How To Screw Up Your Danville Home Loan Transaction Guaranteed!

Comments(0) By Mike Miller •April 29th, 2008

Today’s post deals with your credit score and some of the things that you should never do after you apply for a mortgage loan. These days it is imperative that you have a credit score of at least 720, because just as “brown is the new black”, a “720 score is the new 680 score”. Most lenders are now raising the rates for borrowers whose credit score is below 720. Therefore, it is important to get your score above 720 AND KEEP IT THERE DURING A MORTGAGE LOAN TRANSACTION!

Now here is the challenge, many people, after initially applying for a mortgage loan to buy a new house, will also go out and immediately start acquiring furniture and appliances for the pad. And guess what? They are not paying cash, in fact, they may even do the dreaded “90 days same as cash” deal, often applying for a new Sears credit account in the process. Why is this bad? Because many times, a lender will RE-RUN a credit report near the end of the transaction to verify that no new debt has been incurred. Not only does this mean that your loan is subject to recalculated debt to income levels, but you may not qualify anymore because the $10,000 Sub-Zero refrigerator you just ordered dropped your score 30 points!

Little known factoid: The “90 days same as cash” type of account is the WORST type of account to obtain from a credit score standpoint! It does more damage than just putting it on an existing credit account, BY FAR!

For more info about credit scoring basics, and how to keep your score above 720, please subscribe to the DanvilleMortgageBlog.com for my future posts.

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Filed Under: Borrower Tips