A solid credit score is necessary to get approved for a home loan. That's why we recommend against opening any new lines of credit or making large purchases on credit when applying for a home loan --these actions lower your score, resulting in getting denied a mortgage.
But what about after? Does buying a house help or hurt your credit score? Let's find out.
The short answer is that credit reporting agencies will penalize your mortgage debt in the short term. However, soon after, there's a nice boost to your score, given that your mortgage payments have been on-time.
This eventual boost is why mortgage debt is considered "good debt." Here's why:
To summarize:
Installment credit, like a mortgage, eventually helps your credit history by making consistent payments that whittle down the balance. On the other hand, credit card debt can continue to climb, so it is more likely to impact your credit negatively.
While there is no definite answer as to when you'll see an improvement, on average, you'll see it recover in about 5 months. Also, that change may be in incremental jumps rather than one change.
However, remember that your other activities are also affecting your credit score. On average, the following activities will continue to affect your credit history for:
Use these tips to help you continue to build your credit score after a mortgage. These are based on FICO's recommendations --the most commonly used credit score model.
Obtaining a mortgage might make your credit dip slightly at first, but it will eventually increase – and maybe even higher than you had before! Start your pre-qualification online today and reap the many benefits that a home loan can afford you.
We've been helping customers afford the home of their dreams for many years and we love what we do.
Company NMLS: 183264
www.nmlsconsumeraccess.org
80-02 Kew Gardens Road
Suite 1040
Kew Gardens, NY 11415
Phone: (718) 520-7000
info@getmemortgage.com
Powered By LenderHomePage.com
R & J Capital Group, LLC strives to ensure that its services are accessible to people with disabilities. R & J Capital Group, LLC has invested a significant amount of resources to help ensure that its website is made easier to use and more accessible for people with disabilities, with the strong belief that every person has the right to live with dignity, equality, comfort and independence.
R & J Capital Group, LLC makes available the UserWay Website Accessibility Widget that is powered by a dedicated accessibility server. The software allows www.getmemortgage.com to improve its compliance with the Web Content Accessibility Guidelines (WCAG 2.1).
R & J Capital Group, LLC accessibility menu can be enabled by clicking the accessibility menu icon that appears on the corner on the page. After triggering the accessibility menu, please wait a moment for the accessibility menu to load in its entirety.
R & J Capital Group, LLC continues its efforts to constantly improve the accessibility of its site and services in the belief that it is our collective moral obligation to allow seamless, accessible and unhindered use also for those of us with disabilities.
Despite our efforts to make all pages and content on R & J Capital Group, LLC website fully accessible, some content may not have yet been fully adapted to the strictest accessibility standards. This may be a result of not having found or identified the most appropriate technological solution.
If you are experiencing difficulty with any content on R & J Capital Group, LLC website or require assistance with any part of our site, please contact us during normal business hours as detailed below and we will be happy to assist.
If you wish to report an accessibility issue, have any questions or need assistance, please contact us by sending an email to: info@getmemortgage.com