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Regular Contributor
NY_Beauty
Posts: 193
Registered: ‎11-10-2012
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Please help verify or bust a myth...

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:

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Senior Contributor
Walt_K
Posts: 3,065
Registered: ‎11-02-2009
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Re: Please help verify or bust a myth...

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. 

 


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


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Regular Contributor
NY_Beauty
Posts: 193
Registered: ‎11-10-2012
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Re: Please help verify or bust a myth...

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!

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Valued Contributor
JM-AM
Posts: 3,302
Registered: ‎06-09-2010
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Re: Please help verify or bust a myth...

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.
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Valued Contributor
MovingForward_2012
Posts: 3,406
Registered: ‎12-19-2012
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Re: Please help verify or bust a myth...

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.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! :smileyhappy: Last App: 4/5/13 Gardening until July 2014
Regular Contributor
NY_Beauty
Posts: 193
Registered: ‎11-10-2012
0

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

Great info!  Thank you!

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Valued Contributor
beb86
Posts: 1,115
Registered: ‎10-31-2011
0

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


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..

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