Lenders look at:
- Credit balances and minimum payments
- Credit depth (the number of accounts, with or without balances and length of time that the accounts have been open)
- Inquiries in the past 120 days that could result in new credit
- Judgments or liens
The credit report that’s pulled when you first apply for a real estate loan is not the only one that gets pulled. That credit report needs to be updated after 90 days and it’s very likely that there will be a second credit check at underwriting (that’s a pretty close to closing) just to make sure that nothing has changed.
Changes that could result in the need to re-qualify for the loan, possibly creating a delay or even stop you from getting your loan:
- New Loans–don’t do it, don’t get any new credit while you are in the process of buying a home
- Increased balances on existing credit line–don’t do it, don’t use that credit line to pay for appraisals, inspections or anything else
- Inquiries by potential creditors–don’t do it, don’t shop for a new car, appliances, home improvement or furniture
- Derogatory items (reports of late payments etc.)–in this case, do it, pay it on time or early, pay the whole amount due.