Your credit score is one of the most important factors in mortgage approval, yet misinformation is everywhere. Believing these myths can cost you better rates—or even your loan altogether.
Common Myths Debunked:
- Myth #1: Checking your credit hurts your score.
Reality: Soft inquiries (like checking your own score) have no impact. Only hard inquiries from lenders can affect your score—and only slightly. - Myth #2: Closing old credit cards helps your score.
Reality: Closing accounts can reduce your available credit, which may hurt your utilization ratio and lower your score. - Myth #3: Paying off collections removes them from your report.
Reality: Paid collections may still appear, but they’re viewed more favorably than unpaid ones.
Best Practices Before Applying:
- Pay down credit cards below 30% of your limit
- Avoid opening or closing accounts during the loan process
- Monitor your credit regularly and dispute inaccuracies early
Conclusion:
Understanding how credit works can help you qualify for better rates. Get pre-qualified and review your credit with a trusted lender to avoid surprises.
