Can You Spot The Homebuyer’s Mistake?

Can You Spot The Homebuyer's Mistake?

What will happen to Tom's credit score?

Incorrect

Correct!

Tom was smart to transfer the higher credit card balance to one with a lower rate. However, he erred when he CLOSED the established account. "Average Age of Credit" makes up 15% of your overall score. Closing an old account and opening a brand new one delivered a "double whammy" to the average age of Tom's credit and dinged his score.

So, the lesson here is important - if you're ever faced with a similar decision, even if you pay a credit card off in full, it is recommended that you do not close the account.

This Will Have No Impact On His Credit Score

Incorrect!

Next Step

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Improve your chances for homebuying success, since sellers heavily favor offers with pre-approvals from reputable lenders.

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