10 Things That Could Negatively Affect Your Application for Credit

There are several financial activities can change your approval for a mortgage, and some that may even disqualify you. Here are ten things that could negatively affect your application for credit.

1. Making expensive purchases. Buying a new car, furniture, appliances or opening a new charge account adds additional payment liability and could impact the loan qualification.
2. Getting a new job or reducing your hours. A job change may be okay but work closely with your loan officer to review changes prior to making a move. A reduction in hours causes a concern about income.
3. Switching banks or transferring money. To eliminate potential fraud, most lenders require a thorough paper trail to document the source of all funds.
4. Disregarding your lender’s requests for information. Lenders need copies of bank statements, W-2s, pay stubs, and other paperwork in a timely manner.
5. Not making timely payments on credit card, installment or utility bills. The credit report has an expiration of 90 - 120 days depending on the loan program. A new credit report may be needed prior to the closing of your loan.
6. Neglecting to list a debt or other significant item on the application. A review of income documents will often reflect other obligations such as child support or business expenses.
7. Starting any new legal proceedings. Divorce, being a party to a lawsuit, new judgments and filing for bankruptcy are all found on court records and will be noted in the title insurance policy.
8. Co-signing a loan for anyone. A recently co-signed loan may be calculated as part of your monthly debts and could impact loan qualification.
9. Making large deposits to accounts if the money cannot be tracked on paper. Undocumented money can cause the whole account to become unusable for the transaction.
10. Spending the money needed for closing prior to closing. Many times updated balances are requested on loans.

Before you make any purchases or employment changes, talk to your lender.

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