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Lending Tree put out a study that says those who take out a mortgage had their scores drop on average 15 points immediately after and it takes up top five months to recover. 

Not exactly correct!!!

There are several problems with this study that are incorrect.

First, Lending Tree uses the Vantage Score - which is not used by lenders for loan approval. Why are they generating an article on a non-lender credit score model? FICO scores can sometimes increase after a mortgage is taken out. These other non-lender credit score models will go lower while the lender's FICO scores will increase. 

Second, Lending Tree says by adding a high balance, a credit score will automatically drop. Not true. FICO scores can actually increase when taking out a mortgage - if it is the initial loan in the credit report. There are also some other times when a FICO score will increase after taking out a mortgage.

Third, many new homebuyers will incur expenses when they purchase a new home. When these expenses are put on credit cards, such actions will lower FICO scores by raising the utilization ratio and adding more active accounts to the credit report.

This is not an accurate study - it is not tracking the lender's FICO scores and it is not identifying the impact from the increase in utilization ratios. Sorry Lending Tree!

You can read the following links:

The CNBC article

https://www.cnbc.com/2018/11/06/buying-a-house-can-depress-credit-scores-how-long-it-takes-to-recover.html

Lending Tree

https://www.lendingtree.com/home/mortgage/credit-score-recovery-after-buying-a-home/

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