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Please help - transferred debt over to spouse's to increase my score for joint mortgage application!

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Please help - transferred debt over to spouse's to increase my score for joint mortgage application!

Hi, me and my husband are getting ready to apply for a joint mortgage this week. About a month ago his scores were around 780 and mine were around 700. After briefly talking to a few lenders, I was informed that in this scenario - a joint mortgage application, they will use the applicant with a lower scores when determining interest rate. So what I did was (I hope it wasn't a mistake!) I transferred around 2k of my debt over to his credit card via a balance transfer and now both of our scores are around 730-740. We can't just pay the debt off right now because we need cash for down payment and closing costs. I really want us to have a solid 740+ because as another lender informed me, whether you have a 740 or a 760 -  you will qualify for a premium rate, is that true? We're in state of Texas. It will take us probably about 2-3 months to find a house, make an offer, do an inspection and etc, hopefully our credit scores are going to be only increasing with the monthly payments or we can even pay off more debt if that makes a huge difference for us. So my question is - will the lender do a periodic update of our report or go by the scores when they first pull your credit?  Thank you!

2 REPLIES 2
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Re: Please help - transferred debt over to spouse's to increase my score for joint mortgage applicat

Not a bad plan of attack - this will work favorably for you if your scores increased to 730-740. The lender pulls your credit just once in the beginning and it's good for 90 to 120 days depending on the lender and type of loan (ask your lender which one) As long as your loan closes within the specified time, the lender will not need to pull a new report.

The lender does in fact do a soft pull right before closing. It does not update credit scores but rather shows if you've opened up any new accounts or have late payments. It appears that you are doing a conventional loan. I hope this helps.
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Established Contributor

Re: Please help - transferred debt over to spouse's to increase my score for joint mortgage applicat

Just checking you are obtaining both middle mortgage scores and not looking at FICO 8 scores? 

 

I know you spoke of not being able to pay down currently. Mortgage scores in my experience, weigh more on the number of accounts reporting a balance. Say you have 5 credit cards, but 4 are reporting a balance. If they are small enough amounts, pay off 1-2. So you don't have over 50% of revolving credit reporting as such. 

 

Might either one be on the cusp of the utilization thresholds which give score boosts, <28.9% aggregate of all cards each file? So if you are near that with a 30.9 and can swing it, get it down to that amount. 

 

Good luck!!

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