Mortgage/credit cards question.

[oldman425]

I currently have several cards with a total of almost 19K in credit limits with around 21% utililation (most of it is on one card).  Will having a large number of cards hurt my chance of getting a mortgage?

[Anonymous]

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@oldman425 wrote:

I currently have several cards with a total of almost 19K in credit limits with around 21% utililation (most of it is on one card).  Will having a large number of cards hurt my chance of getting a mortgage?

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Based on my experience no! As long as your debt to income ratio is not too high

[iheartwings]

I would say no. To maximize your score, the practice of AZEO is often mentioned (that is, all cards are zero except for one). Utilization (which has no memory) should be <10% of your total credit line (and less than 50% of an individual CL). As long as you haven't been seeking credit recently, then you should be fine.

While your FICO mortgage scores are important, your DTI is as well, so if you could pay down your CC balance - you could get a couple things accomplished. Namely, you could maximize you score (see previous paragraph) while also reducing your DTI. 

HTH. 

[oldman425]

Alright, thanks.  I'll get the small stuff paid off and just use one of the cards keeping as close to 10% as I can.

[Anonymous]

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@oldman425 wrote:

Alright, thanks.  I'll get the small stuff paid off and just use one of the cards keeping as close to 10% as I can.

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Great advice by iHeartWings.  AZEO is definitely what you want to do.

The 10% figure is really about your total utilization (counting all credit limits together).  It isn't 10% of that particular card.  Also, the advice is not to keep as close to 10% as you can.  That would mean that 10% would be better than 7%, and 7% would be better than 4%.  The advice is actually to stay UNDER that threshold: a $10 balance reporting on a combined credit limit of $20,000 is fine.

And the threshhold is actually < 8.99%, rather than 10%.  More than 8.99% and you will incur a scoring penalty.

Basically you can make it really simple and just keep all cards at $0 with one card reporting at $10-20.  Boom.  You're done.

PS.  It looks like you have seven cards.  It's a real nice number.  4-5 would be fine too.  But 7 is really not a lot of cards.  Believe it or not, 20 cards is not uncommon here.

[oldman425]

Awesome advice.  Offically I'm not able to apply for a mortgage until April/May 2017, my Chap 13 was discharged March 2015.  So I will zero out all the small amounts owed and will try to get the big one down where it needs to be as soon as I can.  Thanks again for the help!