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Home Loan and Credit Worthiness

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I'm slated to close on my first house this month (just wrapping up the conditionals now) and after closing, there are some things I need (lawn care equipment, lights) and was thinking of opening a Lowe's CC to get. However, am I better to wait from a credit line standpoint to have my mortgage report on my credit reports or do I app after buying the house? FICO 08 scores are 761 EX - 747 TU - 741 EQ

 

I'm not looking to max out this card, but I don't want to app and get approved for 3k and then be at like 50% utilization after these purchases. So if it means sucking it up for a month and waiting for my mortgage to report, I'll do it.

 

Thanks

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i've purchased numerous properties over the years, and it still amazed me how quickly the lenders get that new TL on all the CRAs (seems like just a few days). Considering it's more than likely going to represent your single greatest line of credit, it makes sense that it typically happens quickly.

 

...i don't think you're going to have to wait very long. :wave:

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If the company that originated your loan is holding it in its own portfolio it could report pretty quickly. Most mortgages, however, are originated by one company and then sold to an investor (like one of the GSEs). Those can take 2-3 months or longer to show up on your reports.

 

With scores in the mid-7s you obviously have a pretty clean profile, so it isn't going to matter much if you have a mortgage reporting or not.

 

Credit profile is a separate concept from a credit score, but you can see the effect of going from 0 to 1 installment loan (also a mortgage) on my FICO 08 here. Obviously the impact will vary based on the rest of a person's report.

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This is a ymmv. My loan I got in early Dec 2014 reported by mid Dec. The loan was sold to FHLMC (a GSE) but my bank retained the servicing right as usual. It's my bank not FHLMC that reports so I don't think the sale held up replying at all.

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This is a ymmv. My loan I got in early Dec 2014 reported by mid Dec. The loan was sold to FHLMC (a GSE) but my bank retained the servicing right as usual. It's my bank not FHLMC that reports so I don't think the sale held up replying at all.

 

This is better stated than my response above. It's really about where your servicing ends up, not your loan. The entity that takes your payments is who reports.

 

All of the mortgages I've had have been originated by one company, and then the loan and the servicing have both been transferred/sold elsewhere, either immediately or within a few months. The place that did our Mudland Manor mortgage said that they intended to keep the servicing, but they ended up selling it after we'd made only the first few payments.

 

I've never had a mortgage report immediately. Some CUs keep both the mortgage and the servicing (especially on ARM products). Presumably those could report pretty quickly.

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If the company that originated your loan is holding it in its own portfolio it could report pretty quickly. Most mortgages, however, are originated by one company and then sold to an investor (like one of the GSEs). Those can take 2-3 months or longer to show up on your reports.

 

With scores in the mid-7s you obviously have a pretty clean profile, so it isn't going to matter much if you have a mortgage reporting or not.

 

Credit profile is a separate concept from a credit score, but you can see the effect of going from 0 to 1 installment loan (also a mortgage) on my FICO 08 here. Obviously the impact will vary based on the rest of a person's report.

So the does/can the score impact from the mortgage recover quickly?

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If the company that originated your loan is holding it in its own portfolio it could report pretty quickly. Most mortgages, however, are originated by one company and then sold to an investor (like one of the GSEs). Those can take 2-3 months or longer to show up on your reports.

 

With scores in the mid-7s you obviously have a pretty clean profile, so it isn't going to matter much if you have a mortgage reporting or not.

 

Credit profile is a separate concept from a credit score, but you can see the effect of going from 0 to 1 installment loan (also a mortgage) on my FICO 08 here. Obviously the impact will vary based on the rest of a person's report.

So the does/can the score impact from the mortgage recover quickly?

 

 

The impact of the new mortgage on my 08 was +5.

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If the company that originated your loan is holding it in its own portfolio it could report pretty quickly. Most mortgages, however, are originated by one company and then sold to an investor (like one of the GSEs). Those can take 2-3 months or longer to show up on your reports.

 

With scores in the mid-7s you obviously have a pretty clean profile, so it isn't going to matter much if you have a mortgage reporting or not.

 

Credit profile is a separate concept from a credit score, but you can see the effect of going from 0 to 1 installment loan (also a mortgage) on my FICO 08 here. Obviously the impact will vary based on the rest of a person's report.

So the does/can the score impact from the mortgage recover quickly?

 

 

The impact of the new mortgage on my 08 was +5.

 

Well i that case.....good.

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If the company that originated your loan is holding it in its own portfolio it could report pretty quickly. Most mortgages, however, are originated by one company and then sold to an investor (like one of the GSEs). Those can take 2-3 months or longer to show up on your reports.

 

With scores in the mid-7s you obviously have a pretty clean profile, so it isn't going to matter much if you have a mortgage reporting or not.

 

Credit profile is a separate concept from a credit score, but you can see the effect of going from 0 to 1 installment loan (also a mortgage) on my FICO 08 here. Obviously the impact will vary based on the rest of a person's report.

So the does/can the score impact from the mortgage recover quickly?

 

 

The impact of the new mortgage on my 08 was +5.

 

Well i that case.....good.

 

 

This is one example I like to cite when people ask about getting an installment loan to help their scores. Doesn't do much. It's definitely NOT worth paying interest just "help" your credit score. We certainly didn't borrow the money in order to squeeze five more points out of our FICO 08s. :D

 

A lot of people weigh the "score factors" that they see next to their FICO scores equally. The "mix of credit" score factor doesn't impact your common 08 score much one way or the other, yet they often pursue this with the same (or greater) zeal as getting utilization under control. THAT matters a LOT.

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Do you think that a current or past history of an installment loan can be be beneficial for the FICO 04 score?

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Funny how mortgages are done these days, usually through brokers who sell them to be packaged up in MBS. My first two mortgages date back to the 70's and the mortgage stayed with the S&L that made it. My last mortgage was a cosign/co-owner and it went to a gse and took several months to report. After a few years I re-fied the other owner's stake and paid off the mortgage. That also took almost three months to report. For several months it just wasn't updated then it was changed to paid. Funny thing is that I never saw much of a change in my FICO scores prior, during, or post mortgage.

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Do you think that a current or past history of an installment loan can be be beneficial for the FICO 04 score?

 

I don't know. My guess would be no.

 

They might help more for scores that are optimized for other installment loans, like an auto-enhanced score. I don't know this for sure, either, though.

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Recon. My score isn't as good as yours and I got approved online for $3k. I called the next day and asked for $25k and got it.

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I'm slated to close on my first house this month (just wrapping up the conditionals now) and after closing, there are some things I need (lawn care equipment, lights) and was thinking of opening a Lowe's CC to get. However, am I better to wait from a credit line standpoint to have my mortgage report on my credit reports or do I app after buying the house? FICO 08 scores are 761 EX - 747 TU - 741 EQ

 

I'm not looking to max out this card, but I don't want to app and get approved for 3k and then be at like 50% utilization after these purchases. So if it means sucking it up for a month and waiting for my mortgage to report, I'll do it.

 

Thanks

Of course don't do anything until AFTER you close. They will check your credit again right up to the closing. No new accounts, no balances going up on new cards, no surprises!! I have seen to many closings halted because someone opened a new line of credit, or used their card to move across state, or whatever the reason(s).

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