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Total CL: $321.7k | UTL: 2% | AAoA: 7.0yrs | Baddies: 0 | Other: Lease, Loan, *No Mortgage, All Inq's from Jun '20 Car Shopping |
You are projecting that the closed accounts will fall off your reports 10 years from the DOLA. Just for clarity, the correct date to use is not the DOLA but the Date Closed. And of course, as you likely know, it is possible for accounts to fall off before that ten year mark (e.g. 9 years) though I think it is reasonable to assume they will fall off at ten years (or possibly a month earlier).
You have created two unnecessary constraints for yourself, i.e....
(a) To have an AAoA of 7.0 before you buy a house
(b) To have more open accounts than you do now when you buy a house
A huge number of people buy a house at best rates with an AAoA of a little over 4.0. Some may get best rates with an even lower AAoA, like 2.1.
And as far as number of accounts, you currently have four open cards (three major cards and one store card) which will be open when you buy the house. Your SSLs will be closed, but closed accounts also have value. You will also likely have an open auto loan at that time. That's four open cards, one open loan, and two closed loans. That's plenty of accounts for any mortgage lender.
That said, I can see why you might want to have 1-2 more cards. (It won't help you with your auto or home loan, but I can imagine just feeling like you want 1-2 more.) In that case I would recommend dropping the constraint of needing to have an AAoA > 7.0 at the time of home purchase. I'd wait until all of your current accounts and inquiries are > 13 months old. Then pull your three FICO 8 scores and use soft-pull tools to check pre-approval for the cards you are considering.
@Anonymous wrote:You are projecting that the closed accounts will fall off your reports 10 years from the DOLA. Just for clarity, the correct date to use is not the DOLA but the Date Closed. And of course, as you likely know, it is possible for accounts to fall off before that ten year mark (e.g. 9 years) though I think it is reasonable to assume they will fall off at ten years (or possibly a month earlier).
You have created two unnecessary constraints for yourself, i.e....
(a) To have an AAoA of 7.0 before you buy a house
(b) To have more open accounts than you do now when you buy a house
A huge number of people buy a house at best rates with an AAoA of a little over 4.0. Some may get best rates with an even lower AAoA, like 2.1.
And as far as number of accounts, you currently have four open cards (three major cards and one store card) which will be open when you buy the house. Your SSLs will be closed, but closed accounts also have value. You will also likely have an open auto loan at that time. That's four open cards, one open loan, and two closed loans. That's plenty of accounts for any mortgage lender.
That said, I can see why you might want to have 1-2 more cards. (It won't help you with your auto or home loan, but I can imagine just feeling like you want 1-2 more.) In that case I would recommend dropping the constraint of needing to have an AAoA > 7.0 at the time of home purchase. I'd wait until all of your current accounts and inquiries are > 13 months old. Then pull your three FICO 8 scores and use soft-pull tools to check pre-approval for the cards you are considering.
+ 1
I purchased my first house with 2 credit cards, a car loan, and about 4 years of history.
( Got an excellent interest rate also)
No need for new cards at this time.
If you want new cards for better rewards, etc, I would wait at least a year maybe two.
You will be able to get better starting limits and better cards the longer you wait.
This far out you have plenty of time.
@Late2theGame wrote:
Thanks Kforce,
Getting the best possible rates is a necessity for me, not just because I don't like throwing money away (though inbound sight I have done plenty of that), but also because I don't make a whole lot and you can't buy a home around here for under 350k unless it's falling apart or even a 900sqft condo for under 200k.
What rate you get is determined by a lot of factors with # of credit cards not near the top.
Income, time with current employer, income to dept ratio, percent of down payment, etc are all considered.
750+ credit scores with 3 CC's and a loan will get you top tier.
675-749 credit scores with 2 CC's and a loan will get you second level
It's promising to hear I may not need to shoot for the goals I thought I would. Though I do want to have a good well rounded credit file and a high score for the sake of having one ( and I don't think that's necessarily a bad thing).
It is not a bad thing, but saving up more for a larger down payment , not changing jobs, and not lowering AAoA might be better than getting more cards. If you get a couple of cards, get them 1.5 --2 years from now and no more cards.
Add: One of the worst things I did that I felt hurt me a lot was close my accounts and decide to go cash only after the 30 andc60 day lates. It did teach me a lot about fiscal responsibility, but I had also resided to give up on my goal of owning a home st the time. It also cost me a lot of time and money and the teaching of fiscal responsibility came through the cost of foolish mistakes.Yes, keeping the card's alive would have been better, but you did learn to live within your budget by cash spend. Many if not all will spend less with cash than using CC's. The rewards are off set by overspending. (My Opinion). I try but often fail, I would spend less if I had no CC's but it is a necessary evil. Yes "Fico" is evil!