Ask Adam Credit Tips

Is It Ok for Me to Apply for a Credit Card Before Closing on a House?

Your finances are rarely under such scrutiny as they are when you apply for a mortgage. You’ll need to provide plenty of documentation to prove your ability to make your mortgage payments consistently. I thought simply providing a selfie of me sitting in business class would suffice. It, surprisingly, did not. Even after your documentation has been submitted, any change to your financial standing or credit profile can bring scrutiny prior to closing.

Applying for a new credit card will most certainly lower your score slightly and temporarily. This is caused by the hard inquiry. But that temporary ding to your credit score isn’t your potential lender’s only concern—they may also wonder if you’re apt to take on additional debt. Will this cause your mortgage terms to change drastically? Likely not. Could they change? Absolutely. And with mortgage loan terms typically expanding out more than a decade, even small changes could mean big money.

Of course, this all predicated on your individual credit profile and your lender. Points and miles collectors often have little trouble explaining away a new tradeline on their credit report. Credit card churning is more popular than many probably realize.

The safest strategy is to make no major money moves in the months prior to closing. If that lucrative sign-up bonus simply can’t wait, it may be best to run it by your mortgage broker or loan officer first. They hate surprises.

Closing on a house can be extremely stressful and points and miles opportunities will always be there. Smooth sailing during closing may prove to be worth a lot more than a few extra airline miles.

The information herein should not be considered prescriptive financial advice. Travel Fanboy receives no commission or compensation from any credit card issuer or affiliated companies for links on this website. The opinions expressed are the author’s alone.

For information on how the churn and burn process can impact your credit score: Churn and Burn Credit Score Guide

About the author

Travel Fanboy

Adam is the host of the Travel Fanboy Podcast, editor of TravelFanboy.com, and a super famous travel influencer. He's no expert, just an enthusiast who enjoys having a top-shelf trip at a happy hour price. Formerly of Vegas Fanboy fame.