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Valued Contributor
Posts: 2,669
Registered: ‎04-25-2011
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Credit Card usage after preapproval

Ok; so I had a question


I was preapproved this week for a mortgage. All the due dilligence was performed, bank statements funrnished, credit reports ran.. everything is good to go.


My DTI ratio is really solid, but there is a slight chance I may have to make a fairly decent purchase on a credit card, which would add about 100 in payments and probably drop my credit score a little (util would go from 6 percent to 50) -- I am trying to avoid it right now, but it MAY be inevitable... I really don't know if it would impact things too much but I have leary, and maybe rightfully so...


At what point is it okay to start using credit again?? Lets say I make an offer this week on a home and send it to underwriting. Do I want to wait til the keys are in hand? Do I wait til they run my credit report again? Will the bank base my payments on what is reporting or will the require recent statments? I didn't have to do that for preapproval (the credit card statements)


What are some of your experiences?

Starting FICO Score: 10/10: TU 498 | EQ: 502 Current FICO Score(lender pull): 09/14: TU: 784 | EQ: 752 | EX: 784
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Regular Contributor
Posts: 197
Registered: ‎06-08-2011
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Re: Credit Card usage after approval

The bank will pull your credit again on or about your closing date. Also I believe the pre-approval is only good for 90 days then they will have to pull your credit again for another 90 day pre-approval.


Good luck and happy house hunting.



Starting Score: 684
Current Scores: EQ 796 TU 794 EX 750 (All lender pulls on 2/9/12)
Goal Score: 800 all 3
Valued Contributor
Posts: 1,884
Registered: ‎09-20-2011
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Re: Credit Card usage after approval

To-Be-Continued wrote:

The bank will pull your credit again on or about your closing date. Also I believe the pre-approval is only good for 90 days then they will have to pull your credit again for another 90 day pre-approval.


Good luck and happy house hunting.



They most likely will but don't always.  OP, I would avoid it if at all possible.  But if your scores and DTI are solid enough to absorb and you don't have a choice then you don't have a choice.  Using credit during the process is bad for two reasons.(well, using it and letting it report) One, it will drop your score and increase your DTI.  Second, it makes the UW nervous in that you don't have the funds to deal with unexpected expenses which happen with home ownership.  Good luck and let us know how it goes.  If you use it your playing russian roulete IMHO.

Posts: 77
Registered: ‎06-08-2010
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Re: Credit Card usage after approval

IMHO I would NOT use a credit card during the proccess. My LO pulled for pre-approval (October) and then again the day I submitted my application(Feb). I kept my credit card at a $0 balnce and will do so until I Close. Also; your score will increase or drop depending on your usage and your DTI can increase. If you can pay the balance off before it reports for the month to the Credit Bureau then do so; but if you don't forsee paying the balance within a month I would suggest holding off! Any change/pattern in financing can alert the UW and question your ability to pay a mortgage.

Starting Score: TU 654 EQ 599
Current Score: TU 682 EQ 661 EX 688
Goal Score: 750

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