Because all loan rates and financing programs are now credit driven, it is very important to be sure your credit and credit score will be acceptable to the Lender. The higher your score, the less risk a lender believes you will be. As your score climbs, the mortage company will possibly be able to offer a better interest rate and more financing options. Prior to the settlement, the lender may review your credit report again, and if there has been a change, you may no longer qualify for the rate that was underwritten and the final approval may come back with a higher rate. This could result in settlement being postponed or even worse,cancelled.

1. DONT APPLY FOR NEW CREDIT OF ANY KIND. Every time your credit is pulled by a potential creditor, you lose points from your credit score immediately (2-50 points possible)

2. DONT PAY OFF COLLECTIONS OR CHARGE OFFS. Paying collections will decrease the credit score immediately due to the date of last activity becoming recent. If you pay off old account, do it through escrow and make sure the 1) you validate that the debt is yours, and 2) that the creditor agrees to give you a letter of deletion.

3. DONT CLOSE CREDIT CARD ACCOUNTS. If you close a credit account it will appear to the FICO that your score has gone up. Also, closing a card will affect other factors in the score as length of credit history. If you have to close a credit card account, do it after closing and make sure it is a more recent account.

4. DONT MAX OUT OR OVERCHARGE ON YOUR CREDIT CARD ACCOUNTS. This is the fastest way to bring your score down 50-100 points.

5. DONT CONSOLIDATE YOUR DEBT ONTO 1-2 CREDIT CARDS. When you consolidate your debt onto one card, it appears that you may have maxed out on that card and the system will punish you as mentioned in #4. Wait until after closing to do this.

6. DONT DO ANYTHING THAT WILL CAUSE A RED FLAG TO BE RAISED BY THE SCORING SYSTEM. This includes adding new accounts, purchasing new furniture/appliances, co-signing on a loan, changing your name or address with the credit bureaus.

7. DO JOIN A CREDIT WATCH PROGRAM. You can check your credit reports weekly, or even daily. You do not ding your own credit report for a hard inquiry. This way, if something does show up on your report that has caused your score to go down, youll know it immediately, and you may be able to take care of the problem before closing.

8. DO STAY CURRENT ON EXISTING ACCOUNTS. Like your mortgage and car payments. One 30-day late can cost you from 30-75 points.

9. DO CONTINUE TO USE YOUR CREDIT AS NORMAL. Red flags are raised easily with scoring systems. It appears that you are changing your pattern, it will raise a red flag and your score could come down.

10. DO CALL YOUR MORTGAGE CONSULTANT IF YOU RECEIVE SOMETHING IN THE MAIL FROM A CREDITOR OR COLLECTION AGENCY THAT YOU BELIEVE MAY AFFECT YOUR SCORE DURING THE LOAN PROCESS. The loan consultant may be able to supply you with the resources you need to stop any derogator reporting to the bureaus.

PLEASE NOTE: Because your loan rate is tied to your credit score, know that when calling a particular lender, a loan consultant is giving you a quote based on the information you provide during this initial conversation. They can refine the loan rate once they have reviewed your credit report.

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