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First time homebuyer. When I originally applied for financing on the house, my credit sat at a 751. After 4 months, we closed on the house and the company who funded the purchase noted that my credit had risen to a 793. They had me sign off acknowledging the change.

Note: I have a car loan that I have been paying off the entire time this home buying process has been going. I don't think the drop in amount owed on the loan would have shifted my debt/income ratio enough to merit such a huge change.

  • Age 22
  • Car Loan at time of Financing Application: 17k.
  • Car Loan at Closing:15k.
  • 100% on time payment history with Credit Cards.
  • Investing money in both 401k, IRA.

Why would this occur, and why would they have me sign off acknowledging the rise?

  • How long after closing did your score increase? Had the mortgage reported to your credit report yet? – TTT Nov 16 '17 at 19:14
  • I closed last week so I am un-aware if it increased after the close. I believe the mortgage had been reported. – Matt Crandall Nov 16 '17 at 19:16
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    "Why would this occur" The mortgage company probably told FICO that you're worth of a mortgage. "why would they have me sign off acknowledging the rise? Probably because there is a threshold in that range where the mortgage rate drops, and they don't want you coming back complaining about deserving a lower rate. – RonJohn Nov 16 '17 at 19:17
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    It makes sense that the score would go up after the mortgage reports, especially if you don't have that many other accounts in your report. And I agree with RonJohn, they probably asked you to sign off since the top tier rate was probably around 760 and you didn't make the cutoff until shortly after. You could try asking them to give you the better rate now, since you could theoretically refi now and get it anyway (though with fees that may not make it worth it). However, I think it's highly unlikely they can change it now that you've closed, but I suppose it doesn't hurt to ask... – TTT Nov 16 '17 at 19:34
  • Did you change your spending habits at all? If your credit utilization (percentage of credit limit being used) went down that might raise your score. – mkennedy Nov 16 '17 at 21:53
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Mortgage agreements usually have a clause in which the mortgagor warrants that all the statements and information which they have provided to the mortgagee are correct. In your case, this probably included your credit score. Since your "statement" concerning your credit score is no longer accurate, they want you to update the agreement with the new information before the final version is prepared.

Credit scores change for many random reasons. The agencies re-calibrate formulas constantly. It is unlikely that your mortgage negotiations affected your credit score. The bank will only start reporting the facts of mortgage to a credit agency when you start paying (or not paying) the loan. Credit agencies don't care whether you have a loan or not. They only care whether you have paid your debts, or not paid them.

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    The credit score often takes into consideration long term loans like car or house. It expects that most people have a car loan, and many have a home loan. The score formula figures that people with these loans are more fiscally responsible. – MikeP Nov 22 '17 at 21:09

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