Should I add a new card to optimize score?

[Anonymous]

Hello there!

I’m looking to optimize my credit scores as I plan to refinance my mortgage and am looking for advice on some strategies. ThAnk you in advance to all who post here.
I want to figure out if I should add a credit card.

Currently I have a mortgage, (2 years old) and a car loan(3 years old), and 1 credit card, 1 Amex charge card, and I’m am an authorized user on another card (my husband’s), that is reported on my credit reports. My average age of a counts is 7.5 years and oldest account is about 15 years. I have a couple of closed fully paid off car accounts and two paid off mortgage accounts.

I’m trying to figure out if it is worth adding another credit card since I only have one actual credit card In My name (plus the amex). I don’t need another credit card but wondering if it will help or hinder since it will bring down my account age, but add another credit line.

My utilization is very low: I pay off each month. I have no serious delinquency, but several random 30 day lates on a few accounts.

Thanks for any advice!

[AllZero]

When do you plan to apply?

What are your current mortgage scores?

It is recommended not to apply or obtain new accounts 12 months leading up to a mortgage application.

Have you considered trying the Good Will Saturation Technique? Those lates are suppressing your scores.

[SouthJamaica]

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@Anonymous wrote:
Hello there!

I’m looking to optimize my credit scores as I plan to refinance my mortgage and am looking for advice on some strategies. ThAnk you in advance to all who post here.
I want to figure out if I should add a credit card.

Currently I have a mortgage, (2 years old) and a car loan(3 years old), and 1 credit card, 1 Amex charge card, and I’m am an authorized user on another card (my husband’s), that is reported on my credit reports. My average age of a counts is 7.5 years and oldest account is about 15 years. I have a couple of closed fully paid off car accounts and two paid off mortgage accounts.

I’m trying to figure out if it is worth adding another credit card since I only have one actual credit card In My name (plus the amex). I don’t need another credit card but wondering if it will help or hinder since it will bring down my account age, but add another credit line.

My utilization is very low: I pay off each month. I have no serious delinquency, but several random 30 day lates on a few accounts.

Thanks for any advice!

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It will hinder.

The best thing you can do for your mortgage scores is not apply for new credit.

[BallBounces]

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@SouthJamaica wrote:

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@Anonymous wrote:
Hello there!

I’m looking to optimize my credit scores as I plan to refinance my mortgage and am looking for advice on some strategies. ThAnk you in advance to all who post here.
I want to figure out if I should add a credit card.

Currently I have a mortgage, (2 years old) and a car loan(3 years old), and 1 credit card, 1 Amex charge card, and I’m am an authorized user on another card (my husband’s), that is reported on my credit reports. My average age of a counts is 7.5 years and oldest account is about 15 years. I have a couple of closed fully paid off car accounts and two paid off mortgage accounts.

I’m trying to figure out if it is worth adding another credit card since I only have one actual credit card In My name (plus the amex). I don’t need another credit card but wondering if it will help or hinder since it will bring down my account age, but add another credit line.

My utilization is very low: I pay off each month. I have no serious delinquency, but several random 30 day lates on a few accounts.

Thanks for any advice!

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It will hinder.

The best thing you can do for your mortgage scores is not apply for new credit.

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The OP did not indicate when they might apply for a refinance mortgage.  Depending on that answer, it may help or hinder.  If under a year, I think we all agree it would hinder. 

They also did not include current utilization or credit lines, which may also come in to play.  But yes ... if an application for refinance is imminent, new credit will not help things ...

[Anonymous]

Thank you all! I am not in any rush to refinance: likely not in next year but just want to be ready.

In answer to some of the questions: my 30 day lates, I am trying to goodwill. They are with M and T bank and American Ho da Finance which from these forums may be receptive so I am starting there. I have a few lates wirh Amex and it seems like they don’t goodwill adjust (again, this is based on what I have seen here) so I am not going to bother.

My utilization is around 1%. But limit is low: 18k across my two cards (one an AU). I also have the Amex but that is a charge card. Mortgage was for 225k and is now at around 200k and car loan is about 33% paid.

Thank you!

[HeavenOhio]

Welcome, @Anonymous.

Very occasionally, we see people whose files are so thin or so young that they won't be approved for a mortgage, despite a reasonable score. Your file is both sufficiently thick and old, meaning that you should stick to the general rule of not adding credit within the 12 months preceding your application.

I do see where adding two cards would benefit you from a financial and convenience standpoint. They might or might not bump your score a bit after initial dings for adding them wear off.

If your refinancing is far enough in the future, you can grab a new card relatively soon. In six months, if you see that refinancing is still a year or more away, you can consider another.

Do your homework before applying by checking in here first. You'll get a lot of good advice by listing your current cards along with their balances, limits, and ages (or opening dates) — along with providing an idea of what you'd be looking for in a card (cash back, travel benefits, categories where you have significant spending, etc.).

ETA (edited to add): Also mention any degogatories, i.e. your 30 day lates and their ages).

[Anonymous]

All great advice from the members above. Since you indicated your refi is more than a year out, I think you should definitely add cards to further optimize your scores as you indicated you wanted to do. I have found a 20% breakpoint on the mortgage scores. In order to reach that, you need 5 cards.

That doesn’t mean you have to have five cards, that just means to be able to optimize to the fullest for that metric (and therefore get all available bonus points) would require five cards. You can definitely have great scores with a lesser number of cards.

However, I cannot say whether a charge card would count and I cannot say whether an authorized user card would count. Those are questions that I don’t know and have not tested, although there’s a good chance they would. Either way, adding some cards will help.

Only you know your timeline for the mortgage. But you definitely want to have 12 months with no inquiries or new accounts prior to applying for a mortgage; 18 and 24 months are even better.

So you may want to add a few cards and soon; otherwise, it’s going to push the mortgage out further.

[SouthJamaica]

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@Anonymous wrote:
Hello there!

I’m looking to optimize my credit scores as I plan to refinance my mortgage and am looking for advice on some strategies. ThAnk you in advance to all who post here.
I want to figure out if I should add a credit card.

Currently I have a mortgage, (2 years old) and a car loan(3 years old), and 1 credit card, 1 Amex charge card, and I’m am an authorized user on another card (my husband’s), that is reported on my credit reports. My average age of a counts is 7.5 years and oldest account is about 15 years. I have a couple of closed fully paid off car accounts and two paid off mortgage accounts.

I’m trying to figure out if it is worth adding another credit card since I only have one actual credit card In My name (plus the amex). I don’t need another credit card but wondering if it will help or hinder since it will bring down my account age, but add another credit line.

My utilization is very low: I pay off each month. I have no serious delinquency, but several random 30 day lates on a few accounts.

Thanks for any advice!

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You should not add another credit card. You are perfectly optimized. Applying for a new card, and opening up a new card, will only hurt your mortgage scores, which are very sensitive to new credit, by

-adding an inquiry

-lowering your average age of accounts

-lowering your age of newest account.

You can help yourself by

-paying off your charge card before statement cuts, so that it reports zero balance,

-testing whether your mortgage score is higher or lower when you report a zero balance on the credit card or a nominal balance, and then going with that method until the closing

-writing verification letters to the bureaus about the lates, which sometimes precipitates them falling off your reports

[Anonymous]

^^^ this, completely.

[Anonymous]

Bottom line, it depends on how far out the mortgage app is, as has been said earlier in the thread by more than one member.

If it’s close, we all agree adding cards will hurt you, if it’s far enough away, some of our opinions are that it can help you. I don’t think much more can be said.