Does Investing Lower FICO Score?
I've been hearing lately that REI can lower one's FICO scores. After thinking a bit about it, I can see how maybe this could happen to someone like myself who wants to hold rentals and therefore has an increasing mortgage debt.
Is this true, and how can one invest without lowering the score?
if you get your rentals paid off quick. that will raise your score. also from what i know, installment loans don't lower your score as much as revolving credit does. investing will lower your credit, but it won't matter much once you get started.. you'll be using a lot of cash. unless you do some no money down...
[addsig]
From what I have heard a pull might be 3 points reduced from your score.But that does not mean neccessarily that every pull will be 3 points.Usually if there are say 3 pulls in a month for finding your score for your score for mortgages then the score does not go down by 9 ****Must Reach Senior Investor status before posting URL's***here is a few factors which determine the reduction in the score.
Also lets look at it this way,if you have say 20 pulls against your credit for real estate related and your score goes down...on the other side you might also have a few hundred thousands worth of mortgages which you are repaying and so your score goes up too.
When you have a lot of hits against your score,enroll for a credit service over the net where you can view your credit report and you can write letters to take some of the hits off your credit based on what you see
I know of an Investment Group that does nothing but Sub Prime Sub Sub prime loans.
But they also have Investor programs where there is no limit to the number of loans you can get..
In the short term it will lower your score. Since you will be taking on a new large loan this will lower your score.
The longer you have this loan the higher your score will go.
But everytime you you add a loan you will take a hit.
The hits come quick and the effect of payment history comes slowly.
So to answer your question YES and NO or It depends.
MariaAZ,
YES....being a REI...does lower scores...
That being said:
Holding alot of properties...as long as YOU are current and on time...a PLUS
Trying to buy more REI without Control of YourLoanBroker can be a DISASTER with INQUIRIES and SHOPPING LOANS...
You have to hold them at BAY!!!
This is what I do....If I need to!!...
I subscribe to a service, getting my CreditReports, from the three reporting companies without gettig hit with an Inquiry....if "I" pull my report ....no effect on MyScore...
....if I am looking for a NEW LOAN...
...I sit in their office and have THEM pull my reports with my passwords....
HENCE...NoEffectToMyScore....
....as always,
GoodInvesting, Rocky