Question:

How does mortgage payment history affect credit?

Answer:

Rental and/or mortgage payment history have significant influence on your credit rating. Also, the way you have met your housing expenses so far is the way lenders will assess your credibility as a consumer.

Even more - since your mortgage is a long-term secured debt it has greater weight than non-secured short term debt. True, setting up small debt obligations and paying them on time helps build credit. However, nothing destroys credit faster than failure to make rental and especially mortgage payments on time.

At the same time, managing to pay mortgage on time does build up credit and improves your trustworthiness as a borrower. By keeping your mortgage payment history in order, you will sooner or later be able to qualify for more house due to high credit and equity built in your home.

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