topic Re: Please help verify or bust a myth... in Mortgage Loans

Please help verify or bust a myth...

NY_Beauty — Mon, 21 Jan 2013 02:57:26 GMT

I've heard that once you buy a house your credit score increases. I can see reaons for it increasing and decreasing but curious to know the real deal! :smileyhappy:

Re: Please help verify or bust a myth...

Walt_K — Mon, 21 Jan 2013 04:38:21 GMT

Some people do see a benefit from adding a mortgage loan to their profile. It improves your mix of credit. At the same time, it adds a new account, so you'll get dinged for an inquiry and lowering your AAoA.

Re: Please help verify or bust a myth...

NY_Beauty — Mon, 21 Jan 2013 13:33:51 GMT

Make perfect sense to me! I won't be looking for credit after I close on my place so it will be a good time to garden. :smileywink: (Not that I'm not gardening now... it's just that nothing is growing...) Lol!

Re: Please help verify or bust a myth...

JM-AM — Mon, 21 Jan 2013 13:39:06 GMT

If in the gardening stage, it takes a little time to increase scores. It all depends how many new accounts were opened, what type of accounts were opened. Generally you see scores rebound within 12 months.

Re: Please help verify or bust a myth...

MovingForward_2012 — Mon, 21 Jan 2013 15:48:29 GMT

Yes a mortgage loan is considered the most prestigious trade line to have as lenders know it requires more skill and discipline to obtain.

But how much your credit will increase depends on each person's profile. A new account and the associated inquiries almost always drops a score initially but after 6-12 months of on time payments to a mortgage loan (assuming no new apps during this time) should boost one's score nicely. But as one person mentioned, you will probably see a small increase right away just by having a new mortgage loan account as it will diversify your credit portfolio using the most prestigious trade line obtainable. The simulators I have used show a 10-30 pt boost in score based on adding a mortgage account to your credit report with more pts in the future after the gardening phase. YMMV of course.

Re: Please help verify or bust a myth...

NY_Beauty — Mon, 21 Jan 2013 22:02:08 GMT

Great info! Thank you!

Re: Please help verify or bust a myth...

beb86 — Tue, 22 Jan 2013 06:14:07 GMT

NY_Beauty wrote:
Great info! Thank you!

Yes an a mortgage TL will also help down the road on maxing your score since you will have a nice mix on your account mix..