Credit Do’s & Don’ts While Getting a Mortgage

When shopping for a home, good credit is important to obtain the best interest rates and terms.
Here are some tips on what not to do and what you should do.
DO stay current on your existing accounts
Just one 30-day notice for a late payment could cost you.
DO use your credit as you normally would
You’ll raise a red flag if you change your patterns and end up lowering your credit score. Keep things the same.
DO call your mortgage lender
Before you make ANY changes to your credit or address, call your Loan Officer.
DON’T apply for new credit
When you do this, the creditor is going to pull your credit. Every time your credit is pulled, your credit score gets lower. This includes co-signing for a loan too!
DON’T max out your credit cards
Keeping your balances less than 30% below their limit during the loan process will help. If you decide to pay down balances, do it across the board.
DON’T consolidate your debt
If you move all your debt to one or two credit cards, it will appear that you have maxed out those cards and you will be penalized.
DON’T close credit card accounts
Closing a credit card account will make your debt ratio appear higher. Also, it will affect your credit history.
DON’T pay off collections or “charge-offs”
To pay off old accounts, go through escrow. Request a “letter of deletion” from the creditor.
Keep these do’s and don’ts in mind and you’ll be better prepared to close that mortgage.