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mortgage and new cc

jnk2001
Member

mortgage and new cc

I know you shouldn't mess with your credit while trying to get a mortgage.  but, I have a first premier cc coming due and it costs. also has 63.99% interest(which i pay off monthly). I want to replace it for a cheaper Orchard bank card.(24%interst).  does anyone know how much of my score will take a hit If I close the more expensive one and open a cheaper one? the LO says I need 3 cards as a payment pattern

Message 1 of 11
10 REPLIES 10
kwesi
New Contributor

Re: mortgage and new cc

dont close the card..pay it off and stop using it..pay the yearly fee and call it a day for 48 months..it look better that way..you don't pay interest if you don't use it..

Message 2 of 11
cassembler
Frequent Contributor

Re: mortgage and new cc


@jnk2001 wrote:

I know you shouldn't mess with your credit while trying to get a mortgage.  but, I have a first premier cc coming due and it costs. also has 63.99% interest(which i pay off monthly). I want to replace it for a cheaper Orchard bank card.(24%interst).  does anyone know how much of my score will take a hit If I close the more expensive one and open a cheaper one? the LO says I need 3 cards as a payment pattern


If they're saying you need three cards, do they mean three accounts? Would a car loan work, etc? And I take that to mean you were not pre-approved?

 

If that's the case, then what kind of scores are we workign with? If you're seriously thinking about a mortgage, I would think you may be in good enough shape to at least go for a Cap1 or something. Regardless, applying for new credit in order to get a mortgage will take a solid six months to really work at all, from what I understand. You might need to grow your score over the next six months or a year, in other words.

 

But +1 to above, don't close the card. Zero out the balance and stick it in the freezer (i.e. don't use it).

"Credit is purely a cash flow tool. Thinking of credit as extra money you didn't have before makes it an EXPENSIVE cash flow tool."
Message 3 of 11
LondonMassey
Frequent Contributor

Re: mortgage and new cc

Is 63.99% interest even legal?? Holy geesh!!

Cap1(sc) 550, Cap1 750, Walmart 750, Home Depot 3000, Amazon 700, US Bank 1500, Childrens Place 1100, JC Penney 700, Old Navy 700, PayPal 700, Torrid 700, Lane Bryant 150, Avenue 500, OSP 500, Amex Blue 2000, Disc it 1000, Walmart Disc 2200, Old Navy Visa 1700, Mortgage 09-2012, Car Loan 03-2013



Current Score: EQ 665 EX 687 TU 695


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Message 4 of 11
eduardofabian1
Established Member

Re: mortgage and new cc

Don't even think of closing an account, you will take a big hit in your score. Next, do not substitute a 64% card with a 20 something % card. Wait until you find a better deal or get a secured one. You can find one within the 12% to 18% range, a lot better than 24%.

Message 5 of 11
Booner72
Senior Contributor

Re: mortgage and new cc

Leave it alone. 

STARTING: 11/24/10 EQ-584 EXP-648 TU04-595
CLOSED FIRST HOME 8/19/11 EQ-630 EXP-691 TU04-653
CURRENT: EQ-701 EXP-??? TU08-720
Message 6 of 11
StrateUp
Regular Contributor

Re: mortgage and new cc

Closing a credit card only affects credit history. The harder hit would be to open a new card when you are also aplying for a mortgage. Your existing credit cards are going to raise eyebrows when you aply for the mortgage let only aply for a credit card and a mortgage at the same time. Your other cards are likely to limit chase you down to zero credit limit after to aply for the home loan. But then again I presume that if you have a 64% interest credit car you probably don't have a second crediti card.

Asstore card, two regular revolving accounts and a car payment are more than enought to get you a home financed if the numbers are good and you have a few years history.

Message 7 of 11
StrateUp
Regular Contributor

Re: mortgage and new cc

BTW, Orchard sux.

Message 8 of 11
MarineVietVet
Moderator Emeritus

Re: mortgage and new cc


@eduardofabian1 wrote:

Don't even think of closing an account, you will take a big hit in your score. Next, do not substitute a 64% card with a 20 something % card. Wait until you find a better deal or get a secured one. You can find one within the 12% to 18% range, a lot better than 24%.


What would cause the damage to the score?

Message 9 of 11
MarineVietVet
Moderator Emeritus

Re: mortgage and new cc


@StrateUp wrote:

Closing a credit card only affects credit history. The harder hit would be to open a new card when you are also aplying for a mortgage. Your existing credit cards are going to raise eyebrows when you aply for the mortgage let only aply for a credit card and a mortgage at the same time. Your other cards are likely to limit chase you down to zero credit limit after to aply for the home loan. But then again I presume that if you have a 64% interest credit car you probably don't have a second crediti card.

Asstore card, two regular revolving accounts and a car payment are more than enought to get you a home financed if the numbers are good and you have a few years history.


Closing a card will not affect either the AAoA or credit length history. This is discussed here: Closing Credit Cards.

Message 10 of 11
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