You’ve done everything right so far; you’ve found a great lender, received a pre- approval and submitted your loan package for final approval. Now you’re done, right? Wrong. Until you close on your new loan, it’s more important than ever to keep your credit steady; most lenders perform one last credit check right before they fund and a decline in your score can mean the difference between getting home and losing the loan.
Things You Should Never do After Applying for a Loan
- Don’t Change Jobs – While sometimes it’s unavoidable, especially if a new job is the reason for the move, but any change in income or job status creates risk and should be avoided if possible.
- Don’t Make Any Large Purchases – As tempting as it may be to go shopping for new furniture, wait until you close to make any large purchases. This applies to furniture, appliances and even new cars. New loans could change your debt to income ratio and cause you to no longer qualify for the loan.
- Don’t Apply for New Credit– Every time someone runs your credit report, your score is affected. This is not the time to search for a new credit card.
- Don’t Close Any Credit Accounts–It might seem counterintuitive, but closing or paying off loans or credit cards might actually bring your FICO score down. The length of time you’ve had your credit open has a positive effect on credit scores.
The bottom line is to avoid doing anything to your credit. If you’re unsure of what you can or cannot do, ask your lender; they can guide you in the right direction and make sure you close on your new loan.