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Can too recent new accounts hurt the overall big picture?


SecretAgentWoman
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As you know, my goal is to qualify for a mortgage one day.

Now, the oldest good revolving TL account I will have then will be about 18 months old.

I was wondering, other than generating inquiries (of which I will be careful, but I hardly have any anyway) would there be negative consequences in opening new TLs within 6 months of applying for the mortgage?

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When I bought my house I didn't have any open accounts other than my truck, but while going through the mortgage process, they over emphasized the fact that I should not open or apply for any new accounts... I built a custom home so my process was about 4-5 months long.... So I would assume that 6 months wouldn't be much different. I have also had friends say that their mortgage company asked them to close some revolving accounts that they had....

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my understanding is once you get pre-approved (or know what amount you qualify for) or have a mortgage company working for you that you shouldn't open new credit or max out existing credit. Sometimes right before closing they pull credit reports/score again. And then it will turn out that the amount you qualify for will be less than the first pull and could keep you from closing. At least i think i am remembering that right.

BUT that is during the process.... I have no idea about the time frame leading up to it. The people that hang out in the mortgage forum might know better.

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Opening too many "new" accounts can do two thing to your credit picture. Long term, your "new" accounts will help your score as they age and a solid payment history will be displayed. Short term, too many recently opend accounts can hurt your overall credit picture and score because it looks like you are in financial distress and trying to obtain loads of credit. A good credit mix of revolving, installment and secured loans is the way to go. Also, debt to income ratio is a huge factor when looking at your overall credit picture. Carrying balances on those new accounts, both installment and revolving can have an affect on your overall credit picture as well. There truely is no right answer here....it's almost a case of dam*ed if you do...sort of thing. I personally would limit my opening of mew accounts to one every six months or so.

Of course, this is just my opinion...:D

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