Can My Mortgage Affect My Credit Score?

Mortgage

Before you were approved for your mortgage, your credit score was an important factor that your lender considered when making the decision to extend you credit. Once you have your mortgage, it becomes an important component of your credit history, credit report, and ultimately your credit score.

If you are like most people, your mortgage is the largest debt you have, and it will affect your credit score for as long as it appears on your credit report. Unlike rent payments, which might not be included in your credit history and credit report, your mortgage is routinely included in your credit history and becomes part of your credit report and credit score.

When you first get your mortgage, you may see your credit score temporarily drop a bit as a result of the credit inquiry and the increase in your overall debt. Making your mortgage payments in full and on time proves your ability and willingness to pay back the loan and helps to increase your credit score. Over time, your history of on-time mortgage payments, combined with responsible use of your other credit accounts (such as charge cards and auto loans), can be very beneficial to your credit score.

Making late payments or missing mortgage payments, even if it happens just once, can negatively impact your credit score and could affect your ability to qualify for new credit. Late payments remain on your credit report for seven years and recent late payments can affect your score more. If you think you might miss a payment or you realize you already missed a payment, it’s important to contact your lender right away to explain your situation and develop a plan to bring your account current as soon as possible. The sooner you pay the past due amount and bring your account up to date, the sooner your credit score can start to recover.

More Learning

Common Phone Scams on the Increase

Since the beginning of 2022, there has been a substantial increase in scams targeting unsuspecting victims through fake phone calls, text messages or emails.

Banking 101: What is FDIC Insurance?

FDIC Insurance protects bank depositors against the loss of their insured deposits in the event that an FDIC-insured bank or savings association fails.

Banking 101: What is a Money Market Account?

A Money Market Account (sometimes referred to as a Money Market Demand Account or MMDA) is an interest-bearing savings account which also has features of a checking account.

Leaving Site Confirmation