Still not happy

Overall, I do like USAA and have used many of their insurance and banking services for many years.

This blog post deals specifically with the USAA Mortgage service. You may recall my tirade against USAA Mortgage back in August 2008. It was during that episode that I learned USAA used to farm out their mortgage services, but had recently brought it in-house, "in order to provide better customer service."

A year later, I continue to have doubts about the quality of the USAA mortgage customer service. First, there was another comment I received on that post in August 2009.

Then, we had some very good friends of ours go through a very difficult house sale with USAA. I write this blog post on their behalf because (a) their story is another data point on the quality of USAA Mortgage customer service and (b) because they don't have a blog. They gave me permission to post their story here, and they have reviewed what I have written to make sure I got the facts straight.

Our friends are active duty Navy and were stationed in Florida. They bought a house there in 2005. They were very happy with their house there and would have loved to just stay there. Unfortunately, the Navy had other plans for them. They received orders to transfer to the DC area this summer, and they had to sell their house.

They were very happy they found a buyer for their house, but unfortunately, it was a short-sale. They had to sell the house for $80k less than what they owed on the house, so USAA had to approve the short-sale.

So let me ask you a question. If you were in the same circumstances, how long do you think it should take the bank to say "yes" or "no" and either approve or disapprove the short-sale?


17 minutes?


17 hours?


17 days?


17 weeks?


Let me ask the question one other way. Put yourself in the BUYER's shoes. If you put an offer on a house, how long would YOU be willing to wait for the bank to approve the sale before you give up, withdraw your offer and look for another house?

It took 17 WEEKS for USAA to make a decision on the sale of their house. Our friends were understandably worried that the buyer was going to give up and back out on the deal.

Now, in USAA's defense, I know they're taking a loss here and it's NOT a good deal for them by any means. I can understand reluctance on the part of USAA. Maybe it is prudent to stall a little bit and see if another buyer shows up and offers to pay more. ...but 17 WEEKS?!?!

There's another complaint about USAA's customer service in this case that just really bothers me though. Several times during those long 17 weeks, my friends called USAA to ask for the status of approving the sale. The customer service representative on the phone would offer the standard pleasant greeting and ask for their member number and password to access their account. When the account information came up on the representative's computer screen, there would be a sudden, "oh!" shift in attitude. As soon as they saw "short-sale pending" on the account, the customer service representatives proceeded to INSULT my friends by asking in a condescending tone, "Would you like to make a payment today?"

Our friends response? "Uhhh, NO, I DON'T want to make a payment. I'm NOT BEHIND on my payments, THANK YOU VERY MUCH. I pay my mortgage on time every month, and I would continue to do so if the Navy wasn't forcing us to MOVE."

I'm disappointed in you, USAA. On the insurance and banking side of the house, you have always treated customers such as me with the utmost respect and courtesy. That's why I've been a loyal USAA customer for so many years. It sounds to me like your mortgage service is still falling short of the mark.

My friends were already under enough stress and pressure having to deal with the PCS move (with the freeze the Navy put on PCS orders affecting them, too) and the short-sale. USAA is supposed to be a company that caters to the military, so you would think they would understand the concept of PCS moves and not insult their customers who are fully up-to-date on their mortgage payments but have to short-sell their house due to military orders.

On a positive note, USAA DID approve the short-sale, and our friends are very thankful for that. They are very happy that everything worked out fine in the end. It was just disappointing the stress that USAA added to the situation along the way.

Credit Score Nightmares

Once again, I am counting my blessings.

Given the way the economy is going, it freaks me out that we might not have been able to buy our house if we had moved here so much as one month later than we actually did. You may recall my previous posts about my credit score during our mortgage shopping experience.

Friends of ours have had their house on the market for about six months. They just finally got an offer on the house and accepted the offer, but the deal fell through.

Wanna know why?

The buyers weren't approved for the loan.

The loan required a credit score of 740, and their credit score was only 737.

Um... they've got a significantly better credit score than I do!

Holy crap batman! Seriously, that stupid $70 late payment to Dominion Power and applying for a Best Buy card to buy a TV (the two things that drove my credit score down BELOW 700) would have prevented us from buying this house if we had moved here a month later!

It probably goes without saying that I had a new appreciation for protecting my credit score after the mortgage debacle, but this just really drives the point home. (No pun intended.)

It's Official

We're poor again homeowner's again.

We closed escrow on our house in Virginia on Friday morning. It's a little weird owning a house 5,000 miles away that you've never seen with your own eyes.


Many thanks to our mortgage broker, Dave Jones with Prosperity Mortgage, for the quick turnaround on financing our mortgage after the fiasco with USAA. Also many thanks to the wonderful people at Vanguard who were very understanding and helpful in getting our wire transfer done on time.

Closing on this house was not as smooth as our previous house-buying experiences. In addition to the mortgage fiasco that I've already written about, we had a couple of other minor bumps in the road in the last few days before closing.

When we thought we were using USAA for our mortgage, then the wire transfer from Vanguard was going to be an easy phone call because it would be going to our USAA account that was already set up for wire transfers. Unfortunately, when we switched away from USAA, we didn't anticipate the wire transfer would take longer because it was going to a new payee.

I called Vanguard on Wednesday to wire the money and was alarmed to find out I would have to fill out a wire transfer form and take it to a bank for a signature verification (sort of like a notary, but somehow more trusted and special) and then overnight-it to Vanguard in Pennsylvania.

Doh.

Self, calm down. Take a deep breath. everything's okay. We can do this. We'll still make it on time. No problem. We just need to get moving on this. LW came and picked me up at work and we went to Navy Fed to get the signature verification stamp on the form.

We got that done pretty quick and headed to the FEDEX office at the airport. I figured being ON the runway that they'd put the envelope on the next airplane taking off. ...Nnnnnot so much. The FEDEX guy at the counter informed me that they don't guarantee overnight delivery from Hawaii.

Double-Doh.

Self, everything's not okay anymore. This is seriously bad news. FEDEX only guaranteed it would get to Vanguard by FRIDAY morning at 10:45. We were scheduled to close on Friday morning at 9 a.m.

I called Vanguard and explained the situation to them. I told them I got the signature verification stamp and the form was en route via FEDEX, but it wouldn't get there until Friday morning. The Vanguard representative put me on hold to discuss the matter with a supervisor. When he came back on the line, he agreed to accept a fax of the wire transfer form with the signature verification stamp and a copy of the FEDEX airbill. After they confirmed with FEDEX that it was a valid tracking number, they called me at my home phone number on Thursday and took a voice recording of me saying I authorized the wire transfer, and they processed the transfer that day.

My heroes! All's well that ends well. We look forward to getting to Virginia and getting to actually see our new house for the first time.

* * * * * * * * * * * * * * * * * * * *

It seems like most people we talk to are surprised that we would buy a house sight-unseen. I would think in the age of the internet, digital cameras, and GIS websites that it would become more common.

This is actually our second experience buying a house via the internet.

The first time we put an offer on a house sight-unseen was when we were moving from SOAC in Groton to San Diego. Since I grew up in San Diego, I was pretty familiar with the area. I had been browsing the realty listings on the internet and found an awesome house in a good neighborhood. When I emailed the realtor though, she said the house was already under contract. Bummer. Kept looking.

About two weeks later, still in Groton and browsing the realty listings again, I happened upon the same house listing. It seemed odd that the listing hadn't been removed from the internet. I wrote the realtor another email to ask if it was still under contract, and she wrote back, "It just fell out of escrow about an hour ago, would you like to see the house?"

My mom went and looked at the house, talking to us on her cell phone as she walked through the house. She and the realtor emailed us photos and a floor plan. We decided to jump on it and made an offer.

We had a "way out" in that there was the standard house inspection contingency. If there was a broken door latch, we could say, "No thanks," and back out of the deal. We already had a house-hunting trip scheduled over Veteran's Day weekend, so our house-hunting trip turned into a house-inspection trip.

That brings up sort of a funny story though...

WARNING: Tangent Ahead

We weren't the only people to place an offer on that house. There were two competing offers. The sellers were Navy and were transfering to the Naval Postgraduate School in Monterey where we had just come from. We figured they took our offer because we were Navy.

Fast forward to December. I graduated from SOAC and we were flying out to San Diego. My mom wanted to stock the fridge with some basic essentials like milk and juice so we wouldn't have to race off to the grocery store as soon as we arrived. She got to the house and was surprised to discover... there was NO refrigerator.

We called the realtor and she said the refrigerator wasn't included with the house. I said, "Oh yes it was! Look at the MLS listing!" The realtor admitted that she screwed up. She wrote "refrigerator" in the MLS listing, but the sellers had no intention of selling it and took the refrigerator with them.

In fact, and here's the real kicker, the realtor told us that the sellers chose OUR offer over the competing offer because we didn't ask for the refrigerator.

It all worked out though. The realtor gave us like $600 for a new refrigerator since it was her mistake. We chipped in some of our own money and got a pretty nice new refrigerator at Sears.

End of Tangent

I don't think I would be comfortable making an offer on a house sight-unseen in an unfamiliar area though. When we moved from San Diego to Ashburn, VA, I was going to be out at sea for my last 3 months on board, so while I was still in port, I helped LW with the movers and put her and the boys on a plane to DC to do the house-hunting in person.

That brings up another funny story, but I've already told that story in this post.

We didn't know if we'd be in Hawaii for more than a year, so we just lived in Navy Housing while we were here.

Now we're going back to DC. We're familiar with the Ashburn area. We're using the same realtor as last time. We found a house listed on the internet that we really liked and was listed for less than what we thought it was worth (based on analyzing recent house sales in the area). So we jumped on it.

Our friend Corey walked through the house for us and took videos with her flip video camera (thank you Corey!). It's a great house in a great neighborhood with good schools and close to our old church. It was too good a deal to pass up.

Maybe we're just crazy. Stay tuned for initial impressions of the new house in late September.

Furious

low·ball [loh-bawl]
–verb (used with object)
2. to deliberately estimate a lower price for (a service or merchandise) than one intends to charge: to lowball the cost of a move.
3. to give a false estimate or bid for.
Definition from Dictionary.com.

lie [lahy] - noun, verb, lied, ly·ing.
–noun
1. a false statement made with deliberate intent to deceive; an intentional untruth; a falsehood.
2. something intended or serving to convey a false impression; imposture: His flashy car was a lie that deceived no one.
3. an inaccurate or false statement.
4. the charge or accusation of lying: He flung the lie back at his accusers.
–verb (used without object)
5. to speak falsely or utter untruth knowingly, as with intent to deceive.
6. to express what is false; convey a false impression.
Definition from Dictionary.com.

Dear USAA Federal Savings Bank,

Today, you lost a customer. I feel betrayed and embarrassed that I placed my trust in you to finance my mortgage. I've been a USAA customer for over 14 years, and a USAA Federal Savings Bank customer for over 10 years. I've had two previous home mortgages through USAA.

Our realtor wanted us to use a local mortgage broker that she works with on a regular basis. I talked at length with the local mortgage broker and with the USAA loan agents to ask about policies, fees, rates, and closing costs.

The local mortgage broker told me that because my credit score was less than 720, that he was required to charge me an additional 1/8% on my annual interest rate. He assured me that this was standard practice and that when I looked at the rates on any other bank website that I would have to add 1/8% due to my credit score.

That sounded odd to me, and I wanted a second opinion. I called the USAA loan agent and asked: (1) Is it true that all banks will add 1/8% due to my credit score being less than 720? (2) Does USAA practice the same policy of adding 1/8%? His response was, "No, that is not true, and no, USAA will not add 1/8% to your interest rate due to your credit score." I trusted and believed him because I thought USAA would look at my credit report and understand the ridiculous circumstances that lowered my credit score less than 720.

All that being said, I set aside the questions about the interest rates and just compared the bottom line on the Good Faith Estimates from USAA and from the local mortgage broker. USAA's closing costs were $2,200 lower, and USAA's monthly payment was $38 less than the local mortgage broker's payment. The difference in monthly payments wasn't significant enough to sway my decision one way or the other, but the closing costs were.

Our realtor expressed concern that the numbers on the USAA estimate were not accurate and to verify. I didn't want to blindly jump on the USAA band wagon without understanding the reason why there was such a big difference in closing costs. One of the biggest factors was the difference in county taxes. So I called the USAA representative and asked him about the differences line item by line item. He kept reassuring me that of course USAA was going to be lower because USAA didn't have any hidden fees and we're not brokers out to make money - we're here to support YOU. When I very specifically asked about the county taxes, he replied to me on the phone and in an email, "we stand by our estimate."

Based on my history with USAA, I trusted you, and I chose to obtain my mortgage through USAA.

The first episode that challenged my trust in USAA was the phone call that made it clear to me that USAA had thrown me a lowball estimate to lure my business. The loan processor called and informed me that the closing costs were going to be $3,100 more than the original "good faith" estimate, due to things such as the county taxes. I voiced my displeasure with this, and the loan processor said she would run the numbers again and call me back.

After recalculating, she called me back with a new estimate of closing costs that was only $1,200 higher than the original estimate. I told her I still found that unacceptable since I had specifically brought this to the attention of the loan agent when I applied for the loan and he assured me the estimate was correct and "we stand by our estimate." The loan processor was terribly apologetic and said in order to keep my business, they would offer me 0.xx points or $962.50 off at closing. It didn't make up for the entire $1,200 difference, but it was most of it, and I acknowledge that there is some amount of variability in an "estimate."

That episode left a bad taste in my mouth. If my books weren't all in cardboard boxes on their way to Virginia right now, I would pull out my Social Psychology textbook and cite the chapter and page number about high pressure sales tactics and lowball estimates. This episode smacked of a classic lowball case study.

Everything was all set for closing escrow at the end of the month. My wife and I have just been watching the interest rates in order to decide when to lock-in our interest rate. Both the initial loan agent and the subsequent loan processor recommended we sign up for USAA's Rate Watch service that would email us the current interest rates every day. The emails tended to be slow, so I usually ended up checking on the USAA website.

The second and most recent episode that has destroyed my trust in USAA happened this morning. My wife and I decided the time was right, or rather the interest rate was right at 6.5%, and that I should call USAA to lock in my interest rate.

I called and told the USAA representative that I would like to lock in our interest rate. She was very cheerful and happy to help me, and said, "Let's take a look at what the rates are today." She proceeded to tell me that today's interest rate was 6.625%. I said, "Why is the interest rate you are telling me different from the interest rate on the USAA website?" She had to put me on hold to look into it, but when she came back on the line, she said it was because my credit score is less than 720, so they are required to charge me an additional 1/8%.

Saying that I lost my temper would be putting it mildly. I was absolutely furious. My hands were shaking I was so mad. The loan agent who convinced me to obtain my mortgage loan through USAA absolutely lied to me. The loan processor told me she would need to go review my file and call me back within the hour. I allowed her to go do her research while I let my temper cool off.

When she called back, she said she had reviewed my file and spoken with the loan agent. She tried to tell me that he didn't lie to me. She said it was because the interest rate he quoted me on the phone when we first talked already included that additional 1/8%, he was supposedly being truthful with me and telling me exactly the interest rate I was going to get.

She didn't get it.

I specifically asked him, "Does USAA add 1/8% to the interest rate because my credit score is less than 720?" He said, "No." Please tell me, how is that NOT lying? Plus, at NO point when the loan agent or the loan processor recommended that I sign up for the USAA Rate Watch program did EITHER of them say, "You will need to add 1/8% to the published interest rate because your credit score is less than 720."

That loan agent most certainly, flat out, absolutely, 100%, unequivocally, obviously, and unmistakenly

LIED TO ME

about the interest rate and

LOWBALLED

the initial "good faith" estimate in order to lure me in to choosing USAA over the other bank.

The loan processor was unwilling to acknowledge that the loan agent had lied, and she would not offer any other compensation for the difference. Her justification was that the closing costs now are the same as the closing costs on the good faith estimate (the updated one, after they fixed the lowball). I told her this wasn't about the closing costs. This was now about the interest rate and the subsequent monthly payment.

Looking at the table of interest rates and points on the USAA website, I saw that it cost 0.5 points to lower the interest rate 0.125%, so I suggested that she give me the 6.5% that is advertised on the USAA website and not charge me the 0.5 points. She said there is no way she could do that because she had already given me 0.xx points off. My rebuttal was that 0.xx points off was to compensate me for the initial lowball estimate and didn't have anything to do with the loan agent lying to me about the interest rate, but she refused to budge.

Luckily for me, the loan agent at the local mortgage broker was very understanding when I called him today. He still had all my pre-approved loan paperwork and said he would have no problem achieving our desired closing date. I obtained a new good faith estimates from both USAA and the local mortgage broker, and the local mortgage broker's interest rate, monthly payment, and bottom line closing costs are all lower than the updated USAA estimates.

Since USAA has violated my trust by lowballing me and lying to me, I am cancelling my loan application with USAA, and I'm going with the local mortgage broker.

In my previous blog post on this topic, I did not mention the name of USAA Federal Savings Bank, because I was giving USAA the benefit of the doubt. I assumed it was an isolated incident, and I didn't want to publicly criticize the bank for an isolated incident.

Now that it is clear to me from speaking to multiple personnel at USAA that USAA was not interested in maintaining me as a customer and unwilling to put their money where their mouth is. I am writing this as an open letter on the internet so that others can learn from my experience and be wary of future business dealings with USAA Federal Savings Bank.

Your absolutely furious and formerly loyal customer,
Kevin

Mortgage Fiasco Follow-Up

Thanks to those of you who have offered your feedback, advice, sympathy, and support on the mortgage issue.

I spent a good amount of time on the phone with a manager at the Big Name Bank (BNB) on Friday. She ran the numbers again and this time it came out $1,200 higher than the initial Good Faith Estimate (GFE). She was effusively thankful for our many years of being loyal customers to BNB and in order to keep our business, she offered us 0.XX points off our loan, which amounted to $962. So with that discount, we'll end up paying about $250 more in closing costs than what the GFE said, so it'll still be in the ballpark of $2,000 less than the Local Mortgage Broker's offer. I told her that would be acceptable, because I understand it's an "estimate" and there will be SOME variability in the final results.

Now, we're anxiously watching the mortgage rates and waiting. We can't lock in our rate until 30 days from closing (our closing date is 29 August) without paying a fee. We're hoping the rates take a little dip later this week.

Here's a snapshot looking out the back window of our new house...

Good Faith Estimates

Okay folks, I need to hear your honest opinions here. I have two questions:

1) If someone (like, say... a bank) give you a "Good Faith Estimate" for how much something will cost, then how accurate do you think that estimate should be?

Then, let's say, purely hypothetically speaking, that you review the estimate and think that they significantly underestimated something, so you call them and specifically ask them about the item you think they miscalculated or underestimated. Let's say, again hypothetically speaking, that the customer service representative on the phone tells you, "We're [insert name of BIG name reputable bank here], we do this all the time and we STAND BY OUR ESTIMATE."

2) So question #2 is: How would YOU interpret said big name bank representative saying they "stand by their estimate"?

Go ahead... Take your time... Give it some thought.

Now, click on "comments" below and tell me your answers to the two questions above.

After you've told me what you think without being biased by my opinion, then scroll down and I'll tell you what my take on all this is.





[Cue final Jeopardy theme music]





Okay, so let's just say that WASN'T such a "hypothetical" situation I gave you above.

My realtor has been pressuring us to use a local Virginia mortgage broker who she works with on a regular basis. So I asked for the Good Faith Estimates (GFE) from both the local mortgage broker (LMB) and from the big name bank (BNB). We've been loyal customers of the BNB for many years, and our past two home mortgages have been with them.

Comparing the two GFE's, the BNB's closing costs were about $2,200 LESS than the LMB (monthly payments were about the same). Between that and the fact that I didn't know or necessarily trust the LMB, we decided to sell our souls to get our mortgage from BNB.

Now, come to find out that BNB's GFE was a pretty substantial UNDERestimate... by about $3,100!!!! The underestimate is due to the EXACT thing that I pointed out to them in the first place. Now, BNB says, "Well sir, it IS an ESTIMATE, so it's NOT exact."

This brings me to my first question up above. Yes, I acknowledge it's an ESTIMATE and there is going to be SOME variability. But how much variability is "reasonable"?

10%?

20%?

30%?

The original GFE's closing costs were approximately $7,300. Now they're saying it's going to be $10,400????? That "good faith estimate" missed the mark by 42%!!!! It would have been cheaper to go with the LMB, and the LMB had accurate numbers in the line-items in question.

Let's move on to my second question above. After pointing out what I thought was probably a big underestimate on the line items for county taxes and title fees, the loan agent on the phone told me, "we stand by our estimate." I said to myself, "Self, surely you aren't the first person to ever buy a house in Loudoun County and use BNB for your mortgage." They do this all the time, so I'm sure they know what they're talking about. Besides, when he said, "we stand by our estimate," in my mind I interpret that as, "if it IS a miscalculation (especially after you've brought it to our attention as a potential error), then BNB is going to cover it."

Are these foolish or unreasonable interpretations???

In hindsight, I'm kicking myself. Maybe we should file this one under the category of "stupid kevin tricks." I was foolish and did something that I don't normally do. I accepted a non-commital ambiguous response on faith. I should have asked the loan agent point blank, "What if the estimate is wrong? What if the county taxes and title fees really ARE $X,XXX, then what is going to happen? Are YOU, BNB, going to pay for the difference?" Chances are, he would have said no.

Things I learned about my credit score...

As far back as I can remember, I've had really good credit. I can't remember ever having issues with my credit score. ...Until I recently applied for a mortgage to buy a house in Virginia. I discovered a couple of problems on my credit report of which I was previously unaware. I thought I would share these lessons I have learned the hard way to maybe help you avoid a couple of pitfalls I have unexpectedly encountered.

Problem #1: Beware PCS Moves! Be proactive in paying your final bills in your old duty station.


When I left for the training pipeline in Groton, I had orders to a boomer out of Bangor. While I was in the training pipeline, I got an ORDMOD (Orders Modification) sending me to a fast attack homeported out of Norfolk but on deployment and changing homeports to Pearl Harbor. When we sold our house and left the DC area, we provided a forwarding address for our final bills, but the final bill took a while to catch up with us in Hawaii at the end of the whole PCS move. As soon as we got the bill out here in Hawaii, we immediately paid it. Unfortunately, in the meantime, Dominion Power sent our final bill to a collection agency for the whopping $70 that we owed them.

The credit bureaus don't care so much what the reasoning was. All they care about is that you had an account that was sent to a collection agency. So the first two negative remarks on the credit report that surprised me were the "Negative Information - Collection" and the "Time since negative information too short." Ouch.

My advice to you is this: When you do your next PCS transfer, don't wait for your final utility bills to catch up with you in the snail mail to pay them. Proactively contact the utility companies and pay them over the internet or phone or whatever means necessary.
Disclaimer: This is NOT a complaint about LW. She worked her butt off selling our house and doing the HHG packout without me. I certainly wouldn't have done any better a job than she did. I'm just saying that we both learned we need to be more careful about this in the future.

Problem #2: Don't open a new account every time you want to make a big purchase.


If you've been reading my blog for a while, then you might remember the big TV debacle. That was when I tried to buy a new TV - first from Best Buy, then from Circuit City, then from the NEX. Why didn't we just get it from the NEX in the first place? Because Best Buy was offering 90-days same-as-cash financing, and the price was a lot less than what they were charging at the NEX. (We eventually bought the TV through the NEX's price matching program, but we paid it all at once instead of three monthly payments).

It's been a while since the big TV debacle, so in case you don't remember or you have recently started reading my blog, here's a quick recap:
- Applied for Best Buy credit card online. The online program said in order to confirm my identity, it had to ask me some questions. The questions it asked were totally bizarre and had no connection with my past at all (see the blog post for details). So I said to myself, "Self, just go down to the Best Buy store, SHOW them your ID card so they KNOW who you are, and get the credit card."
- Applied for Best Buy credit card in store. Denied. The letter that came in the mail later informed me that I was denied because I already had a credit application OPEN on the Best Buy website. I'm sorry that just makes no sense to me - I'm STANDING there IN the store SHOWING you my ID card... sorry, I'll get off my soap box before I get into a long diatribe about this.
- Applied for Circuit City credit card because they had the same TV for the same price and offered the same 90-day same as cash financing. Denied. The letter that came in the mail later informed me that I was denied because I already had a Circuit City credit account from when we bought our washer and dryer in Monterey back in 1999. Again, why didn't they just say, "Oh, you already HAVE an account with us, what would you like to buy today?" Again, getting off my soap box now before I spend too much time expressing my frustration with them.

Okay, so back to the story at hand: my credit report.

Yyyyyeah, each time you apply for a credit card, they run a credit check. It turns out that credit check shows up on your credit report as sort of a, "Hey, this guy wants to open a Best Buy account, so we're running a credit check" blurb. It turns out that having a whole bunch of credit checks on your account in the recent past is looked on UNfavorably by the credit bureaus and lowers your credit score.

I discovered I had a big misunderstanding about credit through this experience. I always thought it was no big deal to have a lot of credit accounts open with zero balance. I figured that was GOOD. I mean, that tells people that a lot of different businesses trust you, right???

Wrong.

In the credit companies' eyes, if you have ten credit accounts open with $10,000 credit limits, you could theoretically go out and max out all of your credit cards and suddenly be in $100,000 of debt, and you might feel more compelled to pay THEM than to pay your mortgage. That doesn't give the mortgage lender a warm and fussy feeling inside. In order to boost their confidence that YOU will pay THEM, they would rather you had as few credit accounts open as possible. Having credit HISTORY (of establishing debts and paying the debts off on time) is GOOD, but having a dozen different retail store accounts open and not being used (even if they have zero balance) is NOT good.

My advice to you is this:

1) Obviously, my three credit applications all at once in the pursuit of a TV were a huge mistake. The credit bureaus don't care about the extenuating circumstances. All they know is that you tried to open three credit accounts. Be cautious about opening new accounts or allowing businesses to run a credit check on you. It is now much clearer to me why companies ASK if they can run a credit check on you, because simply by them doing the credit check - it's going to leave a mark on your credit history.

2) Close old accounts. If you bought something under some promotion, that's great. Did you pay it off? Good. Now close the account. I was surprised to see I had a couple of accounts on there that I hadn't used since like 1996, but the account was still open. I closed all of those extra accounts, but I doubt it will update in my credit report soon enough to help my credit score for this mortgage.

Like I said, I hope reading this will help you avoid these pitfalls.