How much will this potentially impact...

[Anonymous]

I have been vigorously working on my credit over the past several months and I am oh-so-close to being able to qualify for a mortgage.  I have had a company helping me repair my credit and whether it has been successful yet or not is debatable.  

They did, however, recommend I open a small, secured credit card and keep the balance low to help improve my credit.  Here is my issue:

I am literally 20ish points away from being able to qualify for the mortgage.  Although Experian only gives me my PLUS score, I received a credit alert 2 days ago that my score increased by 35 points (not sure how much this increase impacts my Experian FICO score).  The bank is going to pull my credit again in Aprilt to see how far we've come since last month.  If this 35 point increase in PLUS score affects my FICO the same way, I'm in good shape.  

If I go ahead and open this secured credit card, how much will the opening of the account initially impact my credit score? I know there will be a 2 steps back, 1 step forward type of deal at first, but being as close as I am now, and with April quickly approaching is it worth  my while to even do this at this point?

I guess my main question is, how many points does opening a new secured credit card account impact a score?

Thanks in advance for your help.

[Lel]

There may be no correlation whatsoever between your Experian PLUS score and your FICO score.  What changed in your credit report that caused your PLUS score to go up?  If there is an identifiable change that is a clearly positive factor, then your actual Experian FICO score may have gone up as well.  But it's impossible to determine the number of points you might have gained.

Opening a new credit card will 1) result in a new inquiry and 2) result in a new account that will lower your average age of accounts.  This will probably lower your score in the near term.  Are you trying to qualify for a mortgage by April in order to get the first-time homebuyer's tax credit (that's what I gather from your "April is quickly approaching" comment)?  If so, then opening a new card now may not be a good idea.

Keep in mind that mortgage lenders do not like to see new accounts opened shortly before applying for a mortgage.  Also remember that there is much more to mortgage approval than a credit score.  The underwriters will look at the contents of the credit report as well as other data (income, employment history) to determine whether you qualify.  If you have late payments within the last year, excessive debt obligations, an irregular recent work history, recent collections or judgments, etc, these could all block your mortgage application.

It sounds like you've been working with a credit repair company, not a loan officer.  If you haven't done so already, you should sit down with a mortgage loan officer before making any more credit moves.