What I mean to say is this: If you have a loan application in process, do NOT - I repeat - do NOT buy a new car! I am sure many of you find it odd that I say this, but believe it or not, I have been faced with this situation more times than I'd like.
My words of wisdom - if you are in the process of purchasing a home or re-financing an existing home - do not open up a credit card account for that new living room furniture you've been eyeing, do not replace your car with this year's model....well, you get the picture!
Any line of credit, whether revolving, auto or loan of any type, can cause your credit score to drop. If it drops enough, it can actually cost you. Your credit score along with other factors determine the interest rate for which you qualify. Not only do you jeopardize your rate, you may also cause your debt-to-income ratio to increase and that may hinder you from qualifying for a loan that you once qualified for. Hold off on any major purchases that require you to open a line of credit until AFTER your home purchase or re-fi settles.....the new living room furniture can wait - you want to be sure you actually have a living room to put it in 1st!
No comments:
Post a Comment