I have been shopping around for another credit card but I am also applying for a mortgage. Is that a problem?
It could be. When you apply for a mortgage, you don't want new credit inquiries on your credit report. For one thing, every single inquiry can hit your report with a five-point penalty. Most importantly, you don't want a lender to think you need money right now. So, no, don't make any credit moves while applying for a mortgage. Keep your bills paid and your credit stable.
I had an eviction about five years ago. Will this affect my ability to secure a mortgage?
Evictions can seriously affect your ability to rent a home or apartment, and it might affect your credit score if there is a lawsuit or if a collection agency is involved.
One of the most important parts of qualifying for a mortgage is your credit score. Most conventional mortgages require a credit score of at least 620. Lawsuits and collections could bring down your credit score and, if you have an outstanding debt with high payments, it could also affect your debt-to-income ratio.
Evictions are reported on public court records, but usually not on credit reports, unless there is a lawsuit or collection agency involved. You should check your credit report with the credit bureaus.
If some eviction-related activity does appear on your credit report, it will be a red flag to lenders
If you do find that a collection agency appears on your credit report, pay off the balance. Some credit-scoring models will remove it once it is paid off. Even if it is not removed, your profile will look better to lenders if you have paid your debt.
Damaging information can stay on your credit report for seven years. During this period, work to have more positive information on your credit report by paying your bills exactly on time and keeping your debt low.
