Credit Dos and Don'ts
- Do stay current on existing accounts - one 30 day late notice can compromise your ability to be approved.
- Do continue to use credit as normal - Changing your pattern will raise a red flag and can lower your credit score.
- Do call your mortgage loan professional first - If you have any questions always contact your mortgage professional.
- Don't apply for new credit - every time your credit is 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 you available credit during the loan process. If you pay down balances do it across the board.
- Don't consolidate your debt. When you consolidate all your debt onto one or two credit cards, it will appear that you are "maxed out" on that card, and your credit score will suffer.
- Don't close credit card accounts. Closing a credit card account negatively impacts your credit history.
- Don't pay off 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 withdraw 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 can not be used. Be sure to keep all accounts in good standing.
- 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 are going to use these funds as a down payment, inquire about how and when would be the best time to put these funds in to your US bank account.
- Don' give your personal information to anyone else who might run your credit report. Be protective of your credit while purchasing or refinancing your home.