Saving / Running / Finance / Home / Money

My credit score dropped 11 points when I bought a house, but I'm confident the mortgage will actually boost my credit in the long run

Posted On: 25 May 2020   |   Posted By: Business Insider

My credit score dropped 11 points when I bought a house, but I'm confident the mortgage will actually boost my credit in the long run

After closing on a mortgage to buy a house, my score dropped by 11 points, but I'm not too worried, because I understand why my score dropped and how a home loan could actually improve my credit in the long run.
Before approving me for my mortgage, my lender did two hard pulls on my credit, which lowered my credit score by about two points each time.
My home loan also increases my total debt, which increased my credit utilization ratio. This ratio accounts for 30% of my FICO score, and a lower credit utilization is better.
As long as I make on-time payments on my mortgage, my credit score could actually get even higher in the long run. Having a mortgage also improves my credit mix, which can positively impact my score.
Personal Finance Insider's email newsletter is coming soon! Sign up here »
During the two years I spent preparing to buy a house, aside from saving up money towards my down payment, I also knew that I had to start babying my credit score. I made a point of making all my payments on time and...

Continue reading ...

 






The last Posts from Business Insider



Naya Rivera tributes from Glee stars as she's confirmed dead

Naya Rivera tributes from Glee stars as she's confirmed dead

Tributes to former Glee star Naya Rivera are flooding in after she's confirmed dead six days after going missing on Lake Piru Read more ...

Man Utd boss Ole Gunnar Solskjaer delivers verdict on ‘nasty' Oriol Romeu...

Man Utd boss Ole Gunnar Solskjaer delivers verdict on ‘nasty' Oriol Romeu challenge on Mason Greenwood

Ole Gunnar Solskjaer was left with plenty to ponder after Manchester United's draw with Southampton Manchester United manager Ole Gunnar Solskjaer was far from impressed with... Read more ...

Man Utd player ratings as Rashford and Martial both net in Southampton draw

Man Utd player ratings as Rashford and Martial both net in Southampton draw

Marcus Rashford and Anthony Martial were on target but Manchester United's Champions League hopes suffered a blow as Southampton snatched a last-gasp draw at Old Trafford Read more ...

Face coverings to be made compulsory in shops in England from next week

Face coverings to be made compulsory in shops in England from next week

Wearing face coverings in shops and supermarkets will be made mandatory in England this month, No 10 has announced. From July 24, anyone who does not comply could face a fine... Read more ...

China's new national security law in Hong Kong is a gut punch to the city's...

China's new national security law in Hong Kong is a gut punch to the city's freedoms. It could mark the end of Hong Kong as we know it

The new national security law in Hong Kong passed last month has wide-reaching consequences for the future of the city. The new law, unilaterally imposed by China, bans all... Read more ...

Tamera Mowry Announces She's Leaving The Real After 7 Years

Tamera Mowry Announces She's Leaving The Real After 7 Years

Tamera Mowry is breaking her silence over some important news. The actress and television host took to social media on Monday afternoon to share that she's leaving The Real... Read more ...

Naya Rivera's body found 7 years to the day after co-star Cory Monteith's death

Naya Rivera's body found 7 years to the day after co-star Cory Monteith's death

Cory Monteith was 31-years-old when he was found dead in a Canadian hotel room on 13 July 2013. Naya Rivera was 33-years-old when her body was recovered from a lake in... Read more ...

Glee's Jane Lynch pays tribute to Naya Rivera as body is found during Lake...

Glee's Jane Lynch pays tribute to Naya Rivera as body is found during Lake Piru search

Glee actress Jane Lynch has paid tribute to co-star Naya Rivera as a body is found in search for missing actress Glee star Jane Lynch has paid tribute to co-star Naya Rivera... Read more ...

Princess Love Requests to Dismiss Her Divorce From Ray J

Princess Love Requests to Dismiss Her Divorce From Ray J

UPDATE: And just like that, Ray J and Princess Love appear to have reconciled. The Love & Hip Hop star filed a request to dismiss her divorce filing earlier this month, court... Read more ...

Cheeky Gareth Bale appears to hit back at Real Madrid fans and Spanish press...

Cheeky Gareth Bale appears to hit back at Real Madrid fans and Spanish press with binoculars gesture

Gareth Bale risked further wrath from Real Madrid fans after appearing to make a 'binoculars' gesture on the bench during his side's 2-1 win at Granada. Read more ...