Mortgage credit is the most difficult type of credit to qualify for; being approved for mortgage credit will increase a mortgagor's score much more than other loans. Once a borrower gets approved for a mortgage and their account ages, (about 6 months to a year on your credit profile) it can lead to a substantial increase in their credit scores. Mortgage credit also adds to an individual's variety of credit which accounts for a portion of their credit score. With a nice variety of credit a score will increase because it reflects the individual’s ability to juggle varied types of credit.
After being approved for a mortgage loan, it is important to keep in mind that opening other accounts too soon may drop credit scores substantially. In the eyes of a lender, opening multiple new accounts (within the same year) is considered high risk behavior, especially if a borrower has minimal experience juggling accounts simultaneously.
Being late on a mortgage can also drop scores significantly and take many years for recovery. A 30 day late payment on a mortgage can drop credit scores by 100’s of points and take up to 3 years to naturally recover. A 90 day late payment can drop scores even more and take up to 7 years to naturally recover.
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