NBFR: Buying a home & credit score

HisChamaoleGirl

We just purchased a home (yay!) and since then we received a letter in the mail and it states my "new" credit score since completing closing. My credit score has dropped significantly. Is this "normal" for a credit score to lower after a BIG purchase? Just curious if anyone has had any experience with this or if its a red flag? thanks!

Holly_1007

Every time someone pulls your credit score info it lowers your score.  did you shop around for banks/ mortgages? if so, then each time you did, they pulled your credit score and it lowered it.  I'm not sure about by how much

Also, when you have a major purchase like a home it affects your debt to income ratio, which would also lower your credit score due to having a mortgage...

xmaryrickx

Not when buying a house, no it is not normal. A mortgage should increase your credit score, usually significantly. Who sent this to you? I have never received anything in the mail with my credit score, unless requested it 

 

I guess it's possible that there would be a small drop at first bc of the bank activity on your report, but it should not be significant.  

fellesferie

Are you sure the mail is legitimate? Companies have to have your permission to pull your credit score, and I've never heard of a lender pulling it again after loan/mortgage papers are signed. 

xmaryrickx

holly71087:

Every time someone pulls your credit score info it lowers your score.  did you shop around for banks/ mortgages? if so, then each time you did, they pulled your credit score and it lowered it.  I'm not sure about by how much

Also, when you have a major purchase like a home it affects your debt to income ratio, which would also lower your credit score due to having a mortgage...

except the credit bureaus do not know your income. It makes you less likely overall to get financing/loans if you have a high debt to income, but that should not effect your credit score. 

Ginlyn0

I have heard of a credit score drop due to a new mortgage. The rational is because part of your credit score is based on utilization of your credit. Meaning you just took out a loan and are using 100% of allowable credit line because you haven't made any payments yet. I heard that the drop shouldn't last very long though because you being paying on the credit line and that drops your utilization. Also because it's a new line of credit.

This website is helpful: https://www.myfico.com/CreditEducation/WhatsInYourScore.aspx

However, I've never heard of someone just sending you your credit score without you requesting it.

Nineoceans

I'm surprised by the responses...yeah it is really common for a huge purchase like a house to wreck your credit for a bit. Your debt to income ratio goes from nothing (because you cant buy or do anything in the months leading up to closing) to a multiple hundred thousand dollar debt very suddenly. It will definitely impact your credit for awhile. As you start to pay it down though it starts to look like good payment history which helps boost your credit. Overall it's temporary but yeah I wouldn't try to go out and buy a car right away

HisChamaoleGirl

Thank you for the responses ladies. I took a closer look at the document and it was for a power bill that we had established for the home. They said "your security deposit amount is based on your credit score" and below that they included the score. That part seems legit. We have not made a payment on our mortgage, as it is not due for two more months, so thanks for pointing that factor out as well.