Did buying a house hurt your credit?

Anonymous · ‎02-11-2017

2 quick questions does buying a house hurt your credit? Can it hurt your credit? I know your score will take a hit from the inquiry but will recover. What are some common pitfuls new home buyers should avoid.

Thanks for the help.

Anonymous · ‎02-11-2017

Yes, it should drop your scores quite a bit. You're throwing in a big loan with 100% utilization. There's not much you can do about this other than a few years of very good behavior. If you have some cards to get while your credit is high, do it at least 6 months before adding a mortgage.

dragontears · ‎02-11-2017

I did not have my mortgage lower my score at all, (the inquies dropped it more than the new mortgage account), when I refi last year my score dropped when the mortgage reported closed (before the new one reported). So I guess it is a ymmv situation.

Revelate · ‎02-12-2017

FICO 8 it can be a penalty if you're at a pretty installment utilization metric already, otherwise it's just a new tradeline w/inquiry on all 3 bureaus, and might even be a small win if you have no other installment history at all. FICO 04/5 is a non-issue, no installment utilization metric there at all.

Frankly buying a house is more important by a large amount than any potential credit impact, so simply ignore what your credit does afterwards. FWIW it boosted my Vantage score up by a significant amount if one cares about such things.

People probably lose more points on average running up credit card balances for all the things they need for a new home, rather than the mortgage itself in the majority of cases.

Anonymous · ‎02-12-2017

@Revelate wrote:
FICO 8 it can be a penalty if you're at a pretty installment utilization metric already, otherwise it's just a new tradeline w/inquiry on all 3 bureaus, and might even be a small win if you have no other installment history at all. FICO 04/5 is a non-issue, no installment utilization metric there at all.

Frankly buying a house is more important by a large amount than any potential credit impact, so simply ignore what your credit does afterwards. FWIW it boosted my Vantage score up by a significant amount if one cares about such things.

People probably lose more points on average running up credit card balances for all the things they need for a new home, rather than the mortgage itself in the majority of cases.

Boom! I can't think of a reason to worry about stellar credit after my mortgage anyway since the mortgage is the end game. Good score for a refi in 5-7 years maybe?

Revelate · ‎02-12-2017

@Anonymous wrote:
@Revelate wrote:
FICO 8 it can be a penalty if you're at a pretty installment utilization metric already, otherwise it's just a new tradeline w/inquiry on all 3 bureaus, and might even be a small win if you have no other installment history at all. FICO 04/5 is a non-issue, no installment utilization metric there at all.

Frankly buying a house is more important by a large amount than any potential credit impact, so simply ignore what your credit does afterwards. FWIW it boosted my Vantage score up by a significant amount if one cares about such things.

People probably lose more points on average running up credit card balances for all the things they need for a new home, rather than the mortgage itself in the majority of cases.
Boom! I can't think of a reason to worry about stellar credit after my mortgage anyway since the mortgage is the end game. Good score for a refi in 5-7 years maybe?

Well, life is anything but predictable but in general you're right... suddenly I'm getting clean as I may be picking up my life and moving, again, 2.5 years after getting my mortgage.

Anonymous · ‎02-13-2017

Aside from what others have said, I ended up having a LOT of hard pulls on my credit right after buying a house. Everything seemed to require a credit check: alarm company, pest control services, gas, electric, cable and Internet all required a check before setting up services at my new house. Not to mention my utilization went way up with all the added costs of homeowners, plumbers, buying window coverings, etc etc. Be prepared for a big hit and just know that it's for a worthwhile reason. Best of luck

Anonymous · ‎02-14-2017

Thank you for this information. How much of a hit is it 20pts 50pts?

Anonymous · ‎02-14-2017

@Anonymous wrote:
Aside from what others have said, I ended up having a LOT of hard pulls on my credit right after buying a house. Everything seemed to require a credit check: alarm company, pest control services, gas, electric, cable and Internet all required a check before setting up services at my new house. Not to mention my utilization went way up with all the added costs of homeowners, plumbers, buying window coverings, etc etc. Be prepared for a big hit and just know that it's for a worthwhile reason. Best of luck

Wow! Most of those people you should have said "NO" to. They can cause you damage if they have your social security number. Gas and electric, you might be stuck complying with whatever goofy rules they have but you can shop all of the other services on that list. None of those people are giving you credit so they can stay the heck out of your credit file!

Anonymous · ‎02-14-2017

As a recent homeowner, I was curious about this question as well since I was planning on purchasing a car soon after. I sold my last car for the down payment, and have been sharing my wife's car in the meantime to get to work, which isn't exactly the most convenient. After a bit of research and some additional thought, I think I am better off purchasing now rather than later. Seems like there is more of a chance for credit to go down, but we'll see.