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Posts: 1
Registered: ‎08-23-2012
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No Down VA Loan hurt credit

[ Edited ]

Hi I have two question regarding my credit score and how to get them back up.  Background.  I recently purchased a home with a VA "No-down".  Much to my surprise my credit took quite a hit when I did that.  Seems lenders don't like it when you purchase a home with little or no down payment.  So question # 1 how long does it take to recover from that little mishap.  2nd question when looking at my credit report it would appear as my debt to income ratio is skewed heavily towards the debt side as I now own two homes and am making mortgage payments on both.  In reality my former home is now rented out and I have a "very" positive cash flow from that home (almost 3 times the mortgage payment).  Is there anyway to show that in my credit reports. 


Thanks to all who reply


Edited to remove personal info.

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Posts: 32,865
Registered: ‎08-04-2007
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Re: No Down VA Loan hurt credit

Where are you getting your scores from for this score to score comparison? I ask because I'll assume that your lender is one of the two. If the other was purchased from a service (other than anything offers), then you might be comparing a non-FICO score with a FICO, which can easily produce a double or even triple digit difference in score. If the 2nd came from a creditor, like from a CC approval, then know that they don't always use a FICO and when they do, they sometimes use a CC-enhanced FICO which can skew your results too.


FICO doesn't care if your loan was $0 down or 99% down. In fact, FICO largely ignore the balance on installment loans, otherwise we'd all get dinged for adding a mortgage or car.


It is possible to lose points when adding any new account including a mortgage. FICO will ding you for adding any new account because it's recent, but any ding will fade over a relatively short period of time. Usually before one year you can't see any impact.


FICO ignores your income and assets. That's a good thing. Warren Buffett has an equal shot at a high score as you do. FICO looks at your risk potential based on accounts you add, your history, and payment patterns. Because income is ignores, DTI isn't a part of FICO scoring, though lenders look at it.

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