One of the best and easiest ways of getting your credit score up and making you a more 'mortgageable' borrower over the course of a few months is by opening a new credit card, 2, or maybe even 3.

Very often, people who are looking to purchase their first home do not have sufficient 'credit depth'. Often, a potential borrower may only have one or 2 credit cards open for a few months. While what lenders consider sufficient credit depth varies from lender to lender, here is a general guideline to follow:

Any person looking for a home loan should try to have a minimum of 3 to 5 'tradelines' open for 12-24 months.
A tradeline is any account that shows up on credit (Mortgage, auto loan, credit card etc...).
One of the easiest ways to add tradelines is to open up a new credit card.

While many people don't want to open a new credit card for fear that it may hurt their credit, the truth is that as long as you use the credit card for a few charges every month, and pay the bill on time, over the course of a few months this should actually increase your credit score as well.

The key is that you NEVER want to charge more than 50% of the available revolving credit limit. Ideally, you should try to keep it under 30%.

Lenders want to see that you have credit and know how to use it; Meaning that you have high credit limits on your credit cards, have used them, but keep them low relative to the available credit limit. This shows that you are responsible with credit and lenders will be more comfortable loaning you the money to purchase your home.

Another misnomer is that most people think the best way to help a credit score/report is to pay off the balance in full every month. While this is certainly the cheapest and most sensible option as nobody wants to get caught under a mound of credit card debt, given the way the credit bureaus calculate scores, they want to see you actually using the credit. Even if you only leave a balance of $10-$20 from month to month. Again, it is important to use the credit card at least once a month.

So, if you are planning to purchase a home in the next 24 months and have less than 5 tradelines on your credit, it might be time to consider opening a (few?) new credit card(s).

There are so many great credit card offers out there, many offering bonus miles and points.
You can actually increase your credit score and profile over the course of 12-24 months and earn free flights and hotel stays in the process! What could be bad?

I will profile a few credit cards that you may consider opening in ordert to strengthen your credit report if you already have good- excellent credit.
I will also profile a few credit cards that you can get even if your credit is less than perfect, or even bad credit. These credit cards, if used properly, are a great way to fix up a damaged credit report. They can also help you establish credit if you dont have any.
My personal favorite credit card is the American Express Starwoods Card. This is a Starwoods Hotel (Sheraton, Westin etc..) rewards card. The best part about this card is that these Starpoints (the currency of the Starwood Preferred Guest Program) are so easily convertable into almost any airline frequent flyer program miles. Plus you get an extra 5,000 miles when you convert 20,000 Starpoints to almost any airline's miles. As of this writing they also have a sign-up promotion where you get 10,000 Starpoints after your first purchase. This is enough for up to 3 nights in a Category-1 Starwoods hotel.
You can open this credit card, help your credit over the course of a few months by using the card and paying the bill on time, and get free stays in hotels!
Unfortunately, not all merchants accept American Express credit cards, so it is important for everyone to have a non-AMEX card as well.

Additional info on this card:
     *  Earn up to 25,000 Starpoints (R) - enough for up to 6 free nights at a category 1 or 2 hotel.
     * Use Starpoints(R) for free nights and upgrades at participating Starwood hotels and resorts in 95 countries including Sheraton, W Hotels, Westin and more with no blackout dates
     * No annual fee for the first year and $45 thereafter
     * Transfer Starpoints(R) - almost always on a 1:1 basis - to the frequent flyer programs of over 30 major airlines
     * Earn one Starpoint(R) for every dollar you spend and double
Starpoints(R) at participating Starwood properties and retail partners
     * Express Approval. Get a decision in less than 60 seconds.



Coming Soon:



AMEX Starwoods Business Card Profile
Bank of America Credit Cards
Credit Cards for the 'Less Than Perfect'
and many more...

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