Hi all!
I'm looking to buy a home in July or August of this year and my wife has been working to clean up my credit report since January of 2007. My score then was 538. She sent validation request letters to 14 negative entries on my report, 3 were validated (which we then paid), others either didn't report again or fell off (7 years), and I pulled my FICO today. 707.
We took out an auto loan for $2791 in May 2007 (score then was 598) and another for $13,648 in June 2007. We have been current since. Actually, we're sending our credit union a check for the payoff of $1857 on Friday so that amount will be gone and we'll just have a remaining balance of $12,475 on the bigger loan. (My wife just loves those paper trails.) No other items have been reported since November 2007, just those two [current] loans. There are no other debts between the two of us. I gross $80K/year and my wife is a stay at home mom to our 3 children.
We don't want to take out any credit at ALL until after we're in our new home, whatever it is. The loan amount we're looking at is about $100K. Under FHA, we'll put down the $3K (3%.) We have an emergency fund of $15K and are building substantial savings.
To me, we look good for a home loan but my wife is anxious. Is there something I'm overlooking? Would taking out a credit card do anything to increase my FICO score? She worries that just the two loans is too little diversity but that obtaining a credit card so close to applying for a mortgage would only have the potential to make it worse.
FICO gurus... what do you think?