Do You Need More Than One Trade Line?
March 23, 2009, Reviewed February 4, 2009, April 7, 2011

"My husband and I went to a mortgage broker and he pulled our credit which is really good, but told us we both need to have 3 trade lines in order to be approved for a mortgage? So he told me I have to go out and charge something on a credit card I haven’t used in a long time to get another trade line on my credit; is this true?"

Yes, a broker has no reason to complicate a transaction, and perhaps lose it. The lender has imposed this requirement which the broker is obliged to implement.

During the go-go years, lenders mainly relied on credit scores, which require only that the borrower’s trade lines are sufficient to produce a score. In today’s market, however, increasing numbers of lenders have gone back to the traditional credit history approach, in which the lender assesses all the data in the borrower’s credit history in order to make a judgment about creditworthiness. Based on rules established by Fannie Mae and Freddie Mac, which buy most of the mortgages originated today that are not FHA-insured, the borrower must have at least three trade lines, each of which has been used within the last year.

I am not sure that this rule makes a lot of sense. I doubt that a borrower is more creditworthy because she divides her credit transactions across three cards rather than one. But that is the way it is.

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