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Timing of Credit Check for Mortgage Application

credit inquiryTiming of credit check for mortgage application

We are working with a young power couple buying their first home. They have been doing lots of research and asking some very interesting questions. Today one of them asked me       ” When it comes to doing our credit check, is it more advantageous for us to be carrying zero balance on our credit cards? We typically used our credit cards for all purchases, and then pay them off twice a month. I just want to ensure that nothing unexpected impacts our mortgage application.”

If your credit history is strong, then there is no reason to delay accessing your credit  – having balances will have no impact on the application’s success. And anyway, if your balances are too high such that the GDS and TDS ratios don’t work  – you would just give an undertaking to the lender to reduce your balance before your closing date.

If your credit history is sketchy or borderline, then yes I would do everything possible to boost my score before submitting my application. One way is to ensure I keep all my balances at zero for the next several weeks.

The way to ensure that is to make frequent payments on your active cards pretty much as soon as you use them. This could make the difference between qualifying or not for a mortgage.

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