Credit Don’ts When Purchasing A Home

Credit DON’TS to Avoid Challenges at Loan Closing

Don't do anything that will cause changes to your credit report. All activity needs to stop after you have been  pre-approved. Even minor changes can impact your credit score and debt ratio.

Don't apply for any new credit. Your credit score initially drops when you acquire new credit until you prove yourself on each account. In addition to the credit score decrease, this may impact your debt to income ratio.

Don't pay any collection or charge off accounts. Paying a collection or charge off  account may result in a drop in your credit score. The only exception to this rule is if you have obtained a letter of deletion directly from the creditor.

Don't over charge on any credit cards. This results in a lower credit score and increases your monthly debt so it will negatively impact your credit score and your debt to income ratio.

-Don't consolidate any credit card debt onto one or two credit cards. This results in maxing out one or two credit cards and it will decrease your credit score even if it will increase your monthly cash flow.

-Don't close any credit cards. This results in decreasing your credit history and ultimately increases your credit utilization ratio.

-Don't pay any credit cards after the due date. This can result in a past due balance and can decrease your credit score by 40 to 50 points. Many credit cards do not give grace periods and will report you as past due one day after the due date on the statement.

-Don't pay any credit cards over 30 days late. Even one 30-day late payment can decrease your credit score by up to 100 points.

-Don't dispute any accounts on your credit report. If any accounts are in dispute status the dispute will have to be removed prior to underwriting approval.

-DO stay in communication with me. When in doubt, please call before you act. It is extremely difficult to un-do actions that negatively impact your credit profile. Great communication is the key. 

We Can Work Together For A Successful Loan Closing.