Usually the general rule of thought is to not apply for any new type of credit 6 months before a mortgage app.
@Anonymous wrote:
When you add an auto loan to your credit mix presumably the immediate impact is to lower your score, and then over time it eventually boosts your score above where it was originally. Is that true? And in that case, how long does it hurt, before it helps?
In particular, I am looking at getting a mortgage in about 2 years. In the interim I will purchase a car. I could purchase a car outright for cash, but I could also get an auto loan just to prove that I can pay back loans. In that case, how long in advance of the mortgage should I get the auto loan? Assuming I get the auto loan 18 months before the mortgage, does it hurt or help?
18 months before? Go for it if you need a car, won't have any negative impact other than DTI calculation (if you keep it that long) as far as the mortgage goes. I'm personally not a huge fan of cash purchasing anymore given how cheap money is these days, and you might be able to refinance down to a sweetheart APR too after six months if you don't get a fantastic rate early but I don't recall your credit stats offhand.
