Itch to close some and apply... Any suggestions?

[jefftca925]

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@smc733 wrote:

Not exactly true.  Many mortgage lenders will ask people to close a few trade lines if they have too many, or are extended too much credit.  When prepping for a mortgage, it is best to get rid of as many unused/un-needed tradelines as possible.  They'll still help AAoA for 10 years, too.

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I have NEVER heard of a mortgage lender EVER advising someone they needed to close CC accounts.  If someone's utilization was too high they might suggest that they pay down their balances to help their FICO scoring but to close them all together have not heard that.   And I know from experience...   (was advised the exact opposite).

[Anonymous]

I am a loan officer and I can tell you that you need to be careful when it comes to closing tradelines.  It could benefit your credit to close some of the accounts, but it also can hurt you.

example:  you have 10 open tradelines that have an average history of 60 months and don't owe more than 50% on any of them, then you decide to close a 5mth old credit line.  this would most likely help your score.

example:  you have 7 open tradelines with a much newer credit history of an average of 14mths, then you close out a line that you haven't used in awhile but it was your oldest card with 70 mths.  this might hurt your credit.

and if we are talking about less than 5 tradelines then keep them all open and debt should be at 50% or less.

for more help let me know

[Edited to remove personal information] -Marinevietvet, myFICO moderator

[smc733]

I've quite commonly heard of mortgage lenders saying 

"your credit is fine, but you have so much available credit compared to your income, you pose a risk with this mortgage unless you lower that"

[haulingthescoreup]

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@smc733 wrote:

I've quite commonly heard of mortgage lenders saying 

"your credit is fine, but you have so much available credit compared to your income, you pose a risk with this mortgage unless you lower that"

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I've heard of this, although I don't recall hearing (or reading) this from someone who actually went through it.  I'm beginning to think that it's one of those Internet legends that just go on and on, like the one about how FICO stopped scoring AU accounts 2 years ago (they didn't.)

And six cards, as the OP has, is pretty much nuthin' these days.

Anyway, when it comes to getting ready for a mortgage, I wouldn't try to guess what lenders would want, other than having debt paid off and savings piled up. If a lender wanted me to close perfectly good accounts with spotless history, I'd first think about getting a different lender, but otherwise, I'd only close something if I was specifically told to do so.

I can barely keep up with my own mind any more, much less try to read the minds of lenders... 

Meanwhile, OP, the usual advice is not to close cards unless there's a fee, or you've got too many to keep track of and you're sweating losing track of payments, or there's just something so spectacularly annoying about one that you know that you will be a happier individual after kicking it to the curb. You might check out fused's Closing Credit Cards for some perspective (don't remember if anyone referenced that.)

Also don't remember if anyone mentioned this one (see, I said I was losing my mind), but as other rewards cards cut back --PenFed, for one --Chase Freedom is looking better. The basic 1% is eh, but sometimes the quarterly rewards are fantastic. They've had six months in a row (two quarters) of 5% cash back on groceries, and they're currently giving 5% cash back on drugstores as well.