New Credit when applying for Mortgage in 6 months

[praise123]

Sold my house and will apply for new mortgage in 6 months. Discover sent me a pre-approval so I would
Iike to get the card to transfer high balances from other cards in hopes of pulling up my score. What should I do? Also does paying off a mortgage increase or decrease your score.

[enharu]

Paying off your mortgage or any loan can increase or decrease your score. It just varies upon the individual'a credit profile. There's really no good explanation other than the "bucketing" theory. On the bright side, I personally think it would look good on a manual review, especially for future mortgages though, since the underwriter is able to see that you were able to finish your last loan without any issues.

I would recommend that you first try to talk to a loan officer about opening new lines of credit before you do anything else. Generally applying for credit a few months before a mortgage is not viewed upon favorably, especially if you have high utilization, or any kind of derogs on file.

[OptimalCS]

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@praise123 wrote:
Sold my house and will apply for new mortgage in 6 months. Discover sent me a pre-approval so I would
Iike to get the card to transfer high balances from other cards in hopes of pulling up my score. What should I do? Also does paying off a mortgage increase or decrease your score.

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I would highly recommend that you NOT open any new accounts prior to applying & closing on a loan.

1. New accounts/inquiries will negatively affect your score for at least a year.

2. Lenders do not like to see new debt being added/ moved around.

3. This could potentially increase your debt to income ratio.

Is there a reason why you don't want to use any equity gained from your recent sale to down off all your balance in full vs. transferring them? Balance transfers usually come at a cost usually 3% of whatever you're bringing in. This will result in your debt increasing.

Also if you're unable to payoff your debt in full this could be a red flag that you've overextended yourself. Maybe you need to revisit your household budget.

The only way this action could potential improve your score is if your credit and income are stellar (760 + score and over $150k income). Then you could potential get approved for a credit line 90% greater than your debt. In this case your scores would increase because your utilization would decrease significantly to around 10%.

I'm making a lot of assumptions here but based on the info you provided you are unlikely to get approved for a credit limit that will be greater than 90% of your debt  because you may have maxed out your cards (I'm also assuming that there aren't any other baddies on your credit report).

So if you apply for Discover they will either deny you or approve you for a small limit. Most cc are sensitive to high utilization. It also would not make sense to apply for a new account prior to a mortgage.