Question:

To recieve a mortgage I was required to pay and close all of my credit accounts.Will this reflect on my score?

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I had to close all accounts including credit cards that were all in good standing, the home I purchased was just beyond my home dept ratio,the actual mortgage doesn't go though for another week.I don't know if i should try to reopen some of these accounts or could this afect my mortgage? I have good credit and don't want my score to drop.

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6 ANSWERS


  1. If you are getting a mortgage, it is unlikely you will need to apply for any other credit any time soon.  You will want to keep the mortgage in good standing.  Any drop in your credit score from closing accounts will recover soon enough from paying your mortgage on time.  If anything, you may want to reopen one of your credit cards as a matter of convenience but no more than that.  Don't carry any balances and start saving money for purchases as opposed to using credit.

    Good luck in your new home.


  2. it will most likely ding your credit on a temp basis, but do not, under any circumstances apply for new debt until this closes, if they see you have new debt (most lenders pull credit again right before closing) it could throw your ratio's out of wack and nullify your closing

  3. Why would you go and open new credit cards before you close when the bank told you in order to get the loan you have to close these cards in the 1st place ? If you don't want you score to drop why are you buying a home that is beyond your debt ratio ? Without being insulting, this is a bad deal waiting to happen. If your credit was that good, the bank would not be making you close all these cards to get a loan.

  4. It sounds as if your mortgage company wants to be darn sure you don't rack up credit again... this could affect their decision to give you a mortgage.  My husband's exwife racked up some bad debts (in his name) and we were required to pay off everything before our mortgage was even okayed.

    If you're not comfortable with their request, as for it in writing and ask for a detailed explanation.  

    If you want the home, it seems to me that you shouldn't reopen these accounts unless it's an emergency.  Credit cards can be a bankruptcy waiting to happen - especially when you're a new homeowner and feel that the home needs updating NOW instead of LATER.  Then the bills come and you can't afford the credit card payment AND your mortgage.

    Good luck.

  5. Yes. I'm getting a loan that works the same way and they told me that my credit score would go up within 6 months.

  6. The mortgage company wants to make sure that you don't buy a house-ful of furniture at 18% interest, and then you end up in a situation where you're over your head.

    It also sounds as if you barely qualified for the mortgage.

    So don't do anything to jeopardize it.

    My advice:  

    1) Keep the accounts closed.

    2) This mortgage will be the last time you borrow money, from anyone.

    3) Start saving up money, and pay off your debts.

    Think about it:

    If you have $10,000 cash in the bank, would you ever need a credit card?  

    Or have to worry about your credit score?

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