Question : Should I up my credit limit on my credit cards before or after I buy my home?
My limits on my credit cards are low and I would like to up there limit but im about to buy a home. Im afraid after the mortgage shows up on my credit my credit card, They will not up my limit due to the new mortgage. So raise the limit now or after?
- asked by Jeremy D
All Answers:
Answer #1
You should get rid of your credit cards.
- answered by Ohio
Answer #2
after....
- answered by cullzcuzzie
Answer #3
Cut them up and cancel them BEFORE you apply forthe mortgage.
- answered by Aumharan G
Answer #4
The best thing to do is to wait to up your limit.When the mortgage company looks at your credit forapproval they are going to look at the limit ofyour credit cards, not what you currently have onthem. Even if the balance is $0.00 they are goingto take into consideration that you have a$5000.00 credit limit that you could fill up theday after they approve you for the mortgage.
- answered by Big Willie
Answer #5
The mortgage will take 30 to 60 days to show up onyour credit report. Wait until after you close onyour home, then request an increase.Check outbankrate.com to make sure you are getting the bestdeal on your credit cards. This site has helpedme out a lot by letting me view the dealsdifferent banks offer for credit cards, mortgages,CDs, Equity loans... etc.Remember, in order tokeep a high credit score, never borrow more than40% of the available balance on any card!
- answered by MR MONEY
Answer #6
If you have already been pre-approved for a home,then what you do now will not matter. If you havenot yet been pre-approved then it is a littletricky. If you have not been pre approved AND youcarry balances on your credit cards then it may bein your best interest to open new credit cards. The reason for this is because one of the keythings to determining your credit score is yourrevolving availability. So if for example youhave a $2,000 credit card balance and a $2,500limit (on your only credit card), then yourrevolving availablity is ($2,500 - $2,000) /$2,500 or 20%. 20% is not so good. I would saythat if your number in the above calculation isbelow 70% then it would be in your best interestto open another credit card. But note, that youwill want to substitute in the total limits of ALLof your credit cards for the $2,500 and ALL ofyour balances for the $2,000. If you are unsureof what credit cards you have outstanding go toannualcreditreport.com and pull your credit reportfor free (once per year with each of the threeagencies).If you have not been pre-approved ANDyou do not carry a balance or carry limitedbalances, then I would not open any new accounts. To a lesser extent than revolving availability,activity on your account (opening and closingaccounts) adversely affects your credit score. And to ease your mind, I would not worry aboutyour mortgage hurting your ability to raise yourcredit limits once you own a home.
- answered by Chris M
Answer #7
I see what you mean. You'll have to be careful notto overextend yourself, of course. A mortgagebecomes a very large monkey on your back for 25years or longer.If you're confident that you canhandle the payments (mortgage, monthlyexpenses, PLUS any new credit payments), thenraise your limits before the mortgage is ineffect. Higher limits could earn you slightlybetter interest rates on your mortgage.Also, theadditional credit line may be very, very handy tohave when you're moving into your new home. Thereare ALWAYS unexpected expenses involved inmoving. It may be something fairly small, like paying for additional moving materials, orhaving to rent a truck (or pay a moving company) for an additional day. Or, it could be more major things, like having to replace anappliance or install a new kitchen floor.
- answered by What the Deuce?!
Answer #8
i totally recommend not increasing your limit-payit down!!Did you realize that by only using 75% ofyour limit your credit rating goes up? However,lending institutions look at your debt ratio, sodon't go increasing your limits and charging more.
- answered by aqua_dunce123
Answer #9
IMO, if you're going to ask for a limit raise thenwait until after closing.A friend of mine got theloan approval and then went out and incresed limitbefore closing only to have her loan cancelledalong the way becuase her ratio went up. Theyalso look at how much you could use and not justhow much you are using when deciding to give you aloan.
- answered by sporregar
Answer #10
Small steps like paying your bills on time andusing only part of the credit available to you.Also use your credit cards for making smallpayments regularly, so that it is reflected inyour credit record. More tips available at
http://www.acreditlibrary.com/buildcredit.html
- answered by harish
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