Maintaining a Healthy Status.
During the moving process it’s very convenient to use credit for everything from your home loan to your furniture financing to those fluffy new towels. While you’re busy filling out application after application, inquiries are being added to your credit history! Too many inquiries can lower your credit score and prevent you from obtaining future credit at the best rates possible.
By following these three simple steps, both you and your credit report can emerge from the moving process in a healthy state:
Watch out for department store credit card offers
Department stores love to promote their store cards. Oftentimes, a discount is offered if you apply for a card at the time of purchase. Don’t forget–when you apply for their card an inquiry will be placed on your credit report. And, if you qualify for the card you will have another revolving account on your credit report. For some, another revolving account won’t hurt their credit, and might even help it. But if you have too many revolving accounts another card could negatively impact your credit standing.
Beware of “piggy-back” offers
Retail stores have been known to place “piggy-back” offers on their credit applications. These are typically an offer for another credit card, in addition to the regular store card. To tempt you to apply for the additional card the store will usually have a special promotion, such as a store gift certificate.
- A Lesson from James
James, a 25-year old software engineer, applied for an electronics department store card while he was purchasing a stereo for his new apartment. There was an offer on the application to receive a $25 store gift certificate if he also applied for a bank credit card. “All I had to do was sign another line on the form and I applied for the card and got the gift certificate,” said James, “but I didn’t think about what another credit card would do to my credit.” Remember that if you’re approved for both cards, two new accounts will be added to your credit report.
Take care when shopping around for mortgage rates
While it’s a good idea to shop around for the best mortgage rate you can find, keep in mind that lenders will check your credit before they can decide on your loan terms. This credit check will place an inquiry on your credit report. Many scoring models combine all mortgage lender inquiries within a 30-day period into one inquiry. So, try to limit your shopping time to 30 days.
Moving to a new home is an exciting event, and your credit plays a major role in the moving process. With a little care and preparation you can ensure that your move is a credit-healthy experience.