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Close cards before pre-approval

Posted on: 14th May, 2012 01:29 am
Hi… I’m trying to get pre-approved for my first mortgage loan within a few months. My present score is 786. I paid off a vehicle loan with time payments. I have 6 credit cards 3 are department store cards with a combined limit of around 8k with no balance the other 4 are regular visa cc's with a limit of 9k combined no balance or late payments. I want to close 3 of the visa cards bringing my limit back to 5k. The one I am keeping I just opened about 2 weeks ago. My question is if I close these cards will it harm my chances of getting a good apr. Also thought on how my vehicle loan being payed off will affect me it was the only loan other than cc's.
Hi bloom,

Closing down the cards just before taking out the mortgage may not be a good option. However, you can try avoiding new debts unless your mortgage is closed.

Thanks,

Jerry
Posted on: 14th May, 2012 03:30 am
Bloom;

Satisfying and closing debt may have a negative effect on your credit score. A 786 score is a very good score and there is no need to satify your debt unless you have a debt to income ratio issue. I would be glad to pre-qualify you and answer any questions you may have.

Best Regards;
Posted on: 14th May, 2012 12:35 pm
Creidit is based on the length of account, balance, late pays, over limit, etc...Key point is to keep any balance under 40% of the credit limit, but keep accounts open. The longer the account is open, the better your credit will be. Keep your accounts open, but at 0 balance. If you have many cards, even with low monthly payments, all of them combined could harm your debt to income ratio and make you ineligible to qualify.
Posted on: 15th May, 2012 11:30 am
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