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Credit card/mortgage simulation question

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Anonymous
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Credit card/mortgage simulation question

So i'm currently house hunting and have a pre-approval letter but its about to expire at the end of May. The lendor advised that when i renew that letter it will do another hard pull on my credit. Having said that, myFICO is telling me that if i get a credit card it will boost my score by 30 points. Growing up my parents told me to avoid credit cards like the plague but i have of course learned a bit late that is not a good idea. 

 

I know that applying for a credit card while looking for a house is a no no, but my question is this, if they are going to do another hard pull on my credit at the end of this month anyway, before that happens, couldn't i get the credit card and have that settled before they do the next hard pull? Wouldn't my score go up the 30points like what myFICO is showing in the simulation?

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Anonymous
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Re: Credit card/mortgage simulation question

So can you clarify.... you have no credit cards of any kind now?

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Anonymous
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Re: Credit card/mortgage simulation question

If you were to get a credit card right now, you'd have a hard inquiry on your report right away from the application.  While the account many not report for several weeks or a month (or 2 months with some creditors like Amex) when the mortgage company does another HP they'll see that you applied for credit from the CC HP even though the account hasn't yet reported.

 

The scoring benefit you receive would happen after the account reports and you are then showing revolving credit usage, where you currently aren't.  That's what I'm assuming anyway, that you have no current revolving credit lines, a question that CGID posed above.

 

I'm fairly certain the recommendation here would be to not apply for a card at this time.  How are your credit scores?  Are you already able to secure the best interest rates on a mortgage?  If so, no need to take another HP right now.  "If it ain't broke, don't fix it." 

 

I would however strongly recommend taking on at least one, ideally 3 credit cards in the future though as they would certainly do great things for your credit profile.

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Revelate
Moderator Emeritus

Re: Credit card/mortgage simulation question

To add what others have stated, you'd likely get 30 points on FICO 8 but that's not the case on the scores that mortgages are underwritten on.

 

What are you at currently according to the lender's pull, and what mortgage product are you using?




        
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