Applying for a Credit Card Right Before Shopping for a Mortgage

[Education44]

Does apping for a new credit card hurt you in a major way when you thinking about applying for a mortgage? I plan to start the mortgage process in about four months. Mycredit scores are: myfico TU 703 and EX 687.

[Lel]

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@Education44 wrote:

Does apping for a new credit card hurt you in a major way when you thinking about applying for a mortgage? I plan to start the mortgage process in about four months. Mycredit scores are: myfico TU 703 and EX 687.

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The general advice is NOT to do this.  It's not necessarily a deal-killer, but the potential for negative effects is substantial.  The inquiry, new account, and decreased average age of accounts can decrease your score.  The underwriter may not like seeing the new account either.

Sometimes loan officers tell their clients with thin credit files to open a handful of new accounts shortly before applying.  This is not advised, either.  If the UW requires more evidence of proper credit management, then alternative tradelines (utility accounts, cell phone contracts, rental histories, etc. - stuff that doesn't appear on credit reports) can be used.

[Education44]

I'll have to calm my itch to apply for a Discover card....

[Familywantsahouse]

We were told 6 months...we really needed another positive tradeline to boost my husband's score, so we opened a new card in Feb knowing we'd want to apply for a loan in june/july ish.

[rena347]

I think it depends on your circumstances. I applied for a Wells Fargo Home Project Card in December 2011. We decided to refinance our mortgage in February 2012. I just had to write a letter of explanation for the underwriter on why the account was opened. (new windows for house - 0% for 3 years)  Neither my husband nor I had applied for any other credit card in the previous two years (only car loans) so don't know if that impacted the underwriter at all. Anyway, the inquiry and new account did not prevent us from getting the loan.