When should I apply for Chase Saphire? 650 score, 0 balance, 0 dept

[visualfxpro]

I'd like to apply for Chase Saphire because I need a high limit card. Buying a house in 3-4 months and need the convienience of charging expensive household items so I can spread payments over a few months as needed (pumbing, repairs, appliance failure). So my other thought was AMEX since no limit. That's all I got. Would like over $6k limit. $10k would be nice. This way I could charge $1000 with only 10% of my limit.

I've lived most of my live debt free paying cash, so at 45, my credit age is only 3-4 years. I've paid off 3 car loans in my life, usually within 2 years if not sooner. 2014 I was out of work right after paying all my credit cards, so I was low on cash and had to get right back into the cards with no money to pay. Card charged off with $5300 balance of $6500 from 2015. That was Municipal Credit union. They claimed they charged it off, but somehow they are still involved. They tried to contact me in last year.

Might I be able to negotiate that $5300 to $2500 and have them remove from credit, then push my 650 to 700? THEN apply? What would YOU do?

BTW, I have over $5k disposible NET income every month and I have a 2 year Chase savings account and Investment account. Full value is $8k. I was thinking to start keeping more cash there. It's 90% stocks. I figure when they run my credit they will also look at my account balances. I'd like them to see more cash just sitting there in my savings, than the limit I'm hoping to get. Hoping them seeing I have more than enough to handle a high limit card, will help me get the card.

[OmarGB9]

Well, there's a few things to unpack here.

First, if you're going for a mortgage in 3-4 months DO NOT apply for any cards until AFTER you have keys in hand. Mortgage lenders don't like seeing apps for credit within the 12 months leading up to your mortgage app.

Secondly, you say you want a card with a large limit to not run up its utilization and spread out payments over a few months. So just to be clear, you're okay with paying interest? Because the CSP/CSR have no introductory 0% APR periods. Paying interest will eat into any rewards earned. And an Amex charge card would have to be paid in full monthly, unless they offer you Pay Over Time, which isn't guaranteed, and even if they do offer it, the limit on it may not be nearly high enough for your expected expenses. 

Third, Charged off is merely an accounting measure that basically says they don't expect to get paid. But that doesn't mean the debt was forgiven or discharged. That's why they're "still involved." When was the first missed payment that led to the charge off on this account? That date would be the DOFD, or Date of First Delinquency, which is what starts the 7 year credit reporting exclusion clock.

Fourth, I'm assuming that account is close to falling off anyway, so yes it's possible they would settle for less, but not guaranteed. I'm surprised they never hired/sold to a collection agency. Anyway it's probably close to falling off on its own, so I would first look for that DOFD I mentioned.

Actually when they run your credit, they DO NOT look at your bank accounts. Banking and Lending are 2 separate divisions. Unless you're a very high roller with 8+ figures invested at Chase, bank accounts don't really matter. Just ask @Brian_Earl_Spilner.

Finally, looking at your signature, it appears you have no open/active credit cards with limits like those you're looking to get (your highest limit is only $3k), so it'll be extremely difficult to get approved for the high end cards you're looking for. The Chase Sapphire Preferred has a minimum $5k limit while the Chase Sapphire Reserve has a minimum $10k limit, so Chase prefers to see you already have accounts with limits within those ranges before granting you one. They don't like to be first.

[visualfxpro]

Thanks for the reply. I had put all my info in my signature. See below. Charge off card was from 2015, however they have been reporting it every month now for the last 2 years at least.

So what happens when I apply for cards a month after starting a new mortgage? Chance of approval goes down no? I just paid off all my debts BTW:

$6000 balance on personal loan
$3000 in credit card balances

Hoping to see a big bump when all my balances go to zero. Then I'll keep them at zero until I apply for morgage. Only do small purchases.

'November 2021
Transunion Fico 8. 659
Equifax Fico 8. 613
Experian Fico 8 651

Capitol One $750
TD Bank $1000
Bank of America $3000
Wells Fargo $500
Amazon $2100

Charge Off from 2015: Municipal Credit Union $5300 ($6500 limit)

Credit Age:
3 years
Inquiries (6/12/24 month): 12 mo


Debt to Income ratio 21%'

[OmarGB9]

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@visualfxpro wrote:

Thanks for the reply. I had put all my info in my signature. See below. Charge off card was from 2015, however they have been reporting it every month now for the last 2 years at least.

So what happens when I apply for cards a month after starting a new mortgage? Chance of approval goes down no? I just paid off all my debts BTW:

$6000 balance on personal loan
$3000 in credit card balances

Hoping to see a big bump when all my balances go to zero. Then I'll keep them at zero until I apply for morgage. Only do small purchases.

'November 2021
Transunion Fico 8. 659
Equifax Fico 8. 613
Experian Fico 8 651

Capitol One $750
TD Bank $1000
Bank of America $3000
Wells Fargo $500
Amazon $2100

Charge Off from 2015: Municipal Credit Union $5300 ($6500 limit)

Credit Age:
3 years
Inquiries (6/12/24 month): 12 mo


Debt to Income ratio 21%'

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Yes I saw and edited my post accordingly. 

And no, actually. A new mortgage wouldn't affect a CC app. But a new CC app WOULD affect a mortgage and possibly keep you from being approved for your new house, so.

Don't pay ALL your cards to zero. Leave a small balance of like $10 or so on just ONE card and then pay the rest to zero before their respective billing cycles close. This is known as AZEO and mortgage scored love this. By the way, you may know this already, but when you go for the mortgage, lenders won't use your FICO 8. They use the mortgage scores which would be FICO 2,4,5 on EX, TU, and EQ respectively. So pull those scores up and look at those.

Also, you'll most likely have to pay that charge off one way or another prior to qualifying for the mortgage, as mortgage lenders don't like seeing outstanding delinquent debts and won't approve with one still remaining unpaid.

[visualfxpro]

@OmarGB9 Thanks for all the great tips! So you are saying apply after mortgage, but when should I do that? I'm afraid of getting rejected. Should I target a certain score?

[OmarGB9]

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@visualfxpro wrote:

@OmarGB9 Thanks for all the great tips! So you are saying apply after mortgage, but when should I do that? I'm afraid of getting rejected. Should I target a certain score?

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Like I said before, apply AFTER you have keys in hand. Meaning your mortgage has been approved and the loan has been funded and you've fully closed on your house. 

You shouldn't be afraid of rejection, I mean it happens on occasion. As for score, I'd say at least 700. But again, I strongly urge you to consider other cards besides the Chase cards. You have no cards presently with at least a $5k limit, which Chase likes to see before handing out a CSP/CSR. And pay off that charge off and let your reports update to reflect the pay off prior to applying for either your mortgage or any credit cards. 

[visualfxpro]

Thanks so much.

I will do a seperate post to speak about how to get high limit cards after searching the forum.

[unsungivy]

I wouldn't count on Chase for a "high limit" card. For me, they like low APRs and low limits (5k and 6k). It's a hard pull to get a CLI unless they auto you.

USAA likes 15k SLs. Navy Federal seems to get a lot of "high" (15-25k) SLs.

If you're looking for mostly home-related things after you close on your house, consider the BofA CCR for using the Home Improvement/Furnishing category. That's a card that you would use long-term (and gets better if you put money into BofA savings etc), and also has a 0% APR intro, and soft pulls to increase your limit.

[RSX]

you may get a pretty solid score bump when you settle that outstanding chargeoff - as soon as it reports as $0 - this may take 60 days total to reflect on the CRA's - so i would do that one ASAP

offer them 40-50% of the total and go from there - be ready to pay it off while on the phone

but as Omar said, this will very likely be mandatory to be paid off before the mortgage (from the underwriter) - so if they won't settle, you will need to pay whatever they say

i would actually apply for 2 cards post mortgage - dont worry about getting a high limit - just get 2 more cards and you can spread the spend around - and then get CLI's later after solid usage

[visualfxpro]

@unsungivy Thanks for tips! I already have Navy Federal. Guess it's time to start making some deposits. Do any of these companies much weight on savings account balances and verified income? I'll make well over $160k this year. That has to help.