My credit score is 720 right now. I paid off $18K worth of credit card debt last week so my credit score should be around 800 once new balances are reported to credit score companies. Should I wait before applying for mortgage? I know they run credit check several times, first for pre-approval and another one before closing. Which one will determine interest rates? If it's the one before closing then I don't see point in waiting cause my score is good enough to get pre-approved and it will be up to 800 at the closing time.
Also I don't think your score will improve this much.
Also true. It won’t
It will according to two credit score simulators I used. Credit utilization is one of the biggest factors. Paying this off is changing my credit utilization from around 20% to close to 0.
Your score wont change so it doesn't matter
Credit utilization will go down, why won't it change? Every score simulator is showing that it will improve by a lot.
It will over time for sure but short term you won't see much change. Your history will be unique of course but generally speaking credit score is about consistency over long periods of time. Aim to keep your utilization under 10% and ideally you have more credit history than your age.
You absolutely won’t go up 80 points, 10-15 maximum. However I LITERALLY just spoke with Chase and my mortgage lender about this exact thing on Sunday; he told me the report they run at the start is valid for 120 days. As long as you close within that time they will not run a second credit pull, your rates are determined based on the first pull only - they won’t change once locked in unless there is a material change in circumstances (change in jobs, etc)
Lol It won’t go anywhere near 800.
It won’t matter for pre-approval. even after it posts, they’ll see it on your last payment amount and high balance for that account.
Why would they care that I had had high balance in the past if I paid it off?
It depends on how close it was to bring maxed out.