What affects the credit card score?

Asked by Ramesh, Los Angeles, CA Mon Apr 6, 2009

(a) I have one card with good credit history. I have been told one should have 2-3 credit lines. If I apply for another card now how long should I wait to apply for a mortgage loan.
(b) My spouse has no credit card, so no credit history, never had it. She would be a co-borrower. I have been advised that we can go ahead to apply for a loan together, without her having a credit card. We need to account for both of our salaries though.
(c) My spouse should get a credit card from my credit card co. as an 'authorised user' through me, so that my credit card history gets shifted to hers.
(d) My spouse should apply for an independent credit card through me from my credit card co. so that my credit card history gets added to hers..
(e) My spouse should get an american express/costco card on her own.
(f) my spouse should apply for a credit card from her own bank or take a secured credit card.
What is our best option so that we are able to obtain a loan at least rates,

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Other/Just L…, , Fleming Fitch Grant, Holly Hill, FL
Wed Apr 8, 2009
Lending answer:

(a) I have one card with good credit history. I have been told one should have 2-3 credit lines. If I apply for another card now how long should I wait to apply for a mortgage loan.

A new trade line will not be rated until after 6 months of account activity have passed. A new account, however, will reduce your credit score slightly. The "2-3 credit lines" is a rule of thumb. Some lenders may require; others will not. Fannie Mae, Freddie Mac, and FHA do not have minimum tradeline requirements.

(b) My spouse has no credit card, so no credit history, never had it. She would be a co-borrower. I have been advised that we can go ahead to apply for a loan together, without her having a credit card. We need to account for both of our salaries though.

FHA insured mortgages do not require a credit history reported to the a credit bureau. Many lenders, however, won't write FHA insured loans based on non-traditional credit (eg rent, utility payments, etc)

(c) My spouse should get a credit card from my credit card co. as an 'authorised user' through me, so that my credit card history gets shifted to hers.

Authorized User tradelines no longer count in developing a credit score, thanks to companies which aided fraud by "renting" tradelines from people with good credit to people with poor credit.

(d) My spouse should apply for an independent credit card through me from my credit card co. so that my credit card history gets added to hers..

To count towards your wife's credit score, the account must be either "joint" (both of you apply) or individual (she applied on her own). Bear in mind, though, that any new tradeline won't count towards score until 6 months of activity have passed.

(e) My spouse should get an american express/costco card on her own.

It won't matter if the account is with AMEX, Cost Co, or a bank. All are considered revolving accounts in developing a credit score.

(f) my spouse should apply for a credit card from her own bank or take a secured credit card.
What is our best option so that we are able to obtain a loan at least rates,

There is essentially no difference between a bank issued credit card or a secured credit card. Many banks offer secured cards. BE SURE, though, that any secured card for which you apply reports account activity to all three credit bureaus. Many do not. And many will charge you numerous junk fees at application.

My advice to you is to avoid doing anything with credit until after speaking with an FHA lender.
1 vote
, ,
Wed Apr 8, 2009
Character:

refers to how a person has handled past debt obligations: From the credit history and personal background, honesty and reliability of the borrower to pay credit debts is determined.

Capacity:

refers to how much debt a borrower can comfortably handle. Income streams are analyzed and any legal obligations looked into, which could interfere in repayment.

Capital:

refers to current available assets of the borrower, such as real estate , savings or investment that could be used to repay debt if income should be unavailable. CAMEL is a tool sometimes used for assessing credit-worthiness of a borrower. CAMEL refers to:
C: Capital
A: Assets
M: Management
E: Equity
L: Liquidity

Let me know if I can help boost your scores free of charge

Ryan Brandenburger
954-394-9005
0 votes
Steve, , Rohnert Park, CA
Wed Apr 8, 2009
Check your scores first. You may be surprised. As others have mentioned, some lenders are looking for your FICO score, your monthly debt payments, your W2's and paycheck stubs and your liquid assets. Proving your credit history may not be necessary -- they may well just want to see a number.

I can vouch for creditkarma.com to get a score namely because it's free, as in FREE. No entering a credit card that "won't be charged for 30 days" or anything. Just sign up and check your score. They'll pull your credit and give you a score (but no details about your report) and finance the service by pitching credit related offers on their site. It's a fair deal overall to give you a ballpark idea of your FICO (it's doubtful it will be exact -- at best it'll be one of three FICO scores you have)

If you feel you need to bump up your scores, ask on a dedicated credit related forum. I like the forums on creditboards.com, there's a good community on creditnet.com as well.

I wouldn't do anything to try and alter your score in the short term unless you found a need to (i.e. found you couldn't get pre-approved). The FICO formula is an industry secret, but safe to say it guards against people trying to suddenly boost their scores. A sudden surge in activity on your credit reporting, relative to prior volume/credit lines, is likely to have the inverse effect you're seeking.
0 votes
Crestico Rea…, , Los Angeles County, CA
Mon Apr 6, 2009
Dear Ramesh,

Regarding financing, I have found that many buyers look to their Realtors for lending and financing advice. I believe that this causes many miscommunications and misunderstandings. While Realtors certainly have lots of experience in these matters, they are not technically trained to handle and answer your questions. For this reason, I have worked very hard to establish a solid working relationship with a Direct FHA Lender and as a result, have a dedicated representative at the Lender. My dedicated rep treats my clients with the utmost care and concern and makes himself available for them around the clock. I also have a very close working relationship with a home decorator who is a licensed contractor and offers estimates and consultations.

Please feel free to contact my rep at the Lender, whose information I have provided below. Make sure you let him know that you are a Crestico Realty referral so that I can personally guarantee the level of customer service you receive.

Houtan Hormozian
American Guardian Home Loans
(949)242-5215
hhormozian@amguardian.com
Web Reference:  http://www.crestico.com
0 votes
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