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Study: Buyers’ Credit Rebounds Quickly After Home Purchase

September 29, 2021

When you take out a mortgage, your credit score will take a hit. But a new study from LendingTree shows your credit score should rebound within a year.

Credit scores are unlikely to fall by more than 20 points, on average, in the four and a half to six months after getting a mortgage, the study shows. Even credit scores that fall by more than the average of 20 points usually rebound to pre-loan levels within a year.

After closing on a mortgage, credit scores took an average of 165 days to reach their lowest points. Average credit scores fell the fastest in Richmond, Va., taking about 137 days to hit its lowest point while San Jose, Calif., had the longest decline at an average of 189 days, the LendingTree study finds.

“The complete credit cycle—the time it takes for scores to decline and then rebound—is 339 days, on average,” the LendingTree study notes. “This means that borrowers across the country can typically expect their credit scores to return to their starting points in a little under a year.”

Some differences emerged among metro areas. Check out this breakdown of how credit scores are affected after getting a mortgage in the major metros.