Credit Reports Under Extra Scrutiny

Buyers who are under contract and hoping to close before Nov. 30 when the first-time home buyer credit expires should refrain from buying furniture and other things on credit.

Lenders are running credit checks prior to closing day and any increase in credit card or other debt can jeopardize the loan, says Lew Reich, an associate with Keller Williams Realty in Plano, Texas.

Reich warns buyers to even refrain from checking out a new large purchase because even an inquiry on a credit report could scare a lender.

Reich tells borrowers: “If someone’s squeaking by and, all of a sudden, they may be looking at increasing debt, the lenders will have a keener eye in looking at your loan,” he says.

“Don’t look until you’ve closed is basically what it comes down to. That’s the safest way. Stay out of the stores,” he adds.

Source: The Associated Press, Dawn Wotapka (09/18/2009)