Here is a handy list of Credit Do's and Don'ts that you should adhere to before and during the mortgage process until your transaction closes.
DO stay current on existing accounts - Late payments on any account that is reported to the credit bureaus can cost you dearly. One 30 day late payment will lower your score anywhere from 30 to 75 points depending upon the type of credit.
DO continue normal use of your credit - if your current credit patterns return a good score, there is no reason to alter your credit behavior. For instance, if you normally use your credit cards for expenses and pay the balance off monthly (love those airline miles!), there is no reason to discontinue that practice.
DO consult with your loan officer before making any changes to your credit, income or assets - an approval for a mortgage is based on many factors and a change in any one of those factors could negatively impact your mortgage approval. Discuss any potential changes to your situation with your loan officer before actually making changes.
DON'T apply for new credit of any kind - If you recieve invitations to apply for new credit, don't respond. If you do, that company will pull your credit report and this may have an adverse effect on your credit score. Likewise, don't start purchasing for your new home and establish credit for new furniture and appliances.
DON'T close credit accounts - If you close a credit account, it can impact your ratio of debt compared to available credit which has a 30% impact on your score. If the credit account has been long established, it could also impact your Credit History score which has an additional 15% impact.
DON'T consolidate debt to one or two cards - Once again, you don't want to change your ratio of debt to available credit. It may actually be better to spread out your outsanding charge debt debt among your existing cards.
DON'T over charge existing credit cards - remember that your credit score is a snapshot in time. Even if you have been diligent about keeping your balances below 50% over time, your score could immediately drop if you go on a shopping spree or buy one expensive "big ticket" item.
DON'T payoff old collections or charge-offs until after your mortgage application - although this seems counter-intuitive, paying off an old collection or charge-off could actually lower your score because the activity on an old item will cause it to be scored as though brand new. You won't escape payment though, the collections and charge-offs typically must be paid at the closing of your mortgage transaction.
DON'T co-sign or co-borrower for anyone else - co-signing and co-borrowing makes you obligated to pay if the primary borrower fails to do so. This will be treated as YOUR debt.