{"id":355540,"date":"2017-11-06T17:00:31","date_gmt":"2017-11-07T00:00:31","guid":{"rendered":"https:\/\/www.creditrepair.com\/blog\/?p=355540"},"modified":"2022-03-31T18:05:37","modified_gmt":"2022-04-01T00:05:37","slug":"will-buying-a-home-affect-my-credit","status":"publish","type":"post","link":"https:\/\/www.creditrepair.com\/blog\/mortgage-and-housing-information\/will-buying-a-home-affect-my-credit\/","title":{"rendered":"Will Buying a Home Affect My Credit?"},"content":{"rendered":"

\"home<\/p>\n

If you\u2019re looking to buy a home, you may be wondering if acquiring a mortgage will have an impact on your credit. The short answer is, yes. Because mortgages are typically large loans, buying a home will affect your credit. There may even be a temporary negative impact to your score as you take on this high amount of debt. Furthermore, applying for any large loan affects your credit score because there are typically several credit inquiries involved throughout the process. But while the initial impact is negative, usually it\u2019s only temporary. With good payment habits, buying a home will ultimately be a huge benefit to your credit score.<\/p>\n

Let\u2019s look at the ways your credit changes during the home-buying process, both when applying for a mortgage and after you\u2019re approved.<\/p>\n

During the lending process<\/h2>\n

The more new credit you apply for, the more it\u2019s reflected in your score. Applying for a mortgage is no exception. Each mortgage application you submit results in an inquiry, or a \u201ccredit check,\u201d which strikes a few points off of your score.<\/p>\n

However, one of the basic steps of buying a home is talking to multiple lenders to get the best interest rates. To secure the best rate, you\u2019ll want take some time to clean up your credit report before you begin shopping for a mortgage<\/a>. Once that\u2019s in order, doing a side-by-side comparison of several rate estimates will give you the most negotiating power with lenders, helping to ensure you\u2019re getting a great deal.<\/p>\n

If can seem contradictory to search for the best rate and also have to worry about your credit score dropping due to inquiries. But this is only a short-term negative that results from the process, and in the end, it\u2019s a worthy trade-off to secure the lowest mortgage interest rate<\/a> possible.<\/p>\n

Fortunately, there are allowances for home buyers who rate shop. Investopedia relays this advice from Fair Isaac Corp., originator of the well-known FICO credit scoring model: you can apply to several mortgage lenders<\/a> during a 30-day period and not unduly hurt your score. That\u2019s because all of those applications essentially count as one inquiry. Your score won\u2019t suffer multiple dings from multiple inquiries as it would in other scenarios because the credit bureaus understand that they\u2019re all related to one purchase.<\/p>\n

If you still have concerns, do some market research before approaching lenders to find out what makes a good deal in the current real estate market. You\u2019ll be armed with accurate information and be able to submit only the two or three applications that feel the most promising.<\/p>\n

After the lending process<\/h2>\n

Once you\u2019re approved for a mortgage, the temporary negative hit to your credit score can be remedied fairly quickly. There will also be several key positive impacts<\/a> to your credit after buying your home including:<\/p>\n