About 2 years ago my brother convinced me to stop renting and start owning, so I bought myself a condo. At the time all my debt was a student loan, and a car loan. Once I got my first mortgage my credit score shot up 63 points. Last year I paid off my car loan and that made me lose about 10 points. Life happened. I needed to move into a house. This year I bought a house. My 2nd mortgage dropped my credit score by 63 points. My condo was 100% owner occupied so I couldn't keep it as a rental, I had to get rid of it. When I sold it, paying off that loan, dropping my total debt, lowering my debt to income ratio, moving from 2 mortgages to 1, only increased my credit score by 1 point.
I will NEVER under how credit scores work, but I know they affect chances of getting a mortgage and interest rates you can get. I can only imagine if I buy another property for a rental it's just going to punish my credit score again even more, so how do people do crazy stuff like buying 18 properties in 18 months with completely demolishing their credit scores?
Actually, getting a new mortgage usually causes a short term drop in your credit score, then an increase in your credit score in the long run.
It's actually not that complicated. Think of it in terms of if you were going to loan someone $100,000 of your own money, what looks more risky on their credit report:
1. A brand new mortgage with no payment history whatsoever, or
2. A mortgage with 6-8+ months of on-time payments?
The same common sense rules apply to most things on your credit report - maxed out revolving credit cards and late payments hurt your score, while responsible use of debt and on time payments increase your score.