topic Re: I have only 1 card, do I need more? in Credit Cards

I have only 1 card, do I need more?

Anonymous — Mon, 17 Mar 2014 23:38:14 GMT

I'm hoping to get a mortgage in the next few months, so trying to rebuild my credit. Currently my equifax score is 629 (only paying for one).

The only credit card I have currently is an Old Navy card, with almost a zero balance. I'm wondering if adding another card will build my credit faster, or will it just knock it down temporarily when I apply?

the only other open credit I have now is a car loan. I have one collections bill I'm paying on and an IRS debt (which I know doesn't affect my score).

Re: I have only 1 card, do I need more?

Anonymous — Mon, 17 Mar 2014 23:54:13 GMT

Adding more cards will probably knock down your scores in the short term.

However, you typically want more than one card in your portfolio for a mortgage, and I would suggest finding out as quickly as you can what the specific requirements are for typical mortgage lenders.

There are various threads around here that suggest that at least 2-3 cards are best for scoring purposes.

Re: I have only 1 card, do I need more?

fot1 — Mon, 17 Mar 2014 23:55:16 GMT

General rule of thumb is Mortgage lenders want to see three open tradelines ( a year old) at the time of application. This is more so if you have had anything negative as this is waht is considered re-establishing credit.

Re: I have only 1 card, do I need more?

Shock — Mon, 17 Mar 2014 23:58:58 GMT

I would personally open up a couple more non-store credit cards if I were you. Your score will get dinged for th first year, but after that youll be good. I just dont know what you can get approved for with a 629 score. Others can probably chime in more.

Re: I have only 1 card, do I need more?

Anonymous — Tue, 18 Mar 2014 00:01:45 GMT

Another angle might be whether secured cards will satisfy the mortgage requirement.

If so, then you can get the SDFCU one, which is highly recommended around here. It doesn't require a hard pull, but would still hit you with a new tradeline and reduced AAoA in the short term.

Re: I have only 1 card, do I need more?

Leadberry — Tue, 18 Mar 2014 00:07:52 GMT

OP is looking to secure a mortgage within the next few months. I'm not sure he/she wants to be applying for new credit.

Re: I have only 1 card, do I need more?

myjourney — Tue, 18 Mar 2014 00:11:53 GMT

@Leadberry wrote:
OP is looking to secure a mortgage within the next few months. I'm not sure he/she wants to be applying for new credit.

+1 correct no apps within 6 months of mortgage

Re: I have only 1 card, do I need more?

plasectomy — Tue, 18 Mar 2014 00:17:08 GMT

Grabbing a card close to applying for a mortgage may hurt you more than help you unless you are being manually underwritten. It will also look bad if they pull the credit before closing and see that a new account is reporting.

Re: I have only 1 card, do I need more?

NikoD — Tue, 18 Mar 2014 00:26:08 GMT

I believe the people telling you to get more tradelines are implying that getting a mortgage in the next few months is premature and that you should get the new CCs then wait a year or more for the mortgage so the new accounts are no longer new. At least that was how I was interpreting it.

Re: I have only 1 card, do I need more?

Shock — Tue, 18 Mar 2014 00:33:16 GMT

Well, OP is in a bind then. Either app for the mortgage with one store card on file, or app for a couple cards, and then app for the mortgage in 6 months.

Re: I have only 1 card, do I need more?

fot1 — Tue, 18 Mar 2014 00:35:16 GMT

@NikoD wrote:
I believe the people telling you to get more tradelines are implying that getting a mortgage in the next few months is premature and that you should get the new CCs then wait a year or more for the mortgage so the new accounts are no longer new. At least that was how I was interpreting it.

That was what i was trying to say.. just skipped through to fast.

Re: I have only 1 card, do I need more?

myjourney — Tue, 18 Mar 2014 00:37:28 GMT

If you use this process you'll have to push the home purchase back maybe 4 extra months

Solution have someone parents or siblings add you as an AU to a old low UTL card.

Underwriting will see it but it should give you a quick boost to scores

Re: I have only 1 card, do I need more?

Anonymous — Tue, 18 Mar 2014 00:39:27 GMT

Seems like you want to find out specifically what the requirements are before making any moves.

If you have some lenders in mind, you can ask them about this.

Re: I have only 1 card, do I need more?

fot1 — Tue, 18 Mar 2014 00:42:49 GMT

OP I would suggest going over to the Mortgage board and laying out your file and see what is said over there.. My personal suggestion would be to add one or two cards and plan top apply this time next year.. Right now you have as many negative items as postive items And with scores in that range that will be a tough sale.

Re: I have only 1 card, do I need more?

fot1 — Tue, 18 Mar 2014 00:44:53 GMT

@myjourney wrote:
@Leadberry wrote:
OP is looking to secure a mortgage within the next few months. I'm not sure he/she wants to be applying for new credit.
+1 correct no apps within 6 months of mortgage

That is if you have nothing bad on your report.. If you have prior negatives you should have nothing new the year before.

Re: I have only 1 card, do I need more?

Anonymous — Tue, 18 Mar 2014 00:46:36 GMT

Myjourney has it correct. We did this for my wife to bump her scores up a little before we applied for our mortgage. This way she did not take any HP's and her credit score jumped enough for us to get a better rate on our loan.

Re: I have only 1 card, do I need more?

AndySoCal — Tue, 18 Mar 2014 01:43:36 GMT

When is the las time you used your old navy card?

Re: I have only 1 card, do I need more?

Anonymous — Tue, 18 Mar 2014 09:48:41 GMT

I used my card last about a month ago. It's relatively new, got it last November. Currently, has a balance of $37 with a $300 limit. I got my car loan in December 2012 and somehow got a decent rate of 2.99%, maybe because it was the end of the year.

The Old Navy card is the first credit card I've qualified for since my credit score tanked at the end of my failed marriage about four years ago. Late mortgage payments and credit card payments at the end screwed me. My score bottomed at 534, at least to my knowledge and has been slowly rising for the last couple of years.

Re: I have only 1 card, do I need more?

takeshi74 — Tue, 18 Mar 2014 13:08:33 GMT

I'd suggest a multi-pronged apporach. Definitely pull all 3 reports. Deal with your derogs. Get what you can removed (visit the rebuilding subforum). Push back the home purchase and verify what the mortgage lender specifically wants. Obtain and responsibly use 1-2 more cards to rebuild your credit. Rebuilding is a slow process and buying a home in a few months in your current situation is going to be very difficult if at all possible.

Re: I have only 1 card, do I need more?

fot1 — Wed, 19 Mar 2014 01:01:55 GMT

@Anonymous wrote:
I used my card last about a month ago. It's relatively new, got it last November. Currently, has a balance of $37 with a $300 limit. I got my car loan in December 2012 and somehow got a decent rate of 2.99%, maybe because it was the end of the year.

The Old Navy card is the first credit card I've qualified for since my credit score tanked at the end of my failed marriage about four years ago. Late mortgage payments and credit card payments at the end screwed me. My score bottomed at 534, at least to my knowledge and has been slowly rising for the last couple of years.

You have a bunch of lates that are four years old aslo? Sorry I don't see you being able to get a mortgage in a short time. Again I would suggest going to the Mortage board and laying out your full credit file and ask what you should do.. I think you are probably a year away. Best of luck