Protect Your Credit Score Before Applying for a Mortgage
Your credit profile can play an important role in mortgage qualification and available loan terms. Payment history, outstanding debt, credit utilization, the age of your accounts and recent applications for credit are among the factors that may affect a credit score.
If you're preparing to buy or refinance a home, it's a good idea to understand your credit before applying—and to avoid making significant credit changes while your mortgage is in process. If you're unsure how a financial decision could affect your financing, talk with your loan professional first.
5 Ways to Protect Your Credit When Preparing for a Mortgage
Your credit can change while you're preparing to buy a home and even while your mortgage is being processed. These five habits can help you protect your credit profile and avoid unnecessary surprises.
Smart Credit Habits
Pay Your Bills on Time
Continue making payments on credit cards, auto loans, student loans and other accounts by their due dates. Payment history is an important factor in credit scoring.
Be Careful With New Credit
Avoid applying for new credit cards, auto loans or other financing without first discussing it with your loan professional, especially while your mortgage is in process.
Keep Credit Card Balances Under Control
Avoid significantly increasing your credit card balances while preparing for a mortgage. Higher balances relative to available credit may affect your credit score.
Don't Close Credit Accounts Without Checking First
Closing a credit card can change your available credit and credit utilization, which may affect your credit score. Before closing or making significant changes to an established credit account, talk with your loan professional.
Review Your Credit Reports for Errors
Review your credit reports before applying for a mortgage so you have time to identify information that may be inaccurate. If you find an error, follow the appropriate process to dispute it with the credit reporting company.
Have Questions About Your Credit Before Applying?
You don't need perfect credit to start a mortgage conversation. Stuart can help you review your financing goals, discuss available loan options and explain the next steps for preparing to apply.