mortgage changes score?

when i buy a new house and get a mortgage on it, does it effect my credit score?

Normally it drops you a few points initially but long term (with timely payments!) mortgages really strengthen your credit score.


Getting a mortgage effects your DTI ratios and you are temporarily dinged because you are taking on more debt (and therefore are being percieved as a higher risk).

As you demonstrate that you can handle this new debt burden (make your payments on time), your scores will not only return to what they once were, but in most cases, they will improve.


Scott Miller

mortgage only affects your dti if you dont have rental income associated with it. If you intend to mortgage the property for an investment and rental property then banks will take 70-75% of the rents towards the debt so if you have a decent ental you will effectively cancel out any dti associated with the property.

Your going to see an initial ding because of the inquiries… and may loose some point.

In general though, having a mortgage with a payment history will strengthen your credit, and increase your score.

Also, from those of us that see credit histories more often because we are in the lending communities… one of the factors that you will see that is given as a reason for a lower credit score is the absence of a mortgage liability…

Hope that this helps…