Just like missed credit card payments, any late bill payments can lower your credit score and affect your chances of getting a mortgage.
An overdraft is when you make a larger purchase than you have money in your account to cover, and the bank winds up paying the remainder for you. As you prepare for homeownership, resist the temptation to start making big purchases for your new home. Not only can large purchases increase your debt-to-income ratio, but you also risk overdraft, which can affect mortgage approval. Have you recently opened several new accounts? This is a red flag of risk to lenders because it can indicate you’re on a spending spree opening multiple lines of credit.