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Will this affect my eligibility?

Contributor

Will this affect my eligibility?

Hi,

 

I'm just curious,

 

I'm in the process of buying a house (new build).  My Loan Officer said of course minimize use of credit cards,

don't open any new accounts, and don't close any accounts, among other things.

 

I just noticed that my Ashley Home Store CC was closed a few days ago due to inactivity.  

I asked them if they could leave it open and I will use it once I close on the house. 

They said I'd just have to reapply.

 

Does anyone know if this could hurt my loan approval?

Should I mention this to my LO?

 

Just curious because I've read on this forum how little changes to your credit profile

can make a big difference for a mortgage loan.

My FICO - As of 12/2016
Equifax 740
Transunion 749
Experian 743
7 REPLIES
Valued Contributor

Re: Will this affect my eligibility?

You should be fine. I'm guessing you already had more than three tradelines?

Mortgage Loan Officer in Northern California - lending in The Golden State from the Oregon border down to San Diego!


Valued Contributor

Re: Will this affect my eligibility?

the only thing i can see this impacting is your revolving ratios since total credit has decreased....which could possibly impact your credit score.  Since the account is reporting as closed, have you checked your mortgage scores to see what the impact is?  If your scores are where you want them to be, you should be ok.  Just give the lender the letter from the creditor stating that the account was closed due to inactivity.

 

I believe the only reason lenders say don't close accounts is becuase of the possible negative impact to your credit scores.  

AmEx Green NPSL | Amex BCP 16K | Citi Simplicity 10k | Discover IT 9K | Chase Slate 7.5K | Amex Hilton HHonors Surpass 7K | Capital One QuickSilver 6K | Home Depot 5k | Chase Freedom 4.5K | LOC 2.5K
Valued Contributor

Re: Will this affect my eligibility?


frugalQ wrote:

the only thing i can see this impacting is your revolving ratios since total credit has decreased....which could possibly impact your credit score.  Since the account is reporting as closed, have you checked your mortgage scores to see what the impact is?  If your scores are where you want them to be, you should be ok.  Just give the lender the letter from the creditor stating that the account was closed due to inactivity.

 

I believe the only reason lenders say don't close accounts is becuase of the possible negative impact to your credit scores.  


For minimum number of tradelines requirement (for overlay) or total utilization affecting credit score.

Mortgage Loan Officer in Northern California - lending in The Golden State from the Oregon border down to San Diego!


Contributor

Re: Will this affect my eligibility?

Yes, I have several... and honestly I haven't used my Ashley CC in ages..

My FICO - As of 12/2016
Equifax 740
Transunion 749
Experian 743
Frequent Contributor

Re: Will this affect my eligibility?


live-n-learn wrote:

Hi,

 

I'm just curious,

 

I'm in the process of buying a house (new build).  My Loan Officer said of course minimize use of credit cards,

don't open any new accounts, and don't close any accounts, among other things.

 

I just noticed that my Ashley Home Store CC was closed a few days ago due to inactivity.  

I asked them if they could leave it open and I will use it once I close on the house. 

They said I'd just have to reapply.

 

Does anyone know if this could hurt my loan approval?

Should I mention this to my LO?

 

Just curious because I've read on this forum how little changes to your credit profile

can make a big difference for a mortgage loan.


It doesn't matter if the card is closed.  It will still report for at least 10 years.   If you have any any balances on other credit cards reporting that closed account will affect your utilization which will affect your scores.   What may hurt your loan approval is applying for new credit ,so do not apply for another card.  Don't contact customer service during the mortgage process regarding anything about your closed or open accounts unless you suspect fraud.  Also, do not contact any of the credit bureaus.  You do not want anyone making changes on your credit reports for any reason.  Just let the sytem automatically update your balances and payments each month with the credit bureaus.     

Contributor

Re: Will this affect my eligibility?

Good Advice... Thanks

My FICO - As of 12/2016
Equifax 740
Transunion 749
Experian 743
Frequent Contributor

Re: Will this affect my eligibility?

As long as your scores remain good, lender won't care about the Ashley card. It's also unlikely that even some inquiries or new accounts would hurt your pricing or approval chance, as long as you explain and document everything as asked. If your scores remain above 740, you're usually fine.
812 FICO (TransUnion) | 809 FICO (Experian)
Chase Sapphire Reserve - $60,000 | Barclays AAdvantage Aviator Red - $36,500 | Amex Blue Cash Everyday - $30,000 | Fidelity Visa Signature - $20,000 | Chase Freedom - $20,000 | Bank of America Cash Rewards $22,000 | Wells Fargo Plat Visa (runt of the litter!) - $4,400
TOTAL: $192,900