First Time Home Buyer - Does a new cc affect mortgage application?

Question

Quick question as a first time home buyer, I currently applied for a new credit card and I am looking to buy a house very soon (within the next 3 months). Before this new CC, I had a credit score over 700, will this new CC affect my mortgage application process? Even though I have not made any purchases on the card yet.

If yes, what suggestions would you give to increase my chances of still qualifying for a mortgage loan? Any insights will be helpful!

If yes, what suggestions would you give to increase my chances of still qualifying for a mortgage loan?  Any insights will be helpful!

Kai Kopsch · Answer

@Ody Orad, their many credit score models out, and everyone reports differently. There is a possibility that nothing happened to your score where its matters; the Critical Score Is the Lower Middle Score from FICO®. You find this score on myFICO.com their fees, but this way, you know for sure before you even apply for a mortgage. Like everyone says, the best praxis is not to apply for anything before buying a home and paying off all CC before the CC closing date.

Ody Orad · Answer

Thank you for you response Mike! I will do that.

Jared Hottle · Answer

Yes, applying for a new credit card can potentially impact your mortgage application process. This is because the act of applying for a new credit card generates a hard inquiry on your credit report, which can lower your credit score temporarily.

To increase your chances of still qualifying for a mortgage loan, you can follow these suggestions:

• Wait until after your mortgage application to apply for new credit cards.
• Pay down any high credit card balances to reduce your credit utilization ratio, which is a significant factor in determining your credit score.
• Make all your credit card payments on time to show lenders that you are a responsible borrower.
• Keep old credit accounts open, as a long credit history can positively impact your credit score.
• Consider working with a mortgage lender or loan officer who can help guide you through the mortgage application process and help you find the best loan program for your specific situation.

Eliott Elias · Answer

Applying for a new credit card can temporarily impact your credit score. This is a hard inquiry that's made on your credit report when you apply for a credit card, which can lower your score by a few points. If you have not yet used the new credit card and have not added new debt to your credit profile, it is unlikely to have a significant impact on your mortgage application process.

Dave Skow · Answer

@Ody Orad- thanks - most lenders  will use  a tri merge  report  -  this accesses  the three main bureaus  and gets   3  scores  ....the  middle  score  is used ....if you middle score  is under  700- the pricing  will be  slightly worse  than if you middle score is  over 700

Ody Orad · Answer

Thank you Kai!

Ody Orad · Answer

Got it! Thank you Eliott!

Ody Orad · Answer

Thank you Jared!! I appreciate the detailed response.

Option 1 is a little too late haha, I had initially applied for a new credit card because I was advised that it could improve my credit score by lowering my utilization. The thought of buying new home is something that had decided on late this month, so sucks to know I could have waited till the whole process was over.

I will reach out to lenders to see how I still qualify.

First Time Home Buyer - Does a new cc affect mortgage application?

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