Your mortgage credit rating can change your life. Taking on a mortgage is a big step. It gives you the freedom to own your own home, and allows you to have one of the most important assets a person can have. When you applied for a home loan, the lender checked your credit rating. Since you were able to obtain the mortgage it means your credit was good or even great. However, when you take on a mortgage, you’re also taking on a mortgage credit rating.
Can having a mortgage hinder your credit score?
When you get a mortgage, your credit rating will take a dip. A credit score is a numerical value that represents your ability to pay back your debt obligations. Before taking on a mortgage, your debt may have consisted of credit cards, a line of credit or a car loan. You were able to pay these back on a monthly basis, leaving you with a decent credit score. However, now that you have a mortgage, your credit score will drop until you start making payments on your home loan. Your mortgage credit rating will eventually go back up once you can prove that you won’t be derelict on your mortgage and are consistently able to make payments.
Can you apply for other loans when your mortgage credit rating is low?
The lowering of your credit score is temporary, so it’s best to wait at least six months before applying for another loan. Give your mortgage credit score a chance to heal from this short-term bruising before attempting to take on more debt. Once your credit score is repaired, you should have no trouble being approved for other loans of significant size.
Can you speed up your credit repair?
The best way to repair your mortgage credit rating is to pay your bills on time. If you don’t default on mortgage payments you’ll see your credit score rise. Late or missed mortgage payments will cause your credit score to drop even lower. Unfortunately, you can’t speed up the process, but you can expect that within six months of paying your bills and debt on time your mortgage credit rating will be repaired. All you need to do is prove that you’re a responsible homeowner who is capable of handling a mortgage, revolving credit (credit cards) and other loans (car), and your credit score will get back to where it was when you applied for your mortgage.