Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Applying for multiple bank / credit union new a/c "bonuses" and impact on credit
Old 01-21-2022, 03:10 PM   #1
Recycles dryer sheets
 
Join Date: Mar 2021
Posts: 216
Applying for multiple bank / credit union new a/c "bonuses" and impact on credit

If you apply for multiple banking / credit union bonuses over a one year period (which results in multiple checking accounts, specifically, and maybe a few savings accounts), how does this impact your credit score when you apply for a home mortgage?

Applying for bank / credit union bonuses for new accounts seems like a safe way to earn some extra cash doing the things you'd "normally" do anyway (spend $250 a month on their Visa debit or credit card, have a direct deposit of $25 minimum a month into the newly opened a/c & so on), but I'm wondering how all this activity and inquiry into your credit affects you when it comes time to apply for a mortgage? Mostly, I'm trying to figure out how these multiple applications affect one's credit score, esp if all the a/c openings happen just before a large loan application?

Does it matter if only one partner applies for the bonuses and the spouse does not?

Is it better to completely avoid "fishing" for these new account bonuses the year prior to applying for a mortgage?

Please advice. Thanks in advance!
Safire is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-21-2022, 03:39 PM   #2
Full time employment: Posting here.
 
Join Date: May 2011
Posts: 770
For the most part opening a bank checking account does not affect your credit score.

Found this article on the web.

https://www.brtelco.org/resources/bl...-credit-score/

Hope this helps. YMMV
__________________
you interpret daily life according to your ideas of what is possible or not possible - Seth Speaks
11522914 is offline   Reply With Quote
Old 01-21-2022, 05:34 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 7,863
Generally speaking:

A bank may pull your credit report when you ask to open an account.

They are required by law to notify you of this and get your permission to do so beforehand.

If they do this, then you will end up with what is called a hard inquiry on your credit report.

Each hard inquiry will reduce your credit score by a few to several points. This impact starts to fade at six months and lasts up to two years. (Note that other factors may be improving your score at the same time, so your score may recover in a shorter time frame.)

For a mortgage application, a quick google shows that the lender looks at the average credit score for both spouses and then the lower credit score determines the mortgage terms.

I think lenders also put borrowers into tiers: "above 800", "above 760", "above 720", etc. As long as any credit games you play keep the spouse with the lesser credit quality in the same tier, then there would be no effect. But if they dropped into a lower tier then there would be a step down effect in the terms on the mortgage. So a 5 point drop might have no effect, or it might raise your interest rate by a quarter percent if it results in them crossing into a lower tier.

And different lenders may have different tier breakpoints and may even use slightly different credit scoring models.

On balance, if you can do it without dropping a tier, then it's easy money. But if you do it and drop a tier, you're being penny wise and pound foolish. And the problem is you probably can't tell for sure in advance which case it will be.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is offline   Reply With Quote
Old 01-21-2022, 05:50 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Aug 2004
Location: Laurel, MD
Posts: 8,304
I just got 1st 1099 INT for the 4 bank promo deals I did last year. I wasn’t expecting this, but I know I should have. It’ll be a 30% hit on the $1k in bonuses I received. I’m done with those.
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
jazz4cash is offline   Reply With Quote
Old 01-21-2022, 07:03 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 7,863
Quote:
Originally Posted by jazz4cash View Post
I just got 1st 1099 INT for the 4 bank promo deals I did last year. I wasn’t expecting this, but I know I should have. It’ll be a 30% hit on the $1k in bonuses I received. I’m done with those.
Right. Bank bonuses are typically reflected on 1099-INTs and thus are treated as taxable unearned income.

Credit card bonuses are treated as rebates, and are thus not taxable. I like those better for that reason. They're also simpler in my mind to do, and the bonuses are generally bigger.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is offline   Reply With Quote
Old 01-21-2022, 10:32 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 9,358
I didn't notice much of a credit hit from opening credit cards for the bonus points, but we did hold off from doing that the year we refinanced. The lenders ask about every hard pull.
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
daylatedollarshort is offline   Reply With Quote
Old 01-21-2022, 11:34 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Sunset's Avatar
 
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 16,973
I would do the credit card offers, at the rate of 1 about every 4->8 months so my credit score recovered from the 20 point hit before I got the next card. Mainly the reason is because it can take a couple of months to spend the required amount.

If I was signing up a new mortgage next week or next month, then I'd wait until the ink dried before signing up for a credit card
__________________
Fortune favors the prepared mind. ... Louis Pasteur
Sunset is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Credit Card for Bonuses and Perks ferco Life after FIRE 35 06-25-2023 06:58 AM
Do you chase travel credit card signup bonuses? Carpediem Travel Information 38 08-02-2019 11:14 AM
How do you manage multiple homes, multiple states? Stonewalker Other topics 29 06-01-2019 08:54 AM
Brokerage New Account Bonuses Debinnov a FIRE and Money 34 11-18-2018 07:00 PM
Should I Use PenFed Credit Union Checking or Another Credit Union? nico08 FIRE and Money 10 02-28-2014 10:19 AM

» Quick Links

 
All times are GMT -6. The time now is 02:10 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.