We need a credit card to build credit history so we can receive a home loan in the future. Which card should we apply for?

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Q: We do not want a credit card, but realize we need a credit score to receive a loan for a home in the future. My husband and I both had a credit card with good scores but cancelled them almost a year ago. Now we need to apply for another card. Which should we apply for?

A: Congratulations on planning to get a house. As a homeowner myself, I can tell you it's a lot of fun. A lot of work, but fun, and after 12 years of renting, including dorm life in college, I found it very satisfying to no longer have to listen to a neighbor's stereo through the wall. I'm sure you'll have a great time when it's finally time to move in.

But, you know, you do have a credit score. Just because you both got rid of your credit cards a year ago, it doesn't mean your credit score has vanished into the ether. Since your score was good a year ago, chances are, as long as you haven't had credit-related problems in the meantime, your credit score should still be good, and you could possibly buy a house tomorrow without a new credit card.

There's even an argument that you shouldn't apply for a new credit card now since you'll soon take on a mortgage. Especially if you're going to start looking for a house in, say, a few weeks. A lender might raise their eyebrows that you've just opened a credit card account and are now in the market for a house.

Bottom line: There's no law that says you must have a credit card in order to buy a house.

That said, a credit card can make purchasing a home easier, and a lender will only raise their eyebrows if you have a tremendously large credit limit. If it's going to be a while--say, six months or especially a year--before you look into buying your home, I think it would be a very prudent decision to get a new credit card soon. Provided you don't carry a revolving balance and spend yourself into oblivion during the next year, this is your chance to show a prospective lender that you're still a good credit risk.

That's the whole thing about credit scores and credit histories. Lenders want to see that you're responsible. By not having a credit card for the last year, especially if you and your husband didn't have your credit cards for all that long, they may feel that there's less evidence of that.

But as for what you should apply for, it really depends what your needs are. If you travel a lot, you might want to consider an airline card in which you can collect points. If you commute a lot, a gas card might be in order. If you shop off and online frequently, maybe something with a lot of rewards. Any credit card, as long as you use it properly, should help show that you and your husband will be responsible homeowners.


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