Does buying a house affect your credit?

My husband and I bought a house and got a great fixed rate. Shortly after, I wanted to buy a new car and the bank offered us 13% interest. We%26#039;ve financed 4 vehicles with the same bank and got 5.2%. How does that work?

Does buying a house affect your credit?payment calculator

It may help to know what makes up your score before I answer, so here it is:

1. 35% payment history

2. 30% debt : income

3. 15% length of time establishing credit

4. 10% types of accounts

5. 10% inquiries and new accts : established accts

Initially, when you finance a house the note will directly affect #2 which will temporarily bring your score down becuase naturally have more debt than you did before you got the house. It takes anywhere from 6 months to a year for the mortgage to truly reflect on your credit so #1 and #4 would be affected in this case. Your score will go up, but it takes time for the account to report enough to level it off.

Does buying a house affect your credit?

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Your debt to income ratio is probably different, and your risk is now higher.|||Buying a house greatly increases your debt to income ratio. Still, going from 5 to 13% seems pretty drastic if you are making all your payments on time. Shop around for a better auto loan, or wait a while longer so the good payment history shows up more.|||Keep searching there are better deals out there, you just have to find them and as long as your credit rating is good you should have NO problem getting one of them, if you buy a used car the financing may be at a little higher rate.

Talk to the head loan officer if you have had no credit problems since the last purchase and see if they can%26#039;t reconsider ? It has and can be negotiated.

If not search elswhere!|||I%26#039;d suggest getting your annual free credit report. This is a new law that passed last year. There may be something on there that is affecting your credit score. How did you pay those car loans? Not all mortgage companies report to the credit bureau. You%26#039;ll see if yours does by getting that report. A mortgage usually makes you a better risk because it shows stability. But as a previous contributor has correctly stated, if you purchased %26quot;too much%26quot; house, your DTI could be too high.|||When was the last time you bought a car? Interest rates have increased in the last 3 years on all types on loans.|||Double check if you credit score has dropped for some other reason.

But no, normally if anything home ownership should improve your credit score. I am guessing that the reason would be that the bank feels you have overextended yourself in your current mortgage so they view you as a higher risk.