The Silent Score Killer: How Closing Credit Cards Could Ruin Your Mortgage Dreams
You’ve found the perfect home. Your offer has been accepted. The inspections look great. The finish line is in sight, and you're getting ready to close.
Then suddenly—your credit score drops.
What happened?
The Credit Card Mistake That Could Cost You Your Home
It’s more common than you think. Borrowers, in an attempt to “tidy up” their finances before closing, often decide to close out unused credit cards—especially ones they haven’t touched in years or those with high interest rates. It seems logical, right?
But here’s the problem: when you close a credit card, the entire payment history tied to that card disappears from your credit report. And if that card has been open for 5, 10, or even 15 years? That long history of on-time payments is erased.
This loss of credit history can lead to a significant drop in your credit score, potentially knocking you out of mortgage approval range just days before closing.
Why This Happens
Your credit score is determined by several factors. One of the most influential? Length of credit history.
When you shut down older accounts, you shorten your average credit age and lose positive payment history. That’s like deleting years of good behavior from your financial résumé.
Don’t Let Good Intentions Hurt You
Before making any changes to your credit profile—whether that’s paying off debt, applying for new credit, or closing accounts—talk to your lender or credit expert. They can advise you on what to do (and what not to do) to keep your credit score strong through closing.
Pro Tip: Keep Things Steady
Once you’ve been pre-approved for a mortgage, your credit report is essentially “locked in.” That means it’s your job to maintain the status quo:
Don’t open or close credit cards.
Don’t finance new purchases.
Don’t max out existing cards.
Don’t miss payments—even by a day.
Final Thoughts
It’s tempting to declutter your finances as you prepare to buy a home, but remember—credit history is king when it comes to loan approval. Play it safe, keep those old cards open, and ask questions if you're unsure.
You’re this close to the keys. Let’s not let a silent score killer stand in your way.
Want help navigating your credit before buying a home? I’m here to guide you every step of the way.
📩 Email me with questions or reach out directly at KennethM@kwdsm.com
📱 515-201-6664