Is applying for a credit card before trying refinance my house a bad idea?

Huong
i want to get a new credit card to earn award points but my husband i are considering refinancing our mortgage. does applying for a new card before refinancing negatively impact your credit scores or other criteria relating to refis?

Clifton
Yes actually. Making an application for credit (aside from promotional offers banks send you) lowers your score.This is because inquiry into credit is somewhat correlated with credit problems, so banks will become more cautious with you (charge higher rates) if you do that.

Carolyn
If you have a high enough credit score and your debt to income ratio is not worrisome, it might not affect you, however I would advise you to wait. In addition to your income, these are the most important things that a financial institution takes into consideration when looking at your eligibility for a mortgage. At this point, they are looking even closer at that debt to income ratio than they are credit scores!You could have a great credit rating, but if your debt to income ratio is high you may not be eligible for refinancing. And keep in mind that if you get a new credit card with say a $5000 limit on it, the banks will look on that as a $5000 debt even though it has a zero balance since at any given moment, you could go into $5000 debt on that card. If you are going to apply for the card, tell them you want a low credit limit on the card - at least until you get your refi done. If you are at all at risk of not being able to qualify for the refi, wait until after you have closed on the loan.