Your Credit Score Once You’re Pre-Approved
For An Indiana Mortgage

When you apply for an Indiana mortgage, one of the first things your mortgage company will do is run a credit report. Each lender has different guidelines they must follow, but generally speaking, they will be looking for a score of 640 or better. Once they verify your score is where it needs to be, you can begin house hunting within the range you’ve been pre-approved for.  But be aware that during this process; your credit score CAN change.

 Click here to get pre approved for a mortgage

Below are some “Dont’s” to abide by during the loan process

• Don’t do anything that will have an adverse affect on your credit score while the loan is in process. If you are looking to move into a new house, you will be thinking about new appliances, furniture, etc. Make sure you do not apply for financing and use cash instead. Opening a new line of in-store credit can be detrimental to your credit score.  You need to remain stable until the loan closes as this will put you in position for the best interest rate.

• If you receive invitations to apply for new lines of credit, do not respond. If that company pulls your credit report this will have an adverse effect on your credit score. Even if you do not open a line of credit.

• Do not pay off collections. Once your loan application has been submitted, make sure not to pay off any collections unless the lender specifically asks you to. Paying off old collections causes a drop in the credit score. The last two years of activity is all the lender is looking at.

• Do not close any of your credit card accounts. If you close a credit card account it can affect your ratio of debt to available credit. This has a 30% impact on your credit score. If you need to close an account, do it after you close on your mortgage loan.

• Do not max out or over charge existing credit cards. Running up credit cards is the fastest way to bring your credit score down. It is possible for your score to drop 100 points over night if the cards are run up. Once you are engaged in the loan process keep your credit cards below 30% of the available limit. Do not consolidate debt to one or two cards. This can change your ratio of debt to available credit.

• Do not raise and red flags to the underwriter. Do not change your name and address or co-sign on another persons loan. The less activity during the loan process the better.

This would also apply to applying for a refinance.  Your credit score will be pulled for that as well.  Click here to see if you qualify for a refinance!  Be sure to consult with a mortgage professional to see if this is a logical option for you and they will guide you every step of the way.