Did I make a huge mistake?

Question

My credit score is really high, 740. I opened up an account to get their preferred customer card at a furniture store. I have purchased about 4000 worth of furniture, but I was told that it would not be billed until delivery. I'm in the midst of waiting for my clear for my mortgage. I realize that you should not open any new accounts. Is this an awful mistake?

Answer 1

In "hind-sight" you should have waited. Is it going to be detrimental to your situation? No. If you are talking about a refinance or purchase of a new home that it is currently in process, you will be fine. That will close before the Furniture card records to your credit. You have a good credit score, but don't go ruining that by running up your revolving debt above 50% of what your allowed credit limit is.

Answer 2

You probably made a mistake. The minute you applied for the furniture store credit card the information went to the credit bureaus. The Mortgage company will verify the information they have prior to closing, they will pick up the application and possible charges (or holdings) on this credit card. It will change your Ratio.



You should go and talk to the people at the furniture store right away. Explain the situation and ask them to put everything on hold until after closing. I hope it is not to late.



I had a case with one of my buyers, he was in a similar situation, very good credit, good job. He was so happy about the new house and the closing date was very soon. He wanted to surprise his wife with a brand new car waiting for her in the Garage when they move in. He ordered the car to be delivered at closing date. He bought this car with a car loan he aplied for and was approved. The underwriter for his home mortgage picked it up just before closing. His Ratio had changed and blocked the closing. We talked to the car dealer and had to put the whole transaction on hold. We were able to close 1 week late. His wife got her car about 2 weeks after closing and was still very happy about both, the new house and the new car.

See what you can work out with the furniture store. I am sure they were in similar situations before.

Answer 3

How close were you to your closing date? It's possible that the banking reports have already cleared before this new card openned up.



What is the limit onf the card? Typically you can improve your credit score if you have a revolving balance between 10 and 25 % of a card's maximum balance.



But then you're also playing against your Debt-to-Income Ratio...



Yeah,it's not typically a good idea to open a new line of credit while buying a home, but hey, the damage is done, right?



Your credit will change some, but shouldn't hurt you too terribly much.

Answer 4

Well it's not that they will deny you...they would want to know what the NEW Monthly payments are, and the might want to pull a new credit report. Most furniture places only give you a line sufficient to purchase the furniture you want. THIS WILL HURT YOUR CREDIT SCORE because you're MAXED OUT with a NEW LINE. Your lender can pull a credit report before your mortgage closes, and will see the INQUIRY, even if they dont see tradeline being open. They might request a LOE (Letter of Explanation) If you want to remove inquiries than go to my profile...there's a link that shows how to remove inquiries for free among other free credit repair info

Answer 5

Maybe. I always tell my clients, no changes once the mortgage package has been signed. No new cars, job changes, big purchases or new lines of credit.



Call the furniture store and confirm that you are not going to be billed and the furniture will not be delivered until you are closed on your house.



Keep your fingers crossed.

Answer 6

Congrats on the credit score but call the furniture store and confirm that you are not going to be billed and the furniture will not be delivered until you are closed on your house or you are in danger of not closing.

Answer 7

During the mortgage process you should never open a new account, your whole debt/credit profile has now changed.



With a top-tier score, you were not borderline... at least not with creditworthiness. As long as your debt/income ratio wasn't borderline, you should be OK.



But generally speaking, you should have waited until the house closed before buying furniture.

Answer 8

You should not open any new accounts during the loan or mortgage process. Especially in this market right now. Any boo boos can get your loan denied. Hope your okay.

Answer 9

OUCH! now you have a debt for $4,000 on your card. Companies don't like when you owe more than half the allowed balance or max out the card