Bought a house, credit now wrecked?

[MostlyCloudy]

So I purchased a house with a credit score of 740, and decided to check my credit score again for a new car purchase, only to discover it dropped 100 points to 640. I guess this is somewhat standard since my debt just quintoupled over night? The question is, will this adjust through common sense? Or am I going to have a sub 700 score forever now until I pay off half my house or other drastic measures to have a more appropriate debt:income ratio?

[roniram]

I highly doubt your credit is wracked based on the purchase of a new home.  What is your overall credit profile look like?  Credit scores are based on your overall credit profile, so if you don't have much credit, then this may be one of the reasons why your score dropped.  Also, are you comparing score to score? (i.e. are you comparing your EX FICO at one point to your EX FICO at another?) Because FICO scores can vary from one type of score to another.  Also, FAKO score can be wildly different from your FICO scores. 

If the same score did drop, I wouldn't worry.  The biggest drops are based on late payments, collections and bankruptcies, and they are more permanent.  You may have to expand your credit profile in order for the system to recognize you are less of a credit risk.  If you were a 740 before, you didn't have poor credit in the first place, and you don't now just because you bought a house.

[MostlyCloudy]

Ok hmm... After the house I opened up a new credit card for $10,000 and maxed it out buying furniture and stuff to earn points. Maybe thats what sunk me. A coworker told me my credit would be kinda screwed for awhile as a result of the new home but I wasnt sure I believed that. I'll get to work paying off this new card and see if that suddenly restores my credit back to normal status even with the new house (which I've had for 6 months now).

PS all my scores were obtained from here, so they are real FICO scores.

[Anonymous]

A maxed out card will hurt your score a lot more than a new installment loan. Credit card utilization, both overall and per card, significantly impacts score. It's not a long term concern though. As you pay down your card balances, your score will go back up.

[gdale6]

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@MostlyCloudy wrote:

Ok hmm... After the house I opened up a new credit card for $10,000 and maxed it out buying furniture and stuff to earn points. Maybe thats what sunk me. A coworker told me my credit would be kinda screwed for awhile as a result of the new home but I wasnt sure I believed that. I'll get to work paying off this new card and see if that suddenly restores my credit back to normal status even with the new house (which I've had for 6 months now).

PS all my scores were obtained from here, so they are real FICO scores.

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Your score drop is right there in what you have said. "I maxed out a new card" You most likely lost a few points for the new mortgage which you will recover pretty quick with on time payments.

[ezdriver]

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@MostlyCloudy wrote:

So I purchased a house with a credit score of 740, and decided to check my credit score again for a new car purchase, only to discover it dropped 100 points to 640. I guess this is somewhat standard since my debt just quintoupled over night? The question is, will this adjust through common sense? Or am I going to have a sub 700 score forever now until I pay off half my house or other drastic measures to have a more appropriate debt:income ratio?

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What is the source of that score that supposedly represent a 100 point drop? I'm betting it's a source that provide you with useless scores. Adding a home mortgage to your credit profile will not drop one's scores like that.

[MostlyCloudy]

The source was from this very site, real FICO scores.

[roniram]

It's most likely the maxed out credit card like Dale6 says. Once you pay it down below 30 percent, I'm sure your credit score will improve greatly.

[CreditGuy03]

Whoa! Maxed out card close to 10k? Ouch. 

You wouldve been better getting a line of credit or a signature loan . Id get a loan just to pay this down asap

[fishbjc]

That maxed out card is a killer.  The new mortgage?  Not so much, and that score will recover quickly!

Get that card down to 30% and optimally around 9%.