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Question By
Mrsorea

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Did I mess up??
I have been preapproved by a lender for a mortgage on a home I am intending to purchase. We are five to six weeks from closing and I opened two credit cards in the last two months plus gotten a personal loan for $5250. One credit card has a 0 balance with a $5000 limit. The other one has $4200 on it with a $5500 limit. However, my income is such that I am buying a home for 1/3 of what I am approved for. But I noticed my scores dropped some from the multiple inquiries. I was at 734. Not sure where I am now. I also noticed that my credit history average dropped due to my new accounts. From 20 years to 10!

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That one card with a $4200 balance on a $5500 limit has a 75% utilization rate and that is unacceptable. 10% or lower and paid in full monthly is ideal. I strongly suggest taking the time to read the articles on this site so you will know how credit works and how to make it work for you.

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This going to be harsh and may even consider to be a di*k answer, however, it isn't my intention and I'd be more than happy to be dead wrong...

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I'd say you mess up whole ball of wax and then some. At very least, you can pretty much throw that pre-approval out of window, they going to restart the process all over again, I don't what what kind of pre-approval it was, did lender went deep into your credit profile and employment or simply pull your credit report?. I wouldn't be surprised if your score drops more than 50 points and the same lender denies you outright. Mortgage lenders are known to hold up entire funding process even with just one new inquiry being add to your credit reports, never mind that you opened 2 new credit cards with high balance which is pretty bad already and you got yourself a personal loan which most mortgage lenders frowned upon, in lenders eyes? you may just put yourself into a high risk borrower category, regardless your income to debt ratio, because in their eyes, if you are financially capable/stable? You wouldn't be needing a personal loan... I am shocked no one warn you not to add anything to your credit report until after its funded and closed.

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Reply by
JohnnyRain127

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Outside chance that pre-approval came after those activities?  Meaning lender knew about them and pre-approva you anyways. I am hoping that's the case.

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