Hey everyone, It's been awhile since I've posted. In the middle of paying off my cc wedding debt to try to bring my fico score up for refinancing for some of the killer interest rates, and wanted to share a technique that worked for me for my last refi... You figure out the date that your CC company reports to the Credit reporting agency (usually a few days after your payment date, but you can subscribe to true credit to be sure), and pay that bill off first (or balance transfer). Once that is reported as zero, do a balance transfer from another card to the zero card (depending on the date they report). The "zero" card still shows up on your report as zero (until next month) Some cards let you change the date of your due date, so you manipulate that to your favor. What happens is that you time your refinancing to the exact moment when your debts appear to be the closest to zero, even though you owe more money in reality. Most of the time, the mortgage company will pull your report in the beginning of the refinance process, so you are home free. It's amazing that you can manipulate your interest rate for your refi by 1 or 2 points using this method. Good luck!!
Just be careful as there is normally a disclosure required as to all outstanding debts during a mortgage application.
geez, don't let Fair Isaac hear about it. We'll have FICO 08.5 But like Bizwiz said, you still need to disclose your debts on any applications, regardless of what your credit report says.
You also don't want to get caught when the mortgage company (lender) pulls your report for a "review". This is normally done within the first three months. The "fine print" regarding disclosure could come back to bite you. You also would need to time this move very well, as often there are reports taken prior to closing for verification purposes.
Exactly. It may work for the application pull, but they could pull a day or two (or a week) before closing to make sure nothing has changed. And you don't know when that pull will be, so you can't really manipulate it. Very dangerous business--you could go to closing only to find out that the lender has revoked the decision to fund the loan.
Good points Good points everybody. This technique happened to work for me about two years ago when I went through a mortgage broker, my rate never went up and my report wasn't checked again during or after closing. My rate was definitely lower by doing it, because I had checked rates a few months earlier and it was substantially higher. My mortgage broker was also a friend, so maybe they gave me the benefit of the doubt by not pulling my report again. I also know things have changed in the mortgage industry, so tread carefully with this technique. It probably works the best with applying for a new credit card for a lower rate these days. Thanks for the comments!
