topic Re: can you get approved for a mortgage with one open credit card? in Mortgage Loans

can you get approved for a mortgage with one open credit card?

Anonymous — Thu, 20 Feb 2014 18:35:56 GMT

if you can get a mid score of at least 640, and qualify with income and length of time at current job, will having only one credit card be an issue? thanks!

Re: can you get approved for a mortgage with one open credit card?

BrianB_The_Loan_Professor — Thu, 20 Feb 2014 19:12:17 GMT

One is ok if you have had credit and those tradelines are closed -

It is better to have more but not necessary -

Re: can you get approved for a mortgage with one open credit card?

Anonymous — Thu, 20 Feb 2014 19:17:40 GMT

thanks, i'm asking for my mom. she just opened up a secured credit card last month, and I'm hoping that she will be able to bring her score up enough to get a mortgage within 6 months or so but I'm not sure. I don't know if I should recommend her getting another secured card (would that card need to be at least 6 months old to look okay for a mortgage?) or if she can do it with just one card!

her scores in january (from a lender pull) were EQ 609 EX no score TU 653, and that was with no open TL at all but a few closed ones accounts in good standing and a BK in 2010.

Re: can you get approved for a mortgage with one open credit card?

BrianB_The_Loan_Professor — Thu, 20 Feb 2014 19:22:03 GMT

Has she had credit in the past? One card isnt going to cut it on its own - I havent heard of any lenders allowing alternate credit lately - used to be you could make up for a thin credit profile by documenting other obligations like insurance or cell phones.....

typically you should have a minimum of 3 tradelines at least 2 years old and one of them should have a higher limit of around 2k or more

This is a rough guideline - i have seen less approved and people with more denied.........

Re: can you get approved for a mortgage with one open credit card?

Anonymous — Thu, 20 Feb 2014 19:33:40 GMT

Here's some info from her CR

Ch. 7 BK filed 09/2010, updated 01/2011

-Target credit card opened 09/2007, closed 10/2010 with the BK, all payments were on time

-Medical collection for $130 opened 09/2008 and paid 12/2008, will be removed 01/2015

-2 installment accounts with Aaron's (furniture)

opened 06/2010 for $3,515, paid as agreed $146 per month for 24 months, date closed 05/2012

and one opneed 08/2010 for $969 paid as agreed for $49 a month for 24 months, date closed 08/2011

-a joint installment account unsecured loan for $6,500 opened 12/2008

status: closed due to refinance, $181 per month for 60 months, closed 08/2009, no late payments

-a Belk store card open from 02/2008 to 10/2010, no late payments

so all of those accounts are closed but still on her report and now she has a capital one secured credit card that she will be paying off before statement date every month for at least the next 6 before considering applying for a mortgage.

Will any of her prior accounts help? thanks a lot for taking the time to help answer my questions and try to figure this out!

Re: can you get approved for a mortgage with one open credit card?

BrianB_The_Loan_Professor — Thu, 20 Feb 2014 19:47:32 GMT

Yes those will help

You really wont know if it is enough until she applies and the loan is ran through automated underwriting

Re: can you get approved for a mortgage with one open credit card?

Anonymous — Thu, 20 Feb 2014 19:49:55 GMT

@BrianB_The_Loan_Professor wrote:
Yes those will help
You really wont know if it is enough until she applies and the loan is ran through automated underwriting

Okay thanks! I tried with a few online lenders in January and it wasn't enough but that was before she opened her new card. I'll have her pull her scores after 6 months and see where they're at, I just want to make sure she's on the right track if possible!

Re: can you get approved for a mortgage with one open credit card?

BrianB_The_Loan_Professor — Thu, 20 Feb 2014 20:58:34 GMT

The concern I have with the scenario you shared is there has not been much work to reestablish credit post BK

Did they say what the reason was for denial?

Re: can you get approved for a mortgage with one open credit card?

Anonymous — Thu, 20 Feb 2014 21:19:58 GMT

@BrianB_The_Loan_Professor wrote:
The concern I have with the scenario you shared is there has not been much work to reestablish credit post BK
Did they say what the reason was for denial?

B

It didn't specify, but it did list her scores which I think may have been the main factor. She didn't know anything about how to fix her credit, and honestly if I wouldn't have joined this website to learn about how to build my own credit she still wouldn't know, that's why she's just now trying to rebuild her credit. I wish she would have started a few years ago!

Re: can you get approved for a mortgage with one open credit card?

fot1 — Fri, 21 Feb 2014 00:56:49 GMT

One card isn't going to be enough to re-establibe credit post BK. They are gonna want to see atleast 3 open tradeline for a year.

Re: can you get approved for a mortgage with one open credit card?

Anonymous — Fri, 21 Feb 2014 01:02:08 GMT

@fot1 wrote:
One card isn't going to be enough to re-establibe credit post BK. They are gonna want to see atleast 3 open tradeline for a year.

she's had several tradelines open (just not credit cards) for longer than a year since the BK (stated above), so hopefully that will be enough to help. I guess there's not a lot more to do but wait and find out.

Do either of you think she should try to open up another secured card? She has capital one now and all the other cards I've seen online seem pretty bad (high anual fee, high deposit, etc.). I might suggest that she try to open a secured card with a credit union, but I don't want to add too many new things to her report if it's not going to help. She wants to buy as soon as possible, and their lease ends in July so that would be ideal.

Re: can you get approved for a mortgage with one open credit card?

fot1 — Sat, 22 Feb 2014 19:54:30 GMT

@Anonymous wrote:
@fot1 wrote:
One card isn't going to be enough to re-establish credit post BK. They are gonna want to see atleast 3 open tradeline for a year.
she's had several tradelines open (just not credit cards) for longer than a year since the BK (stated above), so hopefully that will be enough to help. I guess there's not a lot more to do but wait and find out.

Do either of you think she should try to open up another secured card? She has capital one now and all the other cards I've seen online seem pretty bad (high annual fee, high deposit, etc.). I might suggest that she try to open a secured card with a credit union, but I don't want to add too many new things to her report if it's not going to help. She wants to buy as soon as possible, and their lease ends in July so that would be ideal.
Ch. 7 BK filed 09/2010, updated 01/2011
-Target credit card opened 09/2007, closed 10/2010 with the BK, all payments were on time
-Medical collection for $130 opened 09/2008 and paid 12/2008, will be removed 01/2015
-2 installment accounts with Aaron's (furniture)
opened 06/2010 for $3,515, paid as agreed $146 per month for 24 months, date closed 05/2012
and one opened 08/2010 for $969 paid as agreed for $49 a month for 24 months, date closed 08/2011
-a joint installment account unsecured loan for $6,500 opened 12/2008
status: closed due to refinance, $181 per month for 60 months, closed 08/2009, no late payments
-a Belk store card open from 02/2008 to 10/2010, no late payments

I am not sure an UW will consider two accounts opened a month or three before filing BK as re-establishing credit, even though the payments were made past the BK .. But I will let others chime in on that.

If she is trying to get into a house in July then you are looking at a 30-45 day window to get your scores up in time. I would not add any new accounts as they will most likely drop the score with either the inquiry or just the AAoA. My suggestion would be to try like crazy to get the medical Collections off. GW letters and phone calls.

Re: can you get approved for a mortgage with one open credit card?

Anonymous — Sun, 23 Feb 2014 00:20:54 GMT

Good advice about the GW letter, I'll see what she can do about that. I didn't really think much about it just because it was before the bankruptcy, but it's still on her report so I'm assuming it's still affecting her score somewhat. Any idea how much it could be affecting her score since it's pretty old? Either way, always better to get it off if possible!

Re: can you get approved for a mortgage with one open credit card?

fot1 — Sun, 23 Feb 2014 01:33:27 GMT

The older the collections the less they score.. but they still hold the score down some.. It could be a 10-20 points swing per item. No way of knowing.. You only list two credit scores for you mom.. I assume she got those with the secured card? I would then find out the third score. Also letting a very small less then %9 balance show on her credit card should give the best score, better then zero balance would.

Re: can you get approved for a mortgage with one open credit card?

Anonymous — Sun, 23 Feb 2014 02:39:39 GMT

The scores came from an online mortgage company, it listed all three but under EX it listed "no score." She's planning on buying her scores in about 6 months to see if the secured card has helped any!

Re: can you get approved for a mortgage with one open credit card?

stellar — Thu, 08 Jan 2015 04:18:31 GMT

I'm curious to know what happened. Did she get a mortgage?

Re: can you get approved for a mortgage with one open credit card?

Anonymous — Thu, 08 Jan 2015 04:42:01 GMT

Yep, she closed on the house last month! She started with the secured capital one card with a $200 l8mit, paid it off in full multiple times a month and they bumped her limit up to $500 after a few months. Then she got approved for a Walmart store card (which also got an auto cli), and used the shopping cart trick to get a Victoria's Secret card as well. By the tone she applied in September the scores they pulled for her were in the 670s or 80s. I also added her as an AU on 2 of my cards to help with age of accounts.

Honestly I was really surprised that it happened so quickly!

Re: can you get approved for a mortgage with one open credit card?

Anonymous — Thu, 08 Jan 2015 04:43:02 GMT

On my phone so sorry about the typos!