I recently had a client who was oh so close to qualifying for a Rural Development Loan. She just needed one more month of paying her bills on time to get her over that magic 640 number. Both brokers, the seller held the contract up a month just to let this happen. When the month passed and we pulled her credit again it had gone down 26 points. The reason was really simple; she applied for two credit cards and direct TV for the new home. Of course the deal never closed.
Conversely last Monday a client came to see me, with her own tri merge credit report with a mid score of 776. She was a fantastic borrower and well qualified in every aspect. When I ran her credit the mid score was 710, the score went down 66 points in two weeks. The borrower had made all of her payments on time and had not taken on any debt. However she had closed out two old credit cards which drastically reduced the length of time she had credit. 15% percent of the calculation in credit scoring is length of time of credit. This increased her interest rate under risk based pricing ¼%.
I tell every borrower I meet do not touch or do anything with their credit until after closing. Anything they do (with their debt) can only hurt, when they act on their own. It is a real good idea to constantly re enforce this with your clients. It will save them money and possibly your commission check.