NFCU Olive Branch - nRewards Should I app?

[newmomnewme]

I joined in 2013 and opened a CashRewards VISA 20k CL that I kept maxed since I opened it. In 2017, two collections popped up on my CR and my scores dropped, Navy sent a letter saying my Visa was about to expire and they weren't going to reissue the card. I paid on time each month and just paid it in full a week ago. 

As soon as the payment cleared, I received an invitation to apply for a nRewards Secured card. I am preparing my credit for a mortgage application Spring 2021, so I am wondering if I should app for the nRewards or not? 

Opinions and advice welcome. Updated scores are in my signature, I have two non-mortgage inquiries in my EQ report and 0 on my TU. My current UTIL is 55% across 3 cards out of 12. 

Thanks in advance guys!!!

[OmarGB9]

If you are planning to apply for a mortgage in less than a year, I would not apply for ANYTHING any time soon until you close and have keys in hand. Also, if you wouldn't mind listing all your cards and balances/limits. 55% util is quite high, and 12 accounts is quite a bit.

[newmomnewme]

LOL....I know, I know. I am a work in progress. 

PSECU 13.5/15k

NAvcheck 13/15k

Pepco FCU 6/9.5k

Cap1 QS 0/7.7k

Amex Blue 0/5k

Chase Freedom 0/3.5k

Macys 0/2400

Target 0/2100

Amazon 0/1800

Mercury MC 0/1500

Amex Gold 0/2000

I only have 11 now that the closed NFCU VISA 20k CL is gone....

[TC1212]

@newmomnewme 
 @DH had the same thing happen with his Navy card (7k limit). They said they weren't renewing it in 2015. Over 6 years we had 5 late payments. The card was always maxed out. We finally paid it off in full in May and he just got approved for the cash Rewards card a few days ago with a $7,750 SL.

[newmomnewme]

@TC1212 so you think I should app for the secured card or wait until after I purchase the home in Spring?

[TC1212]

@newmomnewme With all the lending changes currently going on, I wouldn't only because your scores appear to be borderline for what a lot of the banks are looking for right now. There are always lenders who can go with lower scores, but you would be limiting yourself in my opinion. But if you are able to pay down those 3 high balance accounts you have I think you would be okay score wise for the mortgage. 

[newmomnewme]

@TC1212 Thanks! I just needed to be talked off the ledge...I plan to pay off Pepco and Navcheck before the end of the year and get PSECU down as low as possible before my mortgage app. I was pre approved with Wells, TD, and a local lender rates were under 3% but the PMI ohhhhh the PMI. So I was trying to get back into Navy's good graces to go conventional with 10% down. 

None of this matters now because there is NO inventory in my area and prices are going up daily. I will sit still until I find something or go new construction. Either way, no cc apps at this time. Got it! 

[TC1212]

@newmomnewme @I'm in the same boat as far as housing. Low inventory and the few homes that come on fly off the market in a day or two and usually between 10-20k over asking!!! I'm not doing that and have time to wait. Good luck. 

[M_Smart007]

I agree .. wait if applying for a Mortgage within 12 months.

[zerofire]

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@newmomnewme wrote:

I joined in 2013 and opened a CashRewards VISA 20k CL that I kept maxed since I opened it. In 2017, two collections popped up on my CR and my scores dropped, Navy sent a letter saying my Visa was about to expire and they weren't going to reissue the card. I paid on time each month and just paid it in full a week ago. 

As soon as the payment cleared, I received an invitation to apply for a nRewards Secured card. I am preparing my credit for a mortgage application Spring 2021, so I am wondering if I should app for the nRewards or not? 

Opinions and advice welcome. Updated scores are in my signature, I have two non-mortgage inquiries in my EQ report and 0 on my TU. My current UTIL is 55% across 3 cards out of 12. 

Thanks in advance guys!!!

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Let me keep this short and sweet: NO!

Now as to the explanation. In this current climate and considering your current credit situation there is no place for additional credit lines for you. I have serious doubts that Navy FCU just randomly said that they are going to be doing non-renewal and are sending it to collections when everything is paid on time. If you said just suspended charge privileges and not issuing a new card I would believe but not also to collections. I think you seriously made a mistake somewhere. My guess is you failed to pay minimum at some point or somehow went over the $20k limit which calls for anything over the limit to be repaid immediately on next due date after statement per most Visa Signature cards in the form of Flexible Spending Accounts.

Now as for your existing credit lines the PSECU account is currently considered maxed since it is at 90%. This is also considered your Util as util is the higher of either across all accounts or per individual account. You are currently not in any shape for any new lines as you need to get your existing ones under control. For someone that wants to apply for a mortgage new accounts right now would also be unwise. You already looked and the PMI was painful since your score is a problem. PMI is just advancing the interest to the lender. The real interest rate for you is much higher. As it stands even a $500 payment to PSECU will drop you to a more realistic 86% and under the 89% limit for applying the maxed out penalty. Since you only have 3 lenders which have elevated amounts due I recommend paying all the minimums and anything new that you charge to the other accounts then pay any extra to whoever is charging the most interest. Also see what programs are available from the lender to potentially get the interest rate reduced. You can be surprised what they hide in the back.

You just need to keep working at it and you will be in a better place.