Mortgage approval question

[vinathi]

Hello folks, 

I am planning to apply for a mortgage in 4 to 5 months. I started building my credit about 6 months back. My current FICO 8 scores are in between 720 to 740.  I currently have X1, Apple, DCU, Discover, American Aviator, Amex Platinum, Amex Blue, Sofi, GM by Marcus, and an authorized user on 2 cards. My current income is $104k, I live in OHIO. I mostly pay off my cards before the statement gets generated. I heard mortgage approvals are sensitive on how many accounts you have, this is really making me worried. My question is can I close all my cards except large limit cards like X1 (17k), Apple (10k), GM by Marcus (8k), or else, just keep X1 and close everything? 

Will this help boost my mortgage approvals? My current mortgage FICO scores are 713 (EQ), 700 (TU), 696 (EX).

Your suggestions will really help me achieve great interest rates for mortgages.

Thanks

Vinathi

[chiefone4u]

---

@vinathi wrote:

Hello folks, 

I am planning to apply for a mortgage in 4 to 5 months. I started building my credit about 6 months back. My current FICO 8 scores are in between 720 to 740.  I currently have X1, Apple, DCU, Discover, American Aviator, Amex Platinum, Amex Blue, Sofi, GM by Marcus, and an authorized user on 2 cards. My current income is $104k, I live in OHIO. I mostly pay off my cards before the statement gets generated. I heard mortgage approvals are sensitive on how many accounts you have, this is really making me worried. My question is can I close all my cards except large limit cards like X1 (17k), Apple (10k), GM by Marcus (8k), or else, just keep X1 and close everything? 

Will this help boost my mortgage approvals? My current mortgage FICO scores are 713 (EQ), 700 (TU), 696 (EX).

Your suggestions will really help me achieve great interest rates for mortgages.

Thanks

Vinathi

---

Mortgage scores are sensitive to new accounts (closing the account doesn't help), and number of cards reporting a balance... utilization is also a major factor.

For best scores, you'll need no more than 1/3 of cards reporting a balance. 

Practicing AZEO pretty much gets your scores to there best. Your one card reporting needs to be a major credit card, not credit union or store card, this card should have a minimum balance of $10 and no more than 8% of limit report (you can pay the balance after statement is created and before due date to prevent paying interest).

It has been experienced by many (including myself) that cards you are an authorized user for need a small balance as well to maximize score.

From what you've listed, I do not believe closing any account will benefit you. I would be sure not to open any more accounts (besides Mortgage) until after you get the keys to your new home.

[VALoanMaster]

---

@vinathi wrote:

Hello folks, 

I am planning to apply for a mortgage in 4 to 5 months. I started building my credit about 6 months back. My current FICO 8 scores are in between 720 to 740.  I currently have X1, Apple, DCU, Discover, American Aviator, Amex Platinum, Amex Blue, Sofi, GM by Marcus, and an authorized user on 2 cards. My current income is $104k, I live in OHIO. I mostly pay off my cards before the statement gets generated. I heard mortgage approvals are sensitive on how many accounts you have, this is really making me worried. My question is can I close all my cards except large limit cards like X1 (17k), Apple (10k), GM by Marcus (8k), or else, just keep X1 and close everything? 

Will this help boost my mortgage approvals? My current mortgage FICO scores are 713 (EQ), 700 (TU), 696 (EX).

Your suggestions will really help me achieve great interest rates for mortgages.

Thanks

Vinathi

---

Hi @vinathi,

Do you know what your mortgage scores are?

Mortgage lending is typically more sensitive to not having enough open accounts so there's no reason to close any of your accounts.

[vinathi]

Hi @VALoanMaster ,

Thanks for responding. My current mortgage FICO scores are 713 (EQ), 700 (TU), 696 (EX). MyFICO was showing some suggestions why my scores were hurting. That's why I asked, whether I can close the accounts.

Thanks

Vinathi

[dragontears]

---

@vinathi wrote:

Hi @VALoanMaster ,

Thanks for responding. My current mortgage FICO scores are 713 (EQ), 700 (TU), 696 (EX). MyFICO was showing some suggestions why my scores were hurting. That's why I asked, whether I can close the accounts.

Thanks

Vinathi

---

"Many new accounts" can't be changed by closing accounts. Open or closed new accounts are still new.

"accounts with a balance" refers to the number of accounts reporting a balance; closing cards would make this worse as the total number of open accounts decreases but not the number of accounts with a balance. This metric is believed to be a ratio not a raw number. 

[chiefone4u]

---

@vinathi wrote:

Hi @VALoanMaster ,

Thanks for responding. My current mortgage FICO scores are 713 (EQ), 700 (TU), 696 (EX). MyFICO was showing some suggestions why my scores were hurting. That's why I asked, whether I can close the accounts.

Thanks

Vinathi

---

Time is the only thing that will fix the suggestions given. 

Once an account is added to your credit file, that account continues to count towards age regardless of being opened or closed.

Accounts are scored as new for 2 year's, so that derogatory will likely still be listed in 6 months.

[donkort]

A 700 middle score isn't bad-----but I would boost it up, anyway.   If you get above a 720, your interest rate will probably be lower.

[vinathi]

Thanks for all the suggestions folks. I will keep them open and will not open any accounts for 6 months before applying for mortgage.