If you’re a first-time home buyer, it is likely no one has told you about the serious hit your credit will take in the weeks following the sale. Although you need decent credit to buy a home, homeowners’ credit scores decline due to the significant amount of debt added to their report.
While each mortgage payment you make will help increase your score, it has been noted that the rate in which homeowners’ credit scores recovered heavily depended on where they live. New homeowners saw an overall decline between 15 and 40 points. On average, it took 11 months for their credit score to fully recover. If you are concerned about your credit recovery period, here are five cities where homeowners reported a faster recovery.
Richmond, Va. residents saw their credit scores decline by about 13 points after they took out a mortgage. It took between eight and nine months (266 days) for their credit scores to recover. The average credit score for homeowners in Virginia is 693.
The average credit score for homeowners in Minneapolis sits around 701. Overall, people who took out a mortgage saw a smaller decline than residents in Richmond (11 points). However, it takes one day longer, on average, for a homeowner’s score to fully recover.
Salt Lake City
Folks who buy a home in Salt Lake City tend to have a credit score around 704. After they take out a mortgage there is a decline of 15 points, on average and it takes about 272 days for their credit to recover.
Providence residents saw a 12-point drop after taking out a mortgage in the city. Most saw a full recovery in just 275 days though.
New Orleans is amongst the cities with the fastest recovery time as well. It takes just 280 days for a homeowners’ credit score to recover in the city.
Where Homeowners’ Credit Scores Recovered Slowest
You may notice that each of the cities listed above takes less than the average 11 months for a homeowner’s score to fully recover to their pre-mortgage rating. Not every city is like that though. In fact, credit score recovery may take over a year in some places. Here are the cities where homeowners’ credit scores have recovered the slowest.
- Riverside, Calif., 375 days.
- Austin, Texas – 377 days
- Milwaukee – 385 days
Readers, when you bought your home, how long did it take for your credit score to recover?