Is Your Credit on Santa's Naughty or Nice List?
![top credit dos and donts during the loan process](https://d1xsnqu5ps7kqa.cloudfront.net/otf/72491aba6ddec/763c8a7d-f3c6-4b29-8549-cc0cd93e914a.png)
If you're planning on applying for home financing, be sure to stay on Santa's nice list! Check out our top credit do's and don'ts during the loan process.
Credit Naughty List
• Don't apply for new credit. You can lose points from your credit score for every credit pull.
• Don't pay off collections or "charge-offs." First, make sure that the debt is actually yours. Then, if you want to pay it off, do so through escrow. Also, remember to request a "letter of deletion" from the creditor.
• Don't close credit card accounts. While closing may boost your FICO score initially, closing credit will impact other factors in the score, like credit history, and will eventually drop it.
• Don't max out or over-charge credit card accounts. Try to keep your credit balances under 30% of their limit during your loan application process. And if you pay down balances, do it across the board.
• Don't consolidate debt. Consolidating your debt into one or two credit cards could make it seem like you "maxed out" on those cards and lower your FICO score.
• Don't do anything that may raise a "red flag" on the scoring system. Potential red flags include adding new accounts, co-signing a loan, or even changing your name or address with the bureaus.
Credit Nice List
• Do sign up for credit monitoring. Check your credit reports regularly (it won't impact your score). If something unexpected appears, address it promptly.
• Do stay current on existing accounts. Even one 30-day late notice can deal a heavy blow to your mortgage application
• Do continue to use your credit as usual. Changing your charging pattern would raise a red flag and cause your score to go down.
• Do consult your loan professional. A knowledgeable, experienced loan originator can help you navigate the application process and assist you in choosing a loan that best serves your needs.