By SmartMoney Staff
Question: The common advice is to not open any new credit before applying for a mortgage. If I lease a car, how will it affect my credit score, and how much time should I allow before I try to buy a home?
– Ron Sim, Los Angeles
Answer: You might want to hold off on that new ride. In the world of FICO credit scores, leasing a car and getting a loan to buy one are treated the same way. “New credit implies a higher level of risk,” says Barry Paperno, the consumer operations manager for myFICO.com. Signing those lease forms means you’re essentially opening a new account, which can lower your credit score. And it could take up to a year to resuscitate your magic number assuming you pay all your bills on time.
For More Information:
- How to Lease a Car
- How to Check Your Credit
- 10 Reasons I’m Cancelling My Credit Cards
- The Credit Card Issuers That Keep You Safe
- What Your Credit Card Won’t Let You Buy
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