My hubby and I are considering moving and since we last refinanced our mortgage, we've both opened up several credit card accounts. Combined income is aprox. $70,000, but we have credit lines that surpass our income. Most of the cards have zero balances. I'm just tryin' to get my ducks in order here, so does anyone have any experience with this issue?? My concern is the bank will say we have too much credit available and/or too many cards and turn us down for that reason. If we need to close a few accounts, it's not a problem, but I just want to have ample time to do it so our scores don't take a hit. This mortgage, I'm determined to get the best available rates... last time we took what we could get and it wasn't a good rate. Thanks, Ozzy.
I think you should be fine because you don't have a balance on most of the cards. You have great scores. Most 'A' paper loans are done on a 680 or higher average between all three CRAs. There would be a problem if you had high balances on the cards which could bring on debt ratio problems. You should be careful about closing them because that could make your score go down due to 'to few accounts with long historyâ??. I have seen this happen. People with credit scores in the 700s close a bunch of accounts right before they get a mortgage thinking the score will go up but it doesn't. The score went below 680 pushing them out of being able to qualify for the best rates. I use to do refinances and have seen this happen. With your scores you should have nothing to worry about. If you do anything just pay off anything you owe, but do not close the accounts.
WE BACKED OUT OF OUR RE-FI...they got a "YELLOW LIGHT" REASON~~"EXCESSIVE AVAILABLE CREDIT LIMITS ON CREDIT CARDS" We had $100,000+ EQUITY And >$100,000 H/H INCOME We have >$200,000 available...SO WHAT!?!?!?!?!?!? 739 me was 741 her was
Well in your case George I can see them saying that because you have WAY more credit available to you then the average person. Personaly I would say "so what" too but that is how the industry works. They figure if you spent all that was available to you then they might not get there money back. Having lots of available credit can be a two edged sword. Ozzy didn't say how much they have available to them. If it is something like George then you may need to close some accounts, but if it is a little bit higher then the average but not way high then I would still keep most open (close 1 or 2 with a close eye on your score) and pay off what ever you owe. There are many things that they take into account such as savings. If you have a good amount then they may feel you could handle the credit and the mortgage if something happens to your jobs. Don't be afaid to ask your loan officer about your situation because each one is different.
Thanks Smit and George for taking the time to reply. Smit, our household income (husband works, I'm on SSD) is about $70,000.... and we've got about $80,000+ in credit limits. I don't think we need to worry much about closing accounts affecting our length of time accounts have been open - we've got 14+ years of credit history. The accounts I was thinking of closing were ones we never use becuase of the terms (Target Visa, CapOne). Target's been open a year for both of us (we each used the card 1x) and CapOne has been open for 2+ years for each of us. Most of the credit limits are in my name alone (go figure, I have no job!)... was thinking of transferring his debt to my cards and applying for a mortgage just in his name, if the available credit is a problem. He's got 4 cards, but only has balances on 1, and one we pay off each month anyway. His available credit soley in his name is $32,000. So with his income at $60,000+, does $32,000 in available credit seem like too much?? I'm not tryin' to get into trouble with too much credit and hiding it from a mortgage company - I just worked really hard to get that credit and hate to see it bite us in the butt! Ozzy.
With those scores and your credit history, you should be fine. I closed on a mortgage in October with a very similar financial profile and they didn't even bat an eye. Just be careful not to run up the balances higher than usual prior to closing, and you should be fine. Good luck!
Thanks so much for replying. Your response makes me feel better. We're working on paying down those balances, but it's so hard not to take advantage of those 0% offers! LOL... the offers are addictive! Thanks! Ozzy.
I just worked really hard to get that credit and hate to see it bite us in the butt! Ozzy. Ozzyburger ==================== Bite yer a- - is what FICO does best. LB 59
You should be careful about closing them because that could make your score go down due to 'to few accounts with long historyâ??. I have seen this happen. People with credit scores in the 700s close a bunch of accounts right before they get a mortgage thinking the score will go up but it doesn't. The score went below 680 pushing them out of being able to qualify for the best rates. Smit ===================== What does any of this have to so with his credit worth? Why should consumers be tossed around like this chasing an imaginary 3 digit number that has no bases in fact?? ========= LB 59
IBrown59 I total agree with you. I hate that those 3 numbers control our lives the way they do. My hubby and I were in a business that failed and our credit suffered badly. It wasn't because we were lazy bums that just didn't want to pay our bills. We had never worked so hard in our lives. The SCORE has no basis in reality but like it or not we have to deal with it. I was just trying to give a fellow creditnetter some advice on how to play the game we all have to play from time to time.
1*The SCORE has no basis in reality but like it or not we have to deal with it. 2*I was just trying to give a fellow creditnetter some advice on how to play the game we all have to play from time to time. SMIT ====================== 1*Something needs to be done to eliminate it. 2*When it comes right down to it there is no excuse for consumers having to deal with it.
SMIT : == 1*Write your state and Fed reps. 2*Write your State A/G 3*File complaints with regulators 4*Complain to Insurance Commissioners 5*Media exposure 6*Vote for consumer friendly candidates 7*Withhold your business from the CRAs clients. LB 59
STOP! Don't close anything. If you feel you must do something call the credit card companies and ask them to REDUCE your credit lines. My story. Mortgage broker told me the same thing...seems to be a standard line they give everybody. We didn't close anything at the time, broker put thru our application, and we were given the lowest interest rate one could dream of at the time so obviously it DID NOT affect our loan. BUT, stupid me...., got to thinking about all those cards I had and after having my purse stolen once got to thinking perhaps for safety sake I'd close all but one or two cards. I did that and lo and behold my FICO tanked big time and since it did my interest rates on the two I kept open went up! Also, since the mortgage company put umpteen inquiries on my profile over the 9month process of buying our home I could not get any new credit at lower rates. At this time I was ALSO fighting to get stuff from a person with a similar name off my report (that's a whole other story, though). Bottom line, I think that they must have a mantra to tell people buying homes that they have "too much available credit" to get them to close accounts thereby reducing their FICO's and resulting in them being able to use that reduced FICO as ammunition AGAINST you so they can get you to sign for a HIGHER mortgage! I think it is a major scam...and it WORKS.
You can blame the credit card companies for the little thing they call the fico score. doctorlite' ======================== It's not a little thing it's the biggest consumer rip off in history!
I can see what you are saying but concerning #7, how do you get insurance on your car, get a credit card or buy a house? I still think if everyone in the US did what you are suggesting that they still would not get rid of the 3 numbers completely. I would guess they would just get more lawyers. They have what we want so in the meantime we have to play the game as well as do some of the things you are talking about.
