Homebuyer Help- Ten Tips to Assure Your Home Loan Approval

Barb Collier of Metrocities Mortgage graciously allowed me to share these important credit tips for all buyers who want to have their loan close:

1. Do NOT apply for new credit– your credit score can lose points each time a creditor or lender pulls your credit report.

2. Do NOT pay off collections or ‘charge offs’– you can pay off old accounts at closing.  Doing so sooner could drop your credit score…

3. Do NOT close credit accounts– it’s possible that your debt ratio will look like it has gone up.  This can also affect other factors in your credit score.

4. Do NOT max out or over charge your credit cards– Try to keep your credit balances below 30% of your credit limit during the loan process.

5. Do NOT consolidate your debt– you can be penalized for this.

6. Do NOT do things that can raise a ‘red flag’ by the credit scoring system– this would include adding new accounts, co-signing on a loan, changing your name or address with the credit bureaus, buying new major purchases (furniture, cars, etc.).

7. DO join a credit watch program– you can monitor your own credit report (you will not get dinged for a ‘hard’ inquiry).

8. DO stay current on existing accounts– one 30–day late notice can cost you.

9. DO continue to use your credit as normal– if it appears that you are changing your pattern, it could raise a red flag.

10. DO call your loan officer– ask your loan officer before doing anything that impacts your finances… a little caution could save your loan.

For more tips and good information on how credit scores are created, go to Credit Score Basics in Real Estate.