Credit card and applying for home mortgage

Anonymous · ‎09-27-2007

I recently applied for a Limited credit card under my name, got approved and charged a $50 purchased so I could get the 20% discount. My husband and I are applying for a home mortgage in the next few months and he said I should not have opened a new account, since this will hurt our overall credit score. The card has a $1000 limit so I didn't think it would be a problem. Will this ultimately hurt our credit score? We have 2 other credit cards Visa and Discover, and we pay them off in full each month. What do you think?

Anonymous · ‎09-27-2007

stayathomemamma wrote:

I recently applied for a Limited credit card under my name, got approved and charged a $50 purchased so I could get the 20% discount. My husband and I are applying for a home mortgage in the next few months and he said I should not have opened a new account, since this will hurt our overall credit score. The card has a $1000 limit so I didn't think it would be a problem. Will this ultimately hurt our credit score? We have 2 other credit cards Visa and Discover, and we pay them off in full each month. What do you think?

I doubt the new card will significantly reduce your score. how many new accounts have you opened in the past year? How many inquiries for new credit? Mortgage lenders generally look at your ability to pay your open credit cards. A 1k limit isn't going to put a dent in that unless its maxed out. I'm saying all of this assuming a lender has not already advised you to drop cards or limits for a chance at a higher approval.

VLGaffEsq · ‎09-28-2007

The main way this new credit card could hurt your mortgage application is that lenders hate to see you looking for new credit at this time when your about to buy a house. Explain this hiccup to your mortgage lender and you should be ok, but hold off on everthing else until AFTER you go to closing!

Anonymous · ‎09-28-2007

VLGaffEsq wrote:
The main way this new credit card could hurt your mortgage application is that lenders hate to see you looking for new credit at this time when your about to buy a house. Explain this hiccup to your mortgage lender and you should be ok, but hold off on everthing else until AFTER you go to closing!

Agreed. PIF and don't charge anything more to it.