Buying a new home can impact your credit score, but only if you take out a mortgage to help pay for it. If you pay cash for a home, your credit score will not be affected because you have not requested any new credit such as a mortgage, nor has your debt level changed.
Inquiries
When you apply for a mortgage, your potential lenders will pull your credit score as part of the loan application process, resulting in an inquiry on your credit report. This will lower your score. However, the FICO scoring model counts all mortgage inquiries within a 45-day period as one inquiry.
Debt Levels
When you take out a mortgage, you significantly increase the amount of money you owe. However, since you took out a mortgage, the impact will be smaller than increasing your unsecured debt levels, such as with credit cards.
Payment History
Over time, your credit score can rebound if you make timely payments for your mortgage. In addition, having a mortgage increases the types of credit you've used, which will help your credit score.
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