How long after buying a house does your credit score go up?

A mortgage is probably the longest debt anyone will be taking on in their credit journey. As is the case with any new credit account, the first thing that happens when you apply for a home loan is that your credit score drops because of a hard inquiry, and because the length of your credit history changes. This is temporary and your credit score recovers soon after you continue making on-time payments that are reported to the credit bureaus.

The main reason a mortgage loan helps your credit score is because, unlike a credit card balance, a home loan is an installment loan. You make monthly payments of the same amount, until a certain date, and eventually, the debt is cleared. Also, a mortgage loan adds to your credit mix which makes up 10% of your credit score. As an installment loan, along with your credit card account, the mortgage loan becomes a different type of credit account. This diversity increases further if there are also student or auto loans you’re paying off already.

It might take as much as five months to recover from the credit score dip from buying a house, provided all other factors remain consistent.