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Should I apply for a new credit card? I'm looking to get a
mortgage in Feb or March of 2013. My current score is 776
(TU-Fico).
How would this affect my score? The fico simulator says not
too much, others like Credit Karma say a lot.
I really don't need another card, but the two I have are
junk cards. They used to be orchard, now Cap 1 and have
very low limits ($500, $300) and high annual fees ($79,
$39).
I have no other debt. No Auto loans, no mortgage, no
student loans, etc. My AAOA is 3yrs 3 months and my Oldest
tradeline is 4 yrs 10 months. I have no negative
tradelines. (came a long way in last 6 months, thanks to
you). Utilization is 2% but with such low limits can change
quickly.
I'm keeping the Cap 1's until I get a mortgage then will
likely dump them. So, should I apply for new credit at this
time or not? Any recommendations for a good card?
IMO you shouldnt apply for another credit card because you dont want any inquries on your credit report if your making a big purchase like a house.
Keep your untilization down! Go online and pay down your credit card early so that when the statement cuts you have a lower utiilzation percentage.
Keep your UTIL down and dont app for anything!!! Garden what you have
If you do not NEED another card, then don't apply for another card or any other form of credit before you app for your mortgage.
AFTER the mortgage closes, then app for a prime card and close those with the AFs. My feeling is the cleaner your file before a mortgage app the better.
1. If you are planning for a conventional mortgage, there is an interest break at 760, so dropping below that might cost you.
2. Given your timeline, you should either apply for a card right now, or not until you get your mortgage. Generally, underwriters don't want to see any activity in the 6 months preceeding your application. So right now would be ok from that standpoint. However, if it lowers your aaoa and adds an inquiry, it might drop you below 760, so:
3. If there are things you are trying to do financially that you are unable to do because you do not have credit card X, then go for it. For example, if you are planning an around-the-world trip or are flying once a week, you are leaving money on the table with your current cards. But if you just want one for the long term, you are better off keeping your current score, getting the best mortgage rate, then apping to your hearts content the day after closing.
@RedThunder wrote:Should I apply for a new credit card? I'm looking to get a
mortgage in Feb or March of 2013. My current score is 776
(TU-Fico).
How would this affect my score? The fico simulator says not
too much, others like Credit Karma say a lot.
I really don't need another card, but the two I have are
junk cards. They used to be orchard, now Cap 1 and have
very low limits ($500, $300) and high annual fees ($79,
$39).
I have no other debt. No Auto loans, no mortgage, no
student loans, etc. My AAOA is 3yrs 3 months and my Oldest
tradeline is 4 yrs 10 months. I have no negative
tradelines. (came a long way in last 6 months, thanks to
you). Utilization is 2% but with such low limits can change
quickly.
I'm keeping the Cap 1's until I get a mortgage then will
likely dump them. So, should I apply for new credit at this
time or not? Any recommendations for a good card?
No, see bolded.
Close on your mortage before you apply for any new credit.