Did selling my house really lower my credit score?

What is a credit score?

A credit score is a number between 300 and 850 that measures your credit. A good credit score can lead to lower interest rates on loans while bad scores make it difficult to get approved for new lines of financing.

This helps individuals, businesses, banks, and others determine how likely an individual will repay their debts in the future. Credit reporting agencies like Equifax use this information to generate what's called a "credit report." The three major consumer reports are TransUnion, Experian (formerly known as TRW), and Equifax. These companies track everything from personal identity theft inquiries about you down to late payments on your utility bills or student loan accounts. You're assigned one overall rating by these companies based on your credit history, which can greatly affect your ability to get a loan or a good interest rate.



A higher score not only means you're more likely to be approved for financing and loans but it also reflects well on the lenders who gave those loans out in the first place.

Why does your credit score matter when you're buying or selling a home?

Your credit score is a measure of your ability to repay debt. Lenders, such as mortgage lenders or landlords, will use this information when deciding if they want you to purchase their product or lease from them.

Generally speaking, the higher your credit rating (the lower risk), the better off you'll be in terms of rates and fees.

You can read more about how important it is for individuals with bad credit scores to work on improving that here: How To Improve A Bad Credit Score?

What does selling my house do? Selling a home lowers your available equity because you're subtracting what's owed on the property - which usually includes taxes and mortgage payments – from its value.

Lowering your overall available equity can also lower your credit score.

Why does that matter? Lenders use information from two of the three major credit bureaus to calculate an individual's credit score, and thus how risky they are as a borrower or renter. When someone sells their home, it decreases their available income (the third element used to determine risk) because they're no longer renting or making mortgage payments on the property.

Sell My House 7 helps homeowners looking to sell their home even if they have bad credit, receive a cash offer for their home.

How do I get my credit score back up after selling my house?

If you want to get your credit score back up after selling your house, then be sure not to rack up any new debt. The best way would be by paying off any outstanding balances on high-interest loans or unpaid balances from past purchases on the card (unless of course a balance is expected).

You could also call and arrange with creditors for regular payments that fit in with your budget. This will help improve your credit score over time until it reaches its previous level before selling the home.



Another technique you can use is opening another loan account and using only this one for future expenses to keep things simple. You should consider taking out a secured loan where they require collateral such as property if possible so you can use the same property for both accounts and only have to worry about one thing.