Credit Re-Fresh; Don’t Pay Cards to Zero or Close Them Out

We recently had a borrower who stopped making mortgage payments on one of her properties after we pre-approved her. A few days before funding, we ran a “credit refresh” only to find out she had late mortgage payments and her score had dropped to 617 (we had to pull the funding and re-structure her loan).

Quick reminder: All lenders “refresh” credit prior to funding loans. No new debts or late payments should be taken on or made during the pre-approval and escrow periods.

Two other reminders for borrowers wishing to elevate their credit scores: (1) don’t close out credit cards; just pay them down and leave them open; and (2) don’t pay balances to zero; leaving small balances usually results in higher scores.

Jay Voorhees
Founder/Broker | JVM Lending
(925) 855-4491 | DRE# 01524255, NMLS# 335646