Credit Do’s & Don’ts During the Home Buying Process
Good credit is critical when it comes to obtaining the best interest rates and terms on a mortgage.
Here are some credit do’s and don’ts when shopping for a mortgage.
Make sure your current on existing accounts. One 30-day notice can cost you.
Do continue to use your credit as normal. Changing your pattern will raise a red flag and lower your credit score.
Do call your mortgage & real estate professional before making any address or credit changes.
Don’t apply for new credit. Every time you have your credit pulled by a potential creditor or lender, you can lose points from your credit score. This includes co-signing for a loan.
Don’t max out credit cards. Try to keep your credit card balances 30% below their limit during the loan process. If you pay down balances, do it across the board.
Don’t close credit card accounts. If you close a credit card account, it may appear that your debt ratio has gone up. Closing a card will affect other factors in the score, including credit history.
Don’t pay off collections or “charge-offs”. If you want to pay off old accounts, do it through escrow. Request a “letter of deletion” from the creditor.
Don’t consolidate your debt. When you consolidate all of your debt onto one or two credit cards, it will appear that you are “maxed out” on that card and you will be penalized.
Looking for additional information regarding your loan process? Please contact:
Senior Mortgage Banker
Delmar Financial Company
1066 Executive Parkway Suite 100
St. Louis, MO 63141
314.434.7000 Office|314.225.3435 Mobile|314.219.1676 Fax