Can You Spot The Homebuyer's Mistake?

What will happen to Tom's credit score?


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.

Next Step

Get Pre-Approved

Getting pre-approved is the first step in buying a home. By getting pre-approved, you can:

  • Focus on your home search, knowing your financing is in Poli’s expert hands.
  • Find out exactly what home price you qualify for and shop with comfort
  • Improve your chances for homebuying success, since sellers heavily favor offers with pre-approvals from reputable lenders.

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