You are moving to a new home and starting fresh. The move itself is a lot of work, but once you are settled in, most people feel it was worth it. One question that does not always come up until later: does moving house affect your credit rating? And if the answer is yes, how?
Does moving house actually affect your credit rating?
Yes and no. There is no single answer because it depends on your situation and the choices you make during the moving process.
A plain change of address, by itself, does NOT affect your creditworthiness. But other things that tend to happen around a move can matter quite a bit.
It really does come down to the circumstances. Here is a look at what could make a difference in your credit score.
Which parts of moving can affect your credit?
Several things that happen during a move can push your credit score up or down. Knowing what they are ahead of time puts you in a better position to make good decisions for your finances.
Applying for Credit
Any time you apply for credit, or even just request a quote that triggers a hard inquiry, it can affect your score. That includes the mortgage you take out to buy the new place.
That is not automatically a bad thing. Taking out credit and paying it back responsibly is one of the most reliable ways to build a stronger score over time.
Where it gets problematic is when you open multiple lines of credit at the same time or run into trouble keeping up with payments. That kind of situation can drag your score down and take years to fully recover from.
Moving Costs
Even a modest move costs money. If you pay those costs out of your checking or savings account, your credit score is not affected.
If you put those costs on a credit card instead, it changes your credit utilization rate, which directly affects your score. The higher the balance relative to your credit limit, the more impact it has.
How to Protect Your Credit Score During a Move
Here are some concrete steps that can help you keep your credit in good shape through the process.
- Check the cost of living in your new area. Before you commit, take a real look at what your monthly expenses will be in the new location. Knowing you can comfortably cover your payments is the foundation of a healthy credit score.
- Use a tool to track your credit score. Services like Experian or Clearscore show you exactly where your accounts stand and can point out specific areas to work on based on your situation.
- Update your contact information everywhere. After you move, update your address with every account and credit provider you have. Missing a statement because it went to the old address is an easy way to miss a payment, and a missed payment shows up on your report.
- Get your credit in order before you move. Whether you are buying or renting, the stronger your credit is going in, the better the rates and terms you will qualify for. That makes the credit less expensive and easier to manage once you are in the new place.
The Short Version
Changing your registered address does not directly hurt your credit score. But several things that happen around a move, applying for new credit, putting costs on a card, missing a forwarded bill, can. Being proactive about what you spend, what you borrow, and keeping all your account information current is the straightforward way to come through a move with your finances intact.
If you are planning a move in the Tampa or Riverview area and want to talk through what your move would actually involve, give us a call at (813) 505-2560.
Sources and further reading:
- https://www.nerdwallet.com/article/finance/credit-score/moving-hurt-credit-score
- https://help.creditclub.com/hc/en-us/articles/115015605327-Why-has-my-Experian-Credit-Score-dropped-since-moving-house-
- https://www.experian.com/blogs/ask-experian/updating-the-mailing-address-on-your-credit-report/
- https://www.experian.com/blogs/ask-experian/is-now-a-good-time-to-move/
- https://support.creditkarma.com/s/article/What-happens-to-my-credit-scores-after-an-eviction
