Question Details

Rico Sauve, Home Buyer in Nashville, TN

Applying for credit before mortgage application 2013 to boost score

Asked by Rico Sauve, Nashville, TN Sat Jun 8, 2013

I was advised my a mortgage company that my middle/average score is 680. I did not tell the guy there to pull my credit so now my credit file shows a pull for mortgage back on May 1st after just calling to ask questions. I told him that i pull my own scores daily and just wanted to run the #s by him to see where i stand. I would like the score to go up at least a little more.

My plan is to apply for a credit card today June 8 and apply for the mortgage about say about Dec. 15.

I would like to know from those who knows best if this action is bad or should i hold off until after the loan?

Thank you

Thank you

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Answers

8
Christina Solorzano’s answer
Rico:

Was the 680 pulled by you or the broker? If the broker pulled it you have the score required to get approved. Question is how many trade lines do you have? Since the broker did pull your credit you may have him pre-qualify you for a mortgage based on your income, and assets. You don't have anything to lose to finish the application with the broker, especially since the credit has already been pulled. Scores seen on a consumer website will vary tremendously from those seen on a tri-merged credit report pulled by a broker/banker.

Best of Luck & Have a great day;

Christina Solorzano;
CEO & SR Credit & Mortgage Consultant of
Everlasting Credit Repair
Making home ownership more than a dream...
Retired Mortgage Banker
http://www.everlastingcredit.com
https://www.facebook.com/EverlastingCR?ref=hl
0 votes Thank Flag Link Tue Jun 11, 2013
There are a few things to consider with this strategy.

First, assuming you don't make any purchases on the new card - opening a new card will decrease your total utilization by increasing your total amount of available credit. This, theoretically, should increase your score. Roughly 35% of your score is derived from how much credit you have available, vs. how much you've used. You want this number to be as low as possibly, but definitely under 30%. So, if you have $1000 of available credit, you'll want to never have a balance above $300 or so. If getting this new card will get you under this 30% mark - then it may have a more significant favorable impact on your score.

Conversely, opening a new card does two negative things to your score in the short term. First, it decreases the average age of your total accounts. The longer your accounts have been open - the better, so a brand new credit card could slightly lower your score in the short term. About 15% of your score is derived by the age of your accounts.

Next, it adds another inquiry to your credit report, which also can lower your score in the short term.
This, however, has the lowest effect on your score - at about 10%.

You'll want to meet with a lender who has some experience in credit repair, and can give you some direction since it's a relatively short amount of time between when you'll get the card and when you'll be applying. The credit score formula is very hard to figure out sometimes - my opinion would be that it should raise your score slightly if you are granted enough available credit and don't use it - but without knowing your complete financial picture, there is no way to know with any certainty.

Hope that helps!
1 vote Thank Flag Link Sat Jun 8, 2013
Thank you terry - the information you gave is very helpful. i also can be added to my mother's amex with a credit limit of 5000.00 and a 0.00 balance,
Flag Sat Jun 8, 2013
Usually 2-3 lines of credit and paying any small charges in time could boost your score. It is a complicated system but 680 should be fine & 740+ best.
0 votes Thank Flag Link Mon Jun 10, 2013
Ok so I understand that I will not apply for now.
0 votes Thank Flag Link Sat Jun 8, 2013
The highest balance I carry currently is 750.00 on a 4000.00 CL. I had a recent credit line increase with 2 of my credit cards and none hit my report.. Seem as it was more of an acct review. It just seems that the #s are not rising.
0 votes Thank Flag Link Sat Jun 8, 2013
Your score of 680 is a good score. Opening a new account in June will help you in December, but but how much in unpredictable seeings the 90 days it will show to new rate. There are some tricks to the trade, here are a few:

1.) Never close any older accounts, as ugly as the annual fees are try to keep your longevity going.
2.) Never go over the limits. Try to stay below 30% and and try to keep a very small balance of $20.00 so the credit bureaus are forced to report every month not very quarter.
3.) Try never to be late and for sure no more than 25 days late.

For further tips, please feel free to read some of my blogs concerning credit.

Best of Luck!

http://www.trulia.com/blog/george_raymondo/2011/03/how_can_i…

http://www.trulia.com/blog/george_raymondo/2012/03/no_credit…
0 votes Thank Flag Link Sat Jun 8, 2013
Applying for more credit will lower your score in most cases, to raise your score make payments on time and reduce your balances to below half of what your credit limits are. Do not open or close any accounts,.
0 votes Thank Flag Link Sat Jun 8, 2013
These people are credit score specialists:

http://creditrescuenow.com/
0 votes Thank Flag Link Sat Jun 8, 2013
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