Getting Pre-Approved after opening credit card?

[Deven L. Richardson]

Hi BP Community,

My wife and I weren't going to look for our first home until the spring of 2023, so she decided to get a new credit card earlier this month. While casually scrolling through realtor.com, we actually found a house with the ideal number of beds and baths (Northern NJ) that's in our price range and the sellers are very motivated, and the numbers make sense. My question is if we pulled the trigger for a pre-approval, would lenders look at the newly opened credit card be a cause for concern? Any input would be appreciated

Thanks BP!

P.S other factors lenders look at such as credit score and job security is not a cause for concern.

[Nick Belsky]

@Deven L. Richardson

Assuming we are talking about conventional financing here...

You will definitely want to disclose that you've opened a new credit card. Your Loan Officer, should ask you to sign a Letter of Explanation for any credit inquiries in the past 120 days and state whether you opened a new account from those inquiries. If the answer is yes and that new account is not already being reported as opened, you will need to provide a statement showing the current balance on the account. The balance, if any, will be added to your DTI calculation. The inquiry itself will usually have little impact on your credit score. If it is reported when the credit report is pulled, the revolving credit usage will likely drop (due to new credit being available) but you may take a hit for having a newly opened credit line. How much is hard to say as everyone's credit profile is different.

If you are currently sitting in a strong position to borrower, then opening a single card is not likely going to disqualify you.  It may add some additional paperwork to get past it, but shouldn't be anything too major.  Any proper Loan Officer can easily walk you through this process and answer any other questions you may have.

Cheers!