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Approved for A Home Loan? What Not To Do With Your Credit - Part 2

Mortgage and Lending with Amerifirst Financial Inc

Part 2:
You have been pre-qualified and just signed the Purchase Agreement, Seller has accepted your offer and we are off to the races with our 30 day escrow.  Did your loan officer tell you there were a few do and dont's for your credit during this critical period?  So many of these sound obvious, but....

6.  Don't lose contact with your mortgage and real estate professionals.  Don't do anything without discussing with both professionals in the transaction, until you have your keys.  

7.  Don't allow your accounts to run past-due - Not even one day!  Most cards offer a grace period, however, what they don't tell you is that once the due date passes, that account will show a past due amount on your credit report.  Past due balances can also drop scores by 50 points or more!

8.  Don't pay late.  Stay current on existing accounts.  Under the new FICO score model, one 30-day late can cost you anywhere from 50-100 points, and points lost for late pays take several months if not years to recover.

9.  Don't consolidate your debt onto 1 or 2 credit cards.  It seems like it would be the smart thing to do, however, when you consolidate all your debt onto one card, it appears that you are maxed out on that card, and the system will penalize you.  If you want to save money on credit card interest rates, wait until after closing.

10.  Don't do anything that will cause a red flag to be raised by the scoring system.  This would include adding new accounts, co-signing on a loan, changing your name or address with the credit reporting agencies.  The less activity on your reports during the loan process, the better.

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Steven Cook
No Longer Processing Mortgages. - Tacoma, WA

Lauren,   Great lists - and good advise for everyone to be aware of.  If realtors will reinforce what lenders are telling clients, maybe we can all close more deals.

Jul 13, 2011 10:56 AM