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Bank accounts are not reported on your credit score. If you want to buy a house in the future, you need to have an open credit line in order to build your credit score. Charge less than 20% of the limit and pay it off on time and in full every month and that will build your score. A large part of the credit score is the length of time you have had credit, so open one as soon as you can.
You can open a credit card in both of your names now if you want, or just one and add the other later. The negative from opening new credit goes away after a few months so it won't matter by the end of the year.
Closing a bank account wont hurt your credit. If you are having issues deff bank elsewhere!
As for the credit card that could hurt your credit score #. Everytime you apply for a loan/credit card they pull ur credit report and it takes points off your card.
If YOU call and cancel a credit card it wont hurt your credit. It only hurts if THEY close the account.
Opening a new credit card hurts your score temporarily. I don't think it hurts it much though... and I'm not sure how long it takes to get the score back to normal.
I thought you had to have a credit card in order to get credit? You can only do damage with a credit card if you are irresponsible with it. Otherwise, it shows you are responsible with your money, which is really important when buying a house. Unless you can afford to pay cash for the whole thing (who can?!), you'll have to be able to prove you're able to buy things on credit.
agree! I work for a bank and we do not report to your credit report unless you owe the bank a balance and you dont pay it within 30 days. other than that its ok to close out a bank account.
the credit card will hurt your credit while buying a house in fact your loan processors will tell you do not open any credit cards or charge anything until after you close your loan. we had a couple get approve for a house and before closing they opened a credit card at a furiture store charged over 2000 and lost the loan because it hurt their debt to income ratio.
We both have credit cards on our own. He uses his weekly and it gets paid off in full but I haven't used mine in forever. I've also bought and financed something through Dell but that was paid off within a few months. I also have Sallie Mae and I haven't been late with any payments and I usually try to pay extra each month.
Do you have any credit cards / lines of credit? If not (or, if only 1-2 lines of credit), I would probably apply for a cc as soon as possible. I know some loans require a certain number of open trade lines (with positive histories) in order to qualify for a home loan. Have you already pre-qualified for a mortgage, or spoken to a mortgage agent – they would be able to tell you more, but I know they like to see open, positive trade lines (including cc).
Applying for cc does ding your score, so I would research options and apply to only one place to start, rather than applying all over the place :) Hoep this helps!
Thanks ladies!
We have been in the process of trying to go talk to finance people but I'm waiting on DH to get his stuff together and he said we should have it by next week but who knows when his mom will actually get it to him.
Closing a credit card WILL hurt your account if it increases your debt to available credit ratio, no matter who closes the account. It will be especially bad if the card company cuts you off. Applying for credit cards does give you a temporary dip in your credit score, as the companies you apply for check your credit, causing you to take a hit. Basically, showing you are looking for credit causes your score to temporarily decrease. Apply to only one credit card at a time to reduce this as much as possible, and space it out with your mortgage applications - give your credit time to get back to where it was before you take more hits for mortgage applications affecting your score. Also, if you don't already have credit cards, you should get one or two and carry a balance that you pay off each month. This will give you a positive credit history that will help you get a more favorable rate on your mortgage. But, it takes a couple years to really establish - this may effect your home-buying timeline. Do the math, see what waiting will cost you in terms of a lower APR vs fewer months of equity paid into the house. You may be surprised what a percentage point on your mortgage can do!
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I've been having customer service issues with a bank that I have had an account at for 8 years or so. I'm okay with not fully closing it but would it hurt my credit report or look bad in any way since we are in the process of saving for a house and plan on buying at the end of the year if I do close it?
Also what about opening a credit card? We had planned on getting one with both of us after we got married but are holding off because of the possibly damage it could do.