Credit Do’s and Don’ts
Good credit is critical to obtain the best interest rate and terms on a mortgage.
Do stay current on existing accountsOne 30-day late notice can compromise your ability to be approved.
Don’t apply for new creditEvery 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 cardsDo 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 debtWhen 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
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
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.