Pay Off Credit Cards Before Buying a House?

A reader (we'll call him Robert to protect the real identity of this comment) wrote in to ask:

Q - "I am thinking of buying a house. I have a credit card with a balance of approximately $3,000. Should I pay this off before applying for a mortgage, or will that hurt my FICO score to pay it off and hacve no balance?"

A - About 60 days before you apply for your mortgage be sure to have that credit card paid off completely. The purpose of the 60 day advance is to make sure your credit reports are updated to show the zero balance. It's somewhat comical that in the year 2009 you have to do it so far in advance in order to ensure that your credit reports reflect the balance, but these are the cards we've been dealt.

If you can do that then your mortgage application won't have any trouble caused by credit scores.

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