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blatraterlit

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Own or rent? Which is better for your credit rating?
I would like to know which is better for your credit rating overall. Is it better to have a $105,000 mortgage or is it better to rent? If I rent I won't have $105,000 house loan anymore and that would improve my debt:income ratio. But on the other hand does having a mortgage show more stability?

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Better to have the mortgage, because your rental payments do not show up on your credit report.  Also, any time you close out an account (such as a mortgage, credit card or auto loan) your score drops because you've lost a line of credit, and you've lost that credit history.    Your debt-to-income ratio is not part of your credit score.

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Thank you, but...

Oh ok, that makes sense. But wouldn't owing less money help my credit rating overall anyway? I ask because I disagree a little on the part about saying that debt-to-income ratio doesn't affect my credit. I tried to refinance my 6.75% mortgage loan and I kept getting turned down because of my ratio; which was why I was trying to refinance in the first place. I even tried a loan modification but because I wasn't behind on my payments no one would help me lower my interest rate. Seems you can't get help if you aren't delinquent.

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