@Anonymous wrote:I am freaking out! I started the mortgage process about a month ago, first time home buyer at 33. I used a local broker that has access to many lenders that work with people with challenged credit history. I have worked hard and managed to bring my credit score up by 150 pts in 2 months (2months ago it was mid 400s). When I first decided to try for a mortgage I was interested in the FHA loans because they had the smallest down payment option with 3.5% down, and could qualify with the lowest score of 580. My median score at that time was 572. Since then I increased my score, and managed to get my median score up to 620 which is exactly the minimum for qualifying for USDA 100% financing. My broker was confident that he could get me approved for a mortgage with my credit history and that score. I sent in all documents to him to look over and he verified everything and I got preapproved. Fast forward a month, and I am now under contract for a house I chose, have locked in my rate, have gotten all initial disclosures, and since this morning the appraisal was completed, and title work been ordered. We havent gotten the results of the appraisal yet, but should by Monday. Meanwhile, my middle credit score just dropped 17pts!!!! I am now down to 603! I am not exaggerating at all when I say I have done my homework, I have researched and read and read and read until I cant read anymore. There is NOTHING that has changed in my credit history at all since they pulled my credit exactly 30 days ago today, and no new inquiries either. --Before beginning the mortgage search, I opened two new credit cards because after extensive research and consulting with a financial advisor I was told it could bring my score up drastacially since I never had a credit card before, and only have a car loan in my name. It worked, and I was able to increase my score a ton in such a little amount of time by doing this. However, I only qualified for $300 limits on both un-secured cards. One of the cards is not the best (Credit One), has a higher interest rate and came with a hefty $75 annual fee that got charged right out of the gate as soon as I received the card. That hit my credit report and my score increased. I didnt and dont plan on using these cards as they were only a tool to improve my score. The only change in my credit report since the mortgage company pulled it is that I have paid that $75 annual fee off in one single payment so now my balances are $0. I havent used them at all. I cant see how paying that off dropped my score 17 pts. My question is, during the USDA morgage process (and I am located in Virginia) will they pull my score again before closing and see that it has dropped 17pts and deny my loan, even though nothing else has changed? I thought this would be a positive change but apparently I was very wrong. On the same day, which was yesterday, that the one credit card company reported my balance going from $75 to $0, they also automatically, without me asking or signing up for it, increased my credit line from $300 to $450 and that hasnt been reported yet. Will this hurt me too once that gets reported? And will my mortgage now fall through because my score dropped that much just from paying off an annual fee that I had no control over? My utilization is now sitting at 0% and my total available credit is now $750 between the two cards. I would consult my broker but i can NEVER EVER get ahold of him since my file got sent to underwriting with the actual lender. If it falls through now, I will be so upset and humiliated, as everyone is anticipating on me getting this house including my two children. Sorry this is so long, I just dont know who else to ask... ANY ADVICE WILL HELP!
I would suggest that
(a) you not post duplicate posts
(b) you write with paragraphs rather than stream of consciousness
(c) you avoid drama and stick to (1) the facts and (2) your questions
@Anonymous wrote:
1st. I didn’t realize I posted twice. My internet connection dropped when I first typed it and I didn’t think it went through so I apologize.
2nd. I am not trying to relay drama. I am just worried about underwriting since the score drop.
3rd. I am new to this forum and home buying and from what I’ve read on here a lot of times people answering ask for more info so I wanted to give the whole story.
Yes, a long post for sure, and paragraphing would have made it an easier read. 
You explained your dilemna well, and the drop in your score right before closing is certainly alarming.
Follow the recommendations of the other posters. They're right. SJ is usually very knowledgeable and helpful. Good luck to you - I'll be looking for your "New Home purchase" under Mortgages.
@Anonymous wrote:
Thank you all for the advice!
And just a quick update...I called the actual lender to ask generic questions about score dropping while in underwriting.
Was told that right before closing they do a score refresh, they don’t look at a new score, they just look for any newly acquired debt, missed payments etc. and told me my initial score would be used and is good for 90 days.
I think I’m ok. I just charged $5 on my other card that reports in 5 days. Hopefully I will gain some points back with that.
That's certainly good news to hear!
