Credit Supplement Report? Will This Cost Me My House?

[Anonymous]

Ok....so here's the story....

Put down offer and went through preapproval and everything....

So I did the dumb thing and got 3 new cards.....haven't used them at all BUT they are on the books nonetheless.... AND our DTI is at 19%

So the LO ordered a credit supplement report....as not only that, but when they pulled credit back in July, they used the wrong SSN....go figure...

Meanwhile, come to find out, another card I have which I still have yet to use but was signed for back in May did not report until yesterday.....SO, they have to order ANOTHER credit supplement report....

I am beginning to think that my LO thinks I have been lying to her...for what reason I don't know....

Anyways, will sending off for yet another credit supplement report cost us our house?   We were supposed to close tomorrow....and that had been pushed back from the previous Friday as the LO and USDA couldn't get all their paperwork together in time anyways.....

It may push our loan out a day or two, but will this cost me my house?

[Anonymous]

Oh...and just to add....

While I have added 3 new credit profiles on my accounts, they told me that my credit has went up in the last month.....up as in by 20 pts according to their scales....

[Booner72]

So you got 3 new credit cards between first approval and final closing?  yes, that's bad.  It will require a LOE at least.  I'm don't think anyone can tell you if it is a dealbreaker or not.  Didn't they warn you not to open any new credit ?  It might be different since you haven't used them.  You will have to see what they say.

Good Luck!

[Anonymous]

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@Booner72 wrote:

So you got 3 new credit cards between first approval and final closing?  yes, that's bad.  It will require a LOE at least.  I'm don't think anyone can tell you if it is a dealbreaker or not.  Didn't they warn you not to open any new credit ?  It might be different since you haven't used them.  You will have to see what they say.

Good Luck!

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First, what is a LOE?

Also, no, I was never told not to do this by my LO....she just basically told us not to do anything that would lessen our credit profiles.....and obviously my score went up, so that doesnt lessen it....

And no, I have not put a single dollar on any of them.....I would have waited til after closing, but odds of the mortgage loan making my credit score go down would have been likely....that said, I'd take this all being over and me being in the house over getting it furnished any day over what I am dealing with now....

[Booner72]

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@Anonymous wrote:

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@Booner72 wrote:

So you got 3 new credit cards between first approval and final closing?  yes, that's bad.  It will require a LOE at least.  I'm don't think anyone can tell you if it is a dealbreaker or not.  Didn't they warn you not to open any new credit ?  It might be different since you haven't used them.  You will have to see what they say.

Good Luck!

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First, what is a LOE?  Letter of Explanation.  The underwriter could want an explanation about why you opened new credit.

Also, no, I was never told not to do this by my LO....she just basically told us not to do anything that would lessen our credit profiles.....and obviously my score went up, so that doesnt lessen it....Hum.  That's weird.  I know on my loan application it says something along the lines of "We strongly urge you to not open any new lines of credit until closing such as furniture cards or credit cards, car loans etc.."

And no, I have not put a single dollar on any of them.....I would have waited til after closing, but odds of the mortgage loan making my credit score go down would have been likely....that said, I'd take this all being over and me being in the house over getting it furnished any day over what I am dealing with now....So you got the cards because you thought your score would go down after the mortgage hit?

Anyway:  I just can't say - Sounds like you don't have a great relationship w/ your Loan officer bc they think you  lie to them (??) anyway, You can call the LO and ask what they think or you can just grin and bear it.  I don't know what will happen.  I sincerely wish you the best of luck!!  I'm no mortgage expert by any means, just read a lot around here and just went through the whole thing myself.  So my opinion is only one of a million and maybe someone else will think it is no big deal.  I just don't know.  Only basing of my personal experience and info I've read here.

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[Anonymous]

Ok, so Ive went back and forth with them through email and that basically (according to them) qualifies as my LOE's....and Ive had to explain every single change....

Anyways, the reason I think that she thinks I was lying is because of the account I opened end of May that just appeared this week.....as I told her, I thought that was strange as well, BUT I haven't used it and have been told before that some companies don't report for a month or two out....(which this would be the case)...

This is only the 2nd real issue we've had w/ her after the whole pulling credit from the wrong SSN issue.....

Besides them being super slow already on the paperwork, things have went pretty good and we'd had a good email and phone repoire....

Its just frustrating because they were behind w/ their paperwork to begin w/ and now after ordering not one but two supplement reports, I think we finally have things in check....but they need to final approve (which I talked to the UW and she doesn't see it being an issue w/ my DTI) and THEN go through USDA approval.....

AND my realtor is getting on us and them because we were supposed to close tomorrow and she said the seller has free reign to do whatever they want now because we'd be past close date as of 5p tomorrow.....

I was just curious how worried I should really be....

And yes, about the loan taking down my score....I was told to very well expect that to happen til its paid down sufficiently.

[Booner72]

You were told that your score would go down until the mortgage loan was paid down sufficiently?

Huh - I'm curious what will happen to my scores when the mortgage hits.  i think it will go up bc mortgages look good to creditors.  We'll see I guess.

Again, good luck.

[Anonymous]

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@Booner72 wrote:

You were told that your score would go down until the mortgage loan was paid down sufficiently?

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Yeah, I was told to expect a decrease for a little bit of time....

So between that and the house and possible CC bills.....I am about scared stupid right now....

All I want is to hear the closing is tomorrow, bring the money....I don't even care at this point about laying down 15k, I just want the keys to the house!

[Lel]

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@Anonymous wrote:

Also, no, I was never told not to do this by my LO....she just basically told us not to do anything that would lessen our credit profiles. 

And yes, about the loan taking down my score....I was told to very well expect that to happen til its paid down sufficiently.

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Though she didn't say it explicitly, applying for and/or obtaining new credit in the midst of a mortgage approval process would be an example of something that could negatively affect a person's credit profile.  Remember, mortgage approval is not based solely (or even predominantly) on the credit score alone, but on the contents of credit report.  If your application package is otherwise strong - good down payment and other assets, clean credit history, stable job and income, etc. - then perhaps the 3 new CCs won't be a dealbreaker.  But it won't make the underwriter very happy, either.

With regard to the comment about the mortgage hurting your score until it is paid down, there is simply no factual basis for that claim.  A mortgage is installment debt, not revolving debt (like credit cards).  The "utilization" of a mortgage loan - the current balance vis-a-vis the original balance - is not a major factor in one's FICO score.  In my experience, it has no effect whatsoever.  If anything, a mortgage loan is more likely to result in a long-term increase in credit score, since it adds to your diversity of account types.  People sometimes report a short-term drop when the mortgage first hits their report, but the recovery is pretty quick.  In my case, when I first got a mortgage my score went up by at least 10 points, as did my wife's.

Anyways, I hope everything works out for you.

[Anonymous]

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@Lel wrote:

Though she didn't say it explicitly, applying for and/or obtaining new credit in the midst of a mortgage approval process would be an example of something that could negatively affect a person's credit profile.  Remember, mortgage approval is not based solely (or even predominantly) on the credit score alone, but on the contents of credit report.  If your application package is otherwise strong - good down payment and other assets, clean credit history, stable job and income, etc. - then perhaps the 3 new CCs won't be a dealbreaker.  But it won't make the underwriter very happy, either.

With regard to the comment about the mortgage hurting your score until it is paid down, there is simply no factual basis for that claim.  A mortgage is installment debt, not revolving debt (like credit cards).  The "utilization" of a mortgage loan - the current balance vis-a-vis the original balance - is not a major factor in one's FICO score.  In my experience, it has no effect whatsoever.  If anything, a mortgage loan is more likely to result in a long-term increase in credit score, since it adds to your diversity of account types.  People sometimes report a short-term drop when the mortgage first hits their report, but the recovery is pretty quick.  In my case, when I first got a mortgage my score went up by at least 10 points, as did my wife's.

Anyways, I hope everything works out for you.

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Lel-

While it may not be a great indicator opening new lines, I have not used any of this available new credit, with the new credit our DTI will still only be at 18% front end and 28% back end.....and my job and income are stable and above what we're purchasing, and pretty clean credit history w/ no lates and only a medical collection from 05 on record that I was told would be no big deal by any means.....and Ive paid every single CC bill in full and always before or on time.....

But thanks for the info on that 2nd point....that at least makes me feel a bit better knowing what to look for there.....appreciate the response.....right now, the wait is killing me!