@nadinemiller wrote:
I relocated for a new job and had to rent out my home. The area is pretty expensive so I decided that it made more financial sense to pay a mortgage on a property that I owned as opposed to paying rent. I closed on my new home a few months ago. The transaction has not yet appeared on my credit report but I am pretty worried because I know my debt to income ratio has gone up tremendously. How does this second home purchase impact my credit score?
Your DTI is not factored into your credit score. However, future creditors may see your loan balances and take that into consideration if you apply for new credit.
Your credit score will be affected by the new account, its effect on your average account age, and any inquiries associated with the loan application. The "utilization" of your mortgage loan - that is, the current balance as compared to the original loan balance - may have a very small effect, but it will be quite insignificant as compared to credit card utilization ratios.
