Credit Do’s and Don’ts

Good credit is critical to obtain the best interest rate and terms on a mortgage.

DO

Do stay current on existing accounts 

One 30-day late notice can compromise your ability to be approved.

DON’T

Don’t apply for new credit

Every time you have your credit pulled by a potential creditor or lender, you will lose points from your credit score. This includes co-signing for a loan or applying for new credit.

Don’t max out credit cards

Do not use more than 30% of your available credit limit during the loan process. If you pay down balances, do it across the board.

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 your credit scores will suffer. Don’t close credit card accounts Closing a credit card account negatively impacts your credit history.

Do continue to use your credit as normal

Changing your pattern will raise a red
flag and can lower your credit score.

 

 

 Don’t payoff collections or “charge-offs”

If you want to pay them off, do it through escrow at closing.
Don’t transfer money between accounts Unless receiving complete documentation from your bank itemizing all transfers, don’t transfer money.

Don’t withdraw or deposit
large sums of money

Unless absolutely necessary, don’t withdrawal or deposit large sums into your checking or savings accounts.

 

Don’t make career moves


Don’t change jobs while obtaining mortgage financing. Should an opportunity arise, discuss the details with your mortgage professional.
Don’t let bank accounts go in the red Any accounts with insufficient funds cannot be used. Be sure to keep all accounts in good standing.

Do call your mortgage loan
professional first

If you have any questions or concerns, always contact your mortgage professional.

 

 

Don’t have a friend or relative pay for anything related to the purchase of the home

Gifts are only allowed under specific lending guidelines and must be documented. This includes your appraisal, earnest money, down
payment, etc.

Don’t keep your cash in a
safe or overseas account

If you plan to use these funds as a down payment, inquire about how and when would be the best time to put funds into your U.S. bank account if needed.

Don’t give your personal information
to anyone else who might run your credit report

Be protective of your credit while purchasing or refinancing your home. Additional credit inquiries will hurt your credit scores.