Charlotte, NC · Member since 2014 · 19 posts · 6 votes
What would happen to my credit score in the end if I were to use an interest free credit card to finance a flip, flipped the house, and paid back the card?
I understand that my score would initially go down b/c I am using more than 75% of my available credit, but once it was all paid back off, would my score go back up to it's original level, higher, or lower?
Investor · Bellingham, WA · Member since 2013 · 210 posts · 138 votes
11y
It might not go down (or not much) if you QUICKLY flip the house (say, less than 60 days). Assuming you'll have to hold the property longer than that, it will usually drop (for me) 10-12 points based on "over utilization" but will pop right back up again (within 30 days of the balance being under 30%...or better yet, zero. Just remember, the credit agencies keep all this stuff hush hush, and everyone is weighted differently, so no one here can really tell you want YOUR credit will do, under the circumstances.
You can use the heck out of your credit cards, IF you pay them off within 30 days of the charge, and "technically" shouldn't get hit with utilization problems. The danger is that you max out that card and then can't flip that house....then you have a credit card payment AND holding costs. Yuck.