{"id":2549,"date":"2015-12-01T22:43:18","date_gmt":"2015-12-01T22:43:18","guid":{"rendered":"http:\/\/teammovemortgage.com\/?p=2549"},"modified":"2020-07-13T22:34:07","modified_gmt":"2020-07-13T22:34:07","slug":"watch-out-for-the-holidays-and-what-they-can-do-to-your-credit-scores","status":"publish","type":"post","link":"https:\/\/teammovemortgage.com\/blog\/watch-out-for-the-holidays-and-what-they-can-do-to-your-credit-scores\/","title":{"rendered":"What Holiday Shopping Can Do to Your Credit Scores!"},"content":{"rendered":"

“Do you want to put that on your charge card for a special discount? <\/em>If you open a charge card with us, you will save 30% off of today’s\u00a0purchase!”<\/em> is what you will hear at every department store you visit\u00a0over the holidays.\u00a0 Sounds great, right?\u00a0Not when it comes to credit scores!<\/p>\n

\"credit<\/a>
Watch out for opening and charging on a new card during the holidays!<\/figcaption><\/figure>\n

Actually, opening a new store account and then charging your purchase on the card can dramatically lower your credit scores. You would not believe how much a new $300 card with just a $270 charge can do to your credit scores!<\/p>\n

Here are the top ways a holiday trip to the store can affect your credit scores<\/h2>\n

Remember that not only does shopping affect your credit scores, it also hurts qualifying for a mortgage, car, insurance, or other rates negatively. Here are the ways a new account hurts credit scores.<\/p>\n

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  1. New credit inquiries can lower a score<\/li>\n
  2. Newly opened accounts affect the\u00a0average age of your credit history which can lower your scores<\/li>\n
  3. Department store cards usually have a lower credit limit and if you are very giving this holiday, your higher balance compared to the limit will lower credit scores<\/li>\n
  4. Lump all of these together and you have a riskier profile as credit bureaus see it<\/li>\n
  5. Higher risk = Lower credit scores = Higher rates on mortgages, auto or student loans, or insurance rates<\/li>\n<\/ol>\n

    If a homebuyer opens two cards and charges near the limits, it could potentially take a score from 740 to 680 which often makes a big difference in loan approvals and rates.<\/p>\n

    If you are in the process of purchasing a home or will be in the next few months, talk to your mortgage professional before opening a new credit card account.\u00a0 An inquiry + new account opened + a purchase = Lower scores! Even worse, opening cards or spending during the mortgage process could turn an approval into a denial just before closing!<\/p>\n

    Additional Resources on Credit Scoring:<\/strong><\/p>\n