@merryCanDream wrote:Hi All,
I have a relatively young credit history (~ 5 years 2 months). Have never been late (100% on time payments)
Since I didn't have a big ticket loan planned all this time, I have played the Rewards game a bit so far and have milked my good Credit Score.
However since I am planning for mortgage sometime in June this year, the time has come for me to be vigilant about my Credit scores. I would appreciate your thoughts and inputs on what gameplan should I adopt for the next few months, including when to apply for mortgage, credit cards to close (if any, to boost average age) etc!
My Credit details:
Total Credit Age = 5 years, 2months
Average age of Credit = 2 years, 9 months
Total CL = $44K
Total Revolving Balance = $14K (Taking advantage of BT Teaser Rate till July'2014. Can payback right away if it is to my advantage) Pay this down asap if you can
Credit Utilization = 33% same as above
Total Open Cards = 9
Open Credit Cards:
Bank of America - Cash Reward: CL 10K - Would Like to keep
Capital One Quick Silver - CL 5K - Would Like to keep
Chase Amazon- CL 3.2K - Would Like to keep
Chase Freedom - CL 4.4 - Would like to keep
Capital One No Reward - CL 1K - My oldest/first card. Have to keep for history. Dont "have to keep" for history, it will be there for 10 years opened or closed
Chase Sapphire Preferred - CL 12K - Will not pay the annual fee. Will ask for a waiver/change to Plain Chase Sapphire next month. If not, will close. DO NOT CLOSE UNTIL YOU PAY OFF THE ABOVE 14k. Sorry about the caps but this will destroy your score if you do.
Citi Dividend - CL 6.7K - Don't mind closing, if it improves average age. Closing wont help or hurt AAoA
Kohls & JC Penney Store cards - Opened for store promotions.
Already Closed in the Past - Credit Cards/ Auto Loan:
Amex Blue, Discover, Citi Dividend, Chase, BofA, Autoloan.
Honestly I dont really see a need to close any cards at all, they are not hurting you by sitting there open. You're ready for your morgage as soon as you pay down your balances and dont do anything that may result in a HP. The only thing you can do MAYBE and only MAYBE is to open up an AMEX or two right now for backdating.
Cliff Notes
1. Don't close anything
2. Pay down balances to under 10% on 1 card, 0 on the rest
3. Stay away from HPs and "new" TLs except for below
4. Depending on when you had your AMEX BLUE app for 2 AMEXs right now for backdating. <~~~~~ MAYBE 
@wHiTeSoL wrote:
@merryCanDream wrote:Hi All,
I have a relatively young credit history (~ 5 years 2 months). Have never been late (100% on time payments)
Since I didn't have a big ticket loan planned all this time, I have played the Rewards game a bit so far and have milked my good Credit Score.
However since I am planning for mortgage sometime in June this year, the time has come for me to be vigilant about my Credit scores. I would appreciate your thoughts and inputs on what gameplan should I adopt for the next few months, including when to apply for mortgage, credit cards to close (if any, to boost average age) etc!
My Credit details:
Total Credit Age = 5 years, 2months
Average age of Credit = 2 years, 9 months
Total CL = $44K
Total Revolving Balance = $14K (Taking advantage of BT Teaser Rate till July'2014. Can payback right away if it is to my advantage) Pay this down asap if you can
Credit Utilization = 33% same as above
Total Open Cards = 9
Open Credit Cards:
Bank of America - Cash Reward: CL 10K - Would Like to keep
Capital One Quick Silver - CL 5K - Would Like to keep
Chase Amazon- CL 3.2K - Would Like to keep
Chase Freedom - CL 4.4 - Would like to keep
Capital One No Reward - CL 1K - My oldest/first card. Have to keep for history. Dont "have to keep" for history, it will be there for 10 years opened or closed
Chase Sapphire Preferred - CL 12K - Will not pay the annual fee. Will ask for a waiver/change to Plain Chase Sapphire next month. If not, will close. DO NOT CLOSE UNTIL YOU PAY OFF THE ABOVE 14k. Sorry about the caps but this will destroy your score if you do.
Citi Dividend - CL 6.7K - Don't mind closing, if it improves average age. Closing wont help or hurt AAoA
Kohls & JC Penney Store cards - Opened for store promotions.
Already Closed in the Past - Credit Cards/ Auto Loan:
Amex Blue, Discover, Citi Dividend, Chase, BofA, Autoloan.
Honestly I dont really see a need to close any cards at all, they are not hurting you by sitting there open. You're ready for your morgage as soon as you pay down your balances and dont do anything that may result in a HP. The only thing you can do MAYBE and only MAYBE is to open up an AMEX or two right now for backdating.
Cliff Notes
1. Don't close anything
2. Pay down balances to under 10% on 1 card, 0 on the rest
3. Stay away from HPs and "new" TLs except for below
4. Depending on when you had your AMEX BLUE app for 2 AMEXs right now for backdating. <~~~~~ MAYBE
I disagree with some of the above. I don't think it's so imperative to pay your balances down asap. You'll want to pay them down with enough time for your reports to update before your mortgage app, but you have some time for that. Make sure you give yourself enough time for your reports to update though. Depending on when you pay the balance down, it could take over a month to update.
Given that you say you have enough money set aside to wipe out your CC balances, I also don't think it matters if you close the CSP. Yes, doing so will cause your overall utilization to increase, but it won't matter when you pay the balances down. In general, I would keep the card by downgrading to Sapphire as you suggest, but I wouldn't worry about the score effect of closing the account provided you are going to pay the balances down.
I don't know that I would bother with applying for Amex cards for backdating either. It would need to be a fairly old Amex to see any significant effect.
ETA: If you didn't want to downgrade your CSP, you could also reallocate the credit line to your Freedom. That would solve the issue of any utilization change. I think you can also downgrade to another Freedom card if you wanted to be able to further max out quarterly bonuses.
Starting Score: ~500 (12/01/2008)
Gotcha...For now, I will then plan on paying off the 14K (which I have already budgeted for and can repay) within 2months prior to beginning house hunting. Will cleanup any balances prior to mtg - which I do anyways since I have always PIF. I am an out and out transactor - never like to pay any interest on CC balances.
I also took Creditaddict's advice above (thanks 
) and called CapOne this morning to convert my plain vanilla Platinum to Quicksiliver (success!!) and have applied for a CLI there after confirming that it was a SP. However in rest of the places I was told that it would result in a HP, which I declined saying no, thank you. I will do no more HPs till this mortgage thing gets over. There is only one enquiry on Transunion which is falling off this March. There may be a HP due to Rent & Employment but hopefully that shouldn't hurt.
We also have an expanding family, so will need to upgrade to a 7 seater by sometime around September. My plan is to first do the mortgage before the auto loan - sensible to do so?
Another question, really on the downpayment for mortgage: I am planning to fund a part of my downpayment through a loan against my 401K to bring up my downpayment to 20% - again, don't like to pay PMI. Do lenders discount 401k 'loans' against downpayment? I think I am good against the 28-36 rule, my DTI will be around 15-20%.
Thoughts/suggestions?