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Applying for multiple bank / credit union new a/c "bonuses" and impact on credit
Old 01-21-2022, 04:10 PM   #1
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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!
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Old 01-21-2022, 04:39 PM   #2
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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
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Old 01-21-2022, 06:34 PM   #3
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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.
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Old 01-21-2022, 06:50 PM   #4
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I just got 1st 1099 INT for the 4 bank promo deals I did last year. I wasnít expecting this, but I know I should have. Itíll be a 30% hit on the $1k in bonuses I received. Iím done with those.
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Old 01-21-2022, 08:03 PM   #5
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Quote:
Originally Posted by jazz4cash View Post
I just got 1st 1099 INT for the 4 bank promo deals I did last year. I wasnít expecting this, but I know I should have. Itíll be a 30% hit on the $1k in bonuses I received. Iím 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.
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Old 01-21-2022, 11:32 PM   #6
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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.
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Old 01-22-2022, 12:34 AM   #7
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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
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