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Effect on mortgage score if closing 2 brand new CCs

jason_l
New Contributor

Effect on mortgage score if closing 2 brand new CCs

Long story short. I got 2 new cc's on their way. I didn't need them, i have several. As of a few days ago, I'm unexpectedly mortgage shopping sooner than i expected.

 

Those 2 new cards are probably going to screw up my mortgage scores when they report.

 

If i close them immediately, will it reduce the negative effect on my scores of having 2 new credit cards?

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10 REPLIES 10
dragontears
Senior Contributor

Re: Effect on mortgage score if closing 2 brand new CCs


@jason_l wrote:

Long story short. I got 2 new cc's on their way. I didn't need them, i have several. As of a few days ago, I'm unexpectedly mortgage shopping sooner than i expected.

 

Those 2 new cards are probably going to screw up my mortgage scores when they report.

 

If i close them immediately, will it reduce the negative effect on my scores of having 2 new credit cards?


Nope. 

Closed or open, they will report and affect your mortgage scores the same. 

 

Message 2 of 11
SouthJamaica
Mega Contributor

Re: Effect on mortgage score if closing 2 brand new CCs


@jason_l wrote:

Long story short. I got 2 new cc's on their way. I didn't need them, i have several. As of a few days ago, I'm unexpectedly mortgage shopping sooner than i expected.

 

Those 2 new cards are probably going to screw up my mortgage scores when they report.

 

If i close them immediately, will it reduce the negative effect on my scores of having 2 new credit cards?


Sorry, no. Closing them won't do any good. You might as well keep them and let them report zero balances.


Total revolving limits 689000 (587000 reporting) FICO 8: EQ 718 TU 721 EX 698

Message 3 of 11
OmarGB9
Community Leader
Super Contributor

Re: Effect on mortgage score if closing 2 brand new CCs


@SouthJamaica wrote:

@jason_l wrote:

Long story short. I got 2 new cc's on their way. I didn't need them, i have several. As of a few days ago, I'm unexpectedly mortgage shopping sooner than i expected.

 

Those 2 new cards are probably going to screw up my mortgage scores when they report.

 

If i close them immediately, will it reduce the negative effect on my scores of having 2 new credit cards?


Sorry, no. Closing them won't do any good. You might as well keep them and let them report zero balances.


+1


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Message 4 of 11
jason_l
New Contributor

Re: Effect on mortgage score if closing 2 brand new CCs

I should clarify - i have not activated these cards yet, and they are not reported yet. The hope was they would never show up, or at least not hit me with a "new credit card" related neg on my mortgage score (which are very sensitive to revolving credit) if they do report.

Message 5 of 11
dragontears
Senior Contributor

Re: Effect on mortgage score if closing 2 brand new CCs


@jason_l wrote:

I should clarify - i have not activated these cards yet, and they are not reported yet. The hope was they would never show up, or at least not hit me with a "new credit card" related neg on my mortgage score (which are very sensitive to revolving credit) if they do report.


They WILL report, activation of the actual card has nothing to do with reporting. 

Message 6 of 11
donkort
Valued Contributor

Re: Effect on mortgage score if closing 2 brand new CCs

If you have a high utilization%, your utilization % will go down because you would have 2 more "credit limits."  This might even increase your score.  Credit card utilization counts greatly within credit scoring.   Especially if it brings utilization down to below 30%.  

FICO 8: EQ 803; TU 814; EX 821 as of 4/5/2022
Message 7 of 11
jason_l
New Contributor

Re: Effect on mortgage score if closing 2 brand new CCs


@dragontears wrote:

They WILL report, activation of the actual card has nothing to do with reporting. 

I only did this once (2 years ago) and it reported for about 2 months, then dropped. I wasn't sure if this was typical

Message 8 of 11
jason_l
New Contributor

Re: Effect on mortgage score if closing 2 brand new CCs


@donkort wrote:

If you have a high utilization%, your utilization % will go down because you would have 2 more "credit limits."  This might even increase your score.  Credit card utilization counts greatly within credit scoring.   Especially if it brings utilization down to below 30%.  


my utilization is 12k out of 75k, and dropping, so I'm pretty decent there. 

Message 9 of 11
SouthJamaica
Mega Contributor

Re: Effect on mortgage score if closing 2 brand new CCs


@jason_l wrote:

I should clarify - i have not activated these cards yet, and they are not reported yet. The hope was they would never show up, or at least not hit me with a "new credit card" related neg on my mortgage score (which are very sensitive to revolving credit) if they do report.


Probably they will report anyway, but you might as well refrain from activating them on the offchance that this might delay their being reported.


Total revolving limits 689000 (587000 reporting) FICO 8: EQ 718 TU 721 EX 698

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