purchases on your current cards. Everyday expenses are okay but be sure to PIF before the statement cuts.

So if you are going to close in March, ask if it is okay for you to use your Walmart card before closing. Getting new credit close to a mortgage depends on one's creditworthiness and the lender. It is recommended that you don't get new credit close to a mortgage but if your score is in the 700's and you manage the new credit as your loan officer tells you to, you should be okay to close. We plan to close by the end of this month. Best of luck to you and congrats on your new card!

Re: Help Newbie!

Anonymous — Mon, 14 Jan 2013 23:11:41 GMT

Congrats on all your success as well! It is confusing for sure. However, I am just following his advice, but asking questions along the way. I do not need to buy in March, I can buy whenever. I just want to make sure I am doing everything correctly. I may wait another month or so if my credit will pull up some. I am going day by day. The Wal-Mart card pulled my credit up 16 points. Another school loan went on my credit that upped it another 20 points.

I am extremely happy with how things are rolling. Again congratulations on your soon to be home And thanks for the advice!!

Re: Help Newbie!

Anonymous — Sat, 19 Jan 2013 16:58:53 GMT

Thanks Viking! And I wish you the best of luck on your mortgage this spring! My loan was conditionally approved 1/17 and I received my loan commitment letter as well. My underwriter said she is working the weekend so I will send the docs she needs to her email this weekend and hopefully by Friday I will be approved! Then it goes to the underwriter that will be servicing my loan and my loan officer said that will be an easy approval. And then hopefully I will get cleared to close by 1/31! I can't wait to get out of this rental property!