Reogranizing my financial structure

[aludian]

Hi all,

     I am new here so bare with me. I hope I have posted this in the right place. My current credit score is 759. It was 780 at the beginning of this month but let me explain what happened. I applied for a Barclaycard Rewards Mastercard (Excellent Credit) when it was 780. It dropped one point to 779 not a big deal. 4 days later out of nowhere Bank of America closed a credit line I had with them of $16,000. I was upset because back in August of last year when I called to ask if I could utilize it they said they no longer offer that account anymore. When I asked if it could be transferred to a new account they did not want to do that. So a credit line was sitting there for months with no way of using it then they close it. Thus my score dropped 20 points to it's current 759. Now all the while my goal has been to get out of Bank of America for a series of reasons. Thankfully the Barclaycard was to replace a Bank of America credit card I have. Currently I have:

     BB&T car loan - $16,000/$21,000

     Barclaycard iTunes Visa - $2,000/$12,500 (financing card for balance transfers) [My oldest card opened 6/2007]

     Barclaycard Rewards MC - $5,000

     Bank of America Rewards Visa - $9,000

I don't have much really. Total credit utilization is around 11% I believe. I have also never missed a payment in my life. The Bank of America credit card on my report says,"no limit reported" so I am not sure if that is included in the utilization. I wish I had my original credit card I opened when I was 18 but that's all in the past. I can only look forward from here. Currently on my report I have 11 total accounts (4 open, 7 closed). Now eventually those closed accounts will begin to drop off of the report but I still have some time.

Now I would like to close the Bank of America credit card so I am completely out of that bank. My question is, do I need to look at more credit or store cards or can someone get to an 800 score with just 2 credit cards? Also, how can I begin to repair the damage that has happened? and lastly,  if I do close the Bank of America card does that then give me the option of getting credit elsewhere since I'm no longer over extended with credit to income?

Thank you

[InvincibleSummer3]

Hi Aludian - welcome!

It is possible to get to an 800 score with two cards. FICO isn't dependent on how many cards you have. You're in pretty good shape, but this may help:

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/Your-Guide-to-Credit-Scoring/m-p/718550#M1168...

You car loan isn't a revolving account, so it's not as heavily weighed in the score. What does your utilization look like on each card? You said 11% across the board, but about half the utilization score comes from utilization on individual accounts. If you have one account at 95%, and all others at 5% but your average is still low - you could still see a score ding for that one maxed out account.

Also - are you applying for any major purchases? I wouldn't get too wound up about your score, unless you need it for a credit event of some sort.

[aludian]

Thank you for the welcome. The goal for me is a townhouse purchase around October of this year. My utilization is just the $2,000 on the iTunes card. The rest I only charge on here and there then pay off. The goal is to have that near paid off by the time I apply for the home. I am not sure if it is realistic to try to get an 800 by October but I would like to have creditors give me the best possible home mortgage rate.

[InvincibleSummer3]

Generally speaking, you'll want to steer clear of applying for new credit for six months prior to a mortgage. So keep that in mind. You have great payment history, your utilization is fine and you have a plan for continuing to pay that down. I think you're in a pretty good place. Six months of continued on-time payment and your score will rebound.

This might be worth a chat with your mortgage lender, but I would be willing to bet there's not going to be much difference in the interest rate between a 760 and 800 score. Both are very high, and a 760 is certainly not going to keep you from getting a great mortgage. When you said in your first post you thought you might be overextended with credit to income - this might be another question for your mortgage lender. I haven't heard, before now, that this was a concern. You have a great credit report.  I don't see much to worry about here.

[andydallas1]

Anything over a 740 mid-score should get you the best rates. 

The underwritter will look at your DTI ration, if all of your monthly credit obligations, including the new house payment (including insurance and taxes) is over 45% of your monthly gross you will have a problem.  They do not take into account regular monthly bills like utilities, health insurancea, etc, just debt service.