Credit Advice

Scores usually drop with new mortgages because of the hard inquiry(ies) you incurred to get the mortgage approved, and the new tradeline reporting, which lowers your Average Age of Accounts (AAoA). Most people recover the points lost (anywhere between 0 and 35+ some-odd points) within a few years or even sooner.

Typically, people who already have thick credit files with long histories will see less of an impact on their FICO than someone longer with a relatively short credit history.

Over time this impact on your scores will lessen as the loan to value ratio of your mortgage improves over time which makes you look better to other lenders, as long you make prompt timely payments.

Mortgages (and any other installment credit) factor in your credit applications in the future because those payments subtract from your stated income used to pay off any new loans or new credit card debt. These days obtaining a large mortgage can directly influence your standing with other creditors as a large mortgage impacts your ability to handle larger loan sizes. Large mortgage payments relative to your income can also influence what sort of credit limits you receive in the future even though the balance of the mortgage is being paid down (mortgage payments don't decrease over time). For example, a person with a stated income of $55K with a $350,000 mortgage balance will look unfavorable compared to an individual with $75K salary with a $140K mortgage.

In the long run, if your income keeps pace with inflation it will diminish the impact a mortgage payment has on your income. A long-standing mortgage with no late payments will enhance your FICO scores and improve your standing among other creditors, particularly mortgages that have long payment histories. This also also improves your AAoA.