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Utilization during Mortgage Process

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Utilization during Mortgage Process

Is it important to keep credit card utilization low during application process once preliminary credit run has been completed?


Planning for contingencies in case of funeral, etc.. I typically pay entire balances but would like to keep cash aside at least through end of process up until close if needed.


I know another soft pull is done, but once the initial credit is run to verify DTI do those same balances need to be reflected in soft pull?

Frequent Contributor

Re: Utilization during Mortgage Process

Unfortunately this is the very reason they do another soft pull, which is to see if you've incurred more debt. Either taken on CC debt or new car loan etc. If you go from $0 CC debt to 5-10k this could be a concern to the lender. I'd talked to your LO right now about your situation as it's best not to surprise them.

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Established Contributor

Re: Utilization during Mortgage Process

We lenders do a soft pull just before funding to insure you haven't incurred any "new debt". That's the Biggie! An incidental change in balance is not worrisome. Only when the balances have soared and there could be DTI issues due to this recent activity will the loan be flagged by the Funder. I tell all my borrowers during the home loan process. Fly low and avoid the radar. Keep everything quite, don't charge anymore on your credit cards and don't payoff any credit cards unless we have spoken about it.


Best wishes to you!


NOTE: paying credit cards to $0 balance can lower your scores.

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