Re: Closing credit cards and AofA - future mortgag... - myFICO® Forums

Anonymous · ‎10-12-2020

We'll be doing a construction loan end of December and I'm trying to be proactive to put ourselves in the best place. We have our 20% down, so we're trying to see what else we need to work on. I don't want to make the wrong move and take months to recover.

I have 2 credit cards, 2 authorized user cards, no installments and no mortgage, I'd like to remove the AU accounts. If my oldest CC (non AU) remains, will removing the AU CCs hurt me? My other card is a couple years old.

My hubby has 5 CCs, 1 personal loan that's almost paid, 1 car loan and a mortgage that'll be paid next week. His largest CL is $38k and is his second to oldest card. I would imagine the bank would like to see that one closed due to the high limit. I'd honestly like it closed due to Amex not wanting to lower the APR with even a zero balance and 100 points higher on his score. We carried a very high balance on it while renoing our house, but it's low now. His other cards are low APR cards with CLs around 15k. How much would removing that much available credit and the second oldest card have on his score? Would it be better to have Amex lower the credit limit or would that look bad?

Thanks!

dragontears · ‎10-13-2020

@Anonymous wrote:
We'll be doing a construction loan end of December and I'm trying to be proactive to put ourselves in the best place. We have our 20% down, so we're trying to see what else we need to work on. I don't want to make the wrong move and take months to recover.

I have 2 credit cards, 2 authorized user cards, no installments and no mortgage, I'd like to remove the AU accounts. If my oldest CC (non AU) remains, will removing the AU CCs hurt me? My other card is a couple years old.

My hubby has 5 CCs, 1 personal loan that's almost paid, 1 car loan and a mortgage that'll be paid next week. His largest CL is $38k and is his second to oldest card. I would imagine the bank would like to see that one closed due to the high limit. I'd honestly like it closed due to Amex not wanting to lower the APR with even a zero balance and 100 points higher on his score. We carried a very high balance on it while renoing our house, but it's low now. His other cards are low APR cards with CLs around 15k. How much would removing that much available credit and the second oldest card have on his score? Would it be better to have Amex lower the credit limit or would that look bad?

Thanks!

Closing a card with a high limit will not increase your score and will NOT make getting a mortgage easier. Mortgage lenders don't care about credit card limits (if you find one that tells you to close the card, find a new lender). Closing cards will not help your mortgage scores.

What are your current middle scores? Do you need to increase them? December is not that far away so be really careful about making changes to your credit profile.

Dmessina666 · ‎10-13-2020

Pull your 3 bureau reports from MF and find your middle score to see where you're at.

As far as closing a card that has a high limit, absolutely not. I'm pretty sure lenders don't care about limits, but they'll be factoring in balances into your DTI. Like the post above, December is right there so be careful on what you start changing prior to the mortgage. Pay down some balances if you have any on cards. Mortgage scores are very sensitive to utilization and new accounts. So I wouldn't open any until after closing and it's funded.

SouthJamaica · ‎10-13-2020

@Anonymous wrote:
We'll be doing a construction loan end of December and I'm trying to be proactive to put ourselves in the best place. We have our 20% down, so we're trying to see what else we need to work on. I don't want to make the wrong move and take months to recover.

I have 2 credit cards, 2 authorized user cards, no installments and no mortgage, I'd like to remove the AU accounts. If my oldest CC (non AU) remains, will removing the AU CCs hurt me? My other card is a couple years old.

You don't give us any information about the AU account. Is it much older than your cards? What kind of utilization does it have?

My hubby has 5 CCs, 1 personal loan that's almost paid, 1 car loan and a mortgage that'll be paid next week. His largest CL is $38k and is his second to oldest card. I would imagine the bank would like to see that one closed due to the high limit.

He should NOT close the card.

I'd honestly like it closed due to Amex not wanting to lower the APR with even a zero balance and 100 points higher on his score.

He should NOT close the card.

We carried a very high balance on it while renoing our house, but it's low now. His other cards are low APR cards with CLs around 15k. How much would removing that much available credit and the second oldest card have on his score? Would it be better to have Amex lower the credit limit or would that look bad?

He should not touch that card. Period.

Thanks!