Need Help - Lost in Credit

For just about anything you want to get off your chest about credit cards.
5 posts
tc200
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Need Help - Lost in Credit

Postby tc200 » Thu Dec 04, 2014 7:57 am

I have been reading on this forum and you guys seem to know your stuff so hopefully you can help me out ...

My situation: I currently have a Capital One Secured Card (750 limit) and an Auto Loan that are in good standing, never missed a payment, no neg etc. both are a little over 2 years old. However, my wife and I recently tried to buy a short sale and through the process racked up 6 hard pulls over the course of the year, wish I had known better but was caught up in the awe of potentially being a homeowner and didn't know how to properly shop for a mortgage, deal fell through (bad septic).

On the last pull from the mortgage company my median score went down from 722 to the current Eq: 714 Ex: 712 Tu: 739, making us need to pay ~150 more per month due to a higher rate. We are still trying to find a home so will need at least one more pull in the next 6 months to secure a mortgage. While we are trying to find something, I would like to get my score back up (Target: 720+) so we can get the best rates available when the time comes. My wife has great credit >750 so of course I feel like a loser for being the reason we are in this mess and want to fix it.

Since I only have 2 lines of credit our mortgage broker insisted that I should get a third to avoid having to use non-traditional credit (difficult as we currently live with family). I am pre-qualified for the Chase Freedom card and it seems like it fits my needs the best (gas bonuses and stores that I frequent). But, when I did the credit simulator through Capital One and put in another card with a $1000 limit, 2 hard pulls and 6 months of good payment it says my score would go down to 697, yikes! I would hate to apply and be denied or see my score go down so that brings me here.

My questions: 1) Do you think I would be approved for the Chase Freedom card with the 6 inquiries and current credit scores and 2) Do you think it will help or hurt my score to get the card, balance will be paid each month, would have at least 4 months of use before the mortgage pull and I will keep util under 10%?

Thanks in advance.


darkguy2
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Postby darkguy2 » Thu Dec 04, 2014 9:44 am

If you a pre-approved then you would most likely get it but that may not be that good. Other may be able to give better advice but I do not see how adding another hard pull on your account and reducing your AAoA by opening a new card will help you. Of all the things that cause bad credit inquiries as the ones that drop off the fastest. They will be removed after only 2 years instead of the 7 years for other items, but most creditors do not consider ones that are older than 6 months. We used to have a guy on here that recently went through the same process you did and could of probably given some good advice but I am sure other also have experience and will be better than me in telling you what your next steps would be.
Discover IT - $5,700
Chase Freedom - $5,700
Costco Citi - $13,000
Sallie Mae - $4,000
Chase Sapphire Preferred - $6,000
Chase Sapphire Reserve - $19,500
Citi Double Cash - $6,500
Amex BCE - $13,000

FICOs: Discover (777), SallieMae (764), Amex (767), Citi (772)
FAKOs: CK- TU (760), EQ (760)

tc200
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Location: New Jersey

Postby tc200 » Thu Dec 04, 2014 10:25 am

darkguy2 wrote:If you a pre-approved then you would most likely get it but that may not be that good. Other may be able to give better advice but I do not see how adding another hard pull on your account and reducing your AAoA by opening a new card will help you. Of all the things that cause bad credit inquiries as the ones that drop off the fastest. They will be removed after only 2 years instead of the 7 years for other items, but most creditors do not consider ones that are older than 6 months. We used to have a guy on here that recently went through the same process you did and could of probably given some good advice but I am sure other also have experience and will be better than me in telling you what your next steps would be.


So I guess there in lies my issue which is better: Only 2 lines of credit with better AAoA, maintain for 6 months and no more hard pulls or 3 Lines of Credit, with the third in good standing for 6 months, with a shorter AAoA and 1 additional hard pull

takeshi
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Postby takeshi » Fri Dec 05, 2014 4:05 pm

The general advice is no new credit 6 months to 1 year prior to a mortgage so I'm not sure why your broker is making such a recommendation. Your broker should have a good understanding of your situation and where you need to be to qualify. However, I can't speak to the level of knowledge and expertise of your broker.

Do not rely on prequals. We can't tell you what your approval odds will be nor what your scores will be for any scenario. There are a number of factors at play and it all depends on the overall impact of all those factors.

What we can say is that derogs tend to have a major impact. When did you last pull your credit reports? Do you have any derogs? If so, get them addressed.

Second biggest factor is utilization so ensure that your reported utilization is optimized so that only oe balance is reporting at 10% or less. You need to pay down balances prior to statement end (or whatever dates your cards report) to change reported utilization.

LianaCCB
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Postby LianaCCB » Mon Dec 08, 2014 2:34 pm

I know for business credit accounts, the lenders like to see at least 3 established revolving credit accounts minimum. The inquiries can be disputed/removed, but it would be good to open another account or so.

Mostly for my clients, the mortgage lenders are focused on the score. Not necessarily what makes up the report. (Example - need 640 score). So the inquiries may be overlooked if there's enough good credit to bump the scores up to where they need to be.



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