Financial experts constantly warn consumers to keep their credit scores in tip-top shape if they’re planning to purchase a home in the near future. But even after you have a mortgage, your credit score is affected going forward.

The higher your credit score, the more likely you are to get the 澳洲幸运5官方开奖结果体彩网:best mortgage rates. A mortgage calculator can show you💃 the impact that different rates can have on your monthly payment. Once you have a mortgage, making timely p♋ayments improves your credit score.

The Initial Credit Score Hit

Your credit score is a numerical representation of your ability to pay back a debt 澳洲幸运5官方开奖结果体彩网:obligation you've taken on, so you can eꦍxpect your credit to take a hit right after you get a ne🍃w mortgage. Your score will remain low until you consistently repay the loan. You've taken on the largest loan obligation that most consumers will ever have, and you must actually make the payments as promised.

This temporary lowering of your score may make it difficult for you to get other loans or at least to 澳洲幸运5官方开奖结果体彩网:get a loan with ideal credit terms. Plan to wait at least six months before applyi♐ng for any loan of si🃏gnificant size.

Making Payments on Time

Making on-time payments every month can bring your score back up to its pre-mortgage level. Don’t sign up for those services that say they can raise your credit score fast. Instead, look for reputable credit repair companies if you need a little guidance. In the meantime, make your mortgage and all other payments on time. Your score will naturally rise over time aꩵs you prove you’re a responsible borrower.

Pay your bills on time and in full. Set up automatic payments through your b💧ank or with creditors so you never forge﷽t if life gets a little busy.

Impact When Building Your Credit History

Your 澳洲幸运5官方开奖结果体彩网:credit report measures your ability to pay back debts. You only earn so much money, so keeping your debt proportionate to your income is essential. This is called your 澳洲幸运5官方开奖结果体彩网:debt-to-income ratio.

Keeping your ratio no higher than 36%, with no more than 28% going to your mortgage, is considered ideal. Don’t take on other debt obligations if you know you'll purchase a home soon so you can keep your debt-to-income ratio reasonably low.

That said, you do want to continue building your 澳洲幸运5官方开奖结果体彩网:credit history. A little credit is better than no credit, and paying your mortgage 🎀on time is good for your credit history. 

Missing Payments on Your Mortgage

The exact calculation of your credit score is a bit of a mystery. FICO publishes general guidelines to help consumers understand their scores, but nobody knows the specifics 😼of the calculation. However, the types of loans you have play a role in your score.

Your score won't be as high if your credit report contains only a bunch of credit card loans. A mix of revolving and installment debt, such as your mortgage, accounts for about 10% of your score. 

The effect on your score won't be massive if you pay a credit card a little late, but expect your credit score to reflect the misstep if you don’t make your mortgage payment on time. Make the payment as soon and quickly as possible if you miss one. Your mortgage company may not report it to the credit bureaus if your payment is just a little late.

The Bottom Line

Debt that you take on fo𒊎r a home is considered responsible debt𒉰 as long as you pay your mortgage on time every month. Try to avoid making any other major purchases within six months of taking on a mortgage because your credit score will likely drop from the process of getting the loan.

A history of responsibly paying your mortgage and other bills should 澳洲幸运5官方开奖结果体彩网:bring your score back up. However, credit repair companies may be able to undo some of the damage should unavoidable circum𓆏stances lead to mul🏅tiple late payments, further damaging your score.