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Mortgage Application - No Credit Cards

romcom2021
New Member

Mortgage Application - No Credit Cards

WHi!

I recently applied for a mortgage and my middle score is 659.  I have no active credit cards and only two auto loans on my credit.  How do I get to 700? 

We don't close until January 22, so time to get it higher I'm just not sure what to do.  

I was quoted a rate of 3.625% which seems really high to me.

 

help!  

Message 1 of 20
19 REPLIES 19
AllZero
Super Contributor

Re: Mortgage Application - No Credit Cards


@romcom2021 wrote:

WHi!

I recently applied for a mortgage and my middle score is 659.  I have no active credit cards and only two auto loans on my credit.  How do I get to 700? 

We don't close until January 22, so time to get it higher I'm just not sure what to do.  

I was quoted a rate of 3.625% which seems really high to me.

 

help!  


Did you at some point have a revolving account (credit card)?

 

Do you have any close cards reporting a balance?

 

Ideally, you want at least one open revolving account (credit card).

 

3.625% isn't too shabby.

Message 2 of 20
romcom2021
New Member

Re: Mortgage Application - No Credit Cards

Had a few charge offs that have all been paid.  All reporting zero balance now.  There were only two.  

Message 3 of 20
GrandBay
Regular Contributor

Re: Mortgage Application - No Credit Cards

pay down the auto loans

try to get them below 18 months balance (not sure when they were opened)

having a great DTI will help your scores

it seems that you were pre-approved

if yes, I would refrain from opening new accounts until AFTER closing

your best bet would be to garden until February 2022

Message 4 of 20
AllZero
Super Contributor

Re: Mortgage Application - No Credit Cards


@romcom2021 wrote:

Had a few charge offs that have all been paid.  All reporting zero balance now.  There were only two.


Was the MMS 659 before or after the paid off, charge off accounts reporting a zero balance?

Message 5 of 20
romcom2021
New Member

Re: Mortgage Application - No Credit Cards

FICO is telling me that my mortgage score is hurt by not having a credit card.  I don't know if this is true or not.

 

at what point would my mortgage rate go down?  

one auto loan is almost at the 18 month mark.  It will be in October.

Message 6 of 20
romcom2021
New Member

Re: Mortgage Application - No Credit Cards

After 

Message 7 of 20
AllZero
Super Contributor

Re: Mortgage Application - No Credit Cards


@romcom2021 wrote:

After 


Time since delinquency / derogatory will allow your scores to heal. In general, the more time that passes, the better. January 2022 may not be enough time for that separation.

Message 8 of 20
TrialByFire
Established Contributor

Re: Mortgage Application - No Credit Cards

Yes, you are penalized for not only NOT having revolving credit, but also for NOT reporting some sort of balance on said card(s). FICO is just a number generated according to how well you take on debt and pay it back. So you can get a better interest rate on future debt. 

 

3.625% isn't bad at all. Besides, you're kind of in a gray zone on timing where opening a credit card might gain you points for having one, but your net gain may be negligible when you take the hit for a new account. You may also have to explain it later to UW. It's a racket honestly. Ok, rant over.


Focus on healthy financial habits and not the almighty FICO score. If I were you, I'd sit tight right where you are and focus on having a healthy savings and paying down the auto loans. Best of luck to you and congrats on your future home 

Starting scores: 495
12/19/15: EX: 703 TU: 709 EQ: 709
Message 9 of 20
AllZero
Super Contributor

Re: Mortgage Application - No Credit Cards


@romcom2021 wrote:

FICO is telling me that my mortgage score is hurt by not having a credit card.  I don't know if this is true or not.

 

at what point would my mortgage rate go down?  

one auto loan is almost at the 18 month mark.  It will be in October.


It all depends if you will be content with that 3.625%

 

There are steps you could take. However, it may or may not get you to your desired MMS 700.

Message 10 of 20
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