10 Apr Will buying a second home hurt our credit score?

Q. We are thinking of buying a second home that we would rent out. We would get a large mortgage. We have high credit scores of 800+ but with a new big mortgage, we would owe more debt, obviously. But will it hurt our credit score if we always make the payments on time? Is there something we should do to make sure our scores don’t go down?
— Homebuyer, maybe

A. This is an exciting venture!

It is wise to consider your credit score before making the purchase.

The debt-to-income ratio (DTI) can affect your credit score and is of high importance to lenders, said Jody D’Agostini, a certified financial planner with The Falcon Financial Group in Morristown.

It could possibly be offset by the projected income from the property, she said.

“The offset is typically 75% of the rental income as they account for vacancies over time,” she said. “If the DTI gets too high, this could hurt your ability to borrow for other goals and/or may cause you to pay a higher interest rate on that new debt.”

If you pay the mortgage on time or early each month, this can help elevate your score and it will increase over time, D’Agostini said. It is especially important to be prompt with your payment because it repair any damage to your score.

When you apply for the new mortgage, there can be a dip of 5 to 20 points, but it should be repaired quickly, she said.

D’Agostini said there are things you can do to mitigate the risk to your credit score.

“Make sure to pay all debt on time. Try not to carry high credit card debt and keep that debt below 50% of available credit,” she said. “Also, try to keep your DTI at a reasonable level. Over time, if you practice this, your credit should improve back and could go up.”

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This story was originally published in April 2026. 

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.