Credit Scores, Miscellaneous Factors
 

(Mods: I looked for an appropriate EXISTING thread, couldn’t find anything. My apologies if this more correctly belongs elsewhere.)

There are multiple threads discussing the impact of applications and pulls and utilization and reported income and businesses on credit scores and applications, it would be helpful to have a thread in which other (miscellaneous) influences can be discussed.

Right now I’m wondering about the wisdom of paying my mortgage in full insofar as my credit score is concerned. Motivated right now by an email (from a “donotreply” email address which initially went to my email junk folder) I just received informing me that my last (automatic ACH) payment was $50 short. Realized that my annual ARM change month is October, found the annual notice online in my mortgage account, decided that the annual reminder notice which in past years was always sent by snail mail thus giving me plenty of time to adjust my payments, probably also went to a junk email folder and I didn’t read it.

I’m relatively newly Medicare eligible age (yeah, hard to type the actual # ;)), paying mortgages for almost 40 years, 100% on time. Retired, relatively high net worth and pension and retirement incomes (probably waiting until age 70 to start drawing Social Security). Available (free) credit scores from 5-6 sources all well over 800 for many years, excect for USAA which for 2021 fluctuated monthly seemingly at random (between 763 and 799) and this year (Experian, FICO 3) has alternated monthly 786 or 805, apparently unrelated to application dates. Only negative factor is 12 hard pulls on Experian (5 on TransUnion, 0 on Equifax) and maybe “too many” credit card accounts; currently 22 open, average age 16 years, oldest 38 years, ~260 lifetime accounts (and ~180 total discreet SUBs :D), 85 “total open and closed accounts” per CreditKarma.

Currently 1 mortgage, a refinance 20 years ago, maturity in 10 years, ARM, moderate initial balance, current balance ~$75,000, easily payable from savings and/or investments. Nearing the end of my only ever car lease (30 months, ~$250/month, managed to get them to allow me a $15,000 down payment on a credit card without fee :tu:), will undoubtedly return to paying cash (or credit card) for a car, no other ongoing debts. I’ve read conflicting information about paying one’s only mortgage in full, some say it helps one’s credit scores, some say it hurts.

I greatly appreciate the collective wisdom of FT membership, would welcome comments about paying off a mortgage. Thank you.

Haven't had a mortgage for 20 years now, about the same age as you, hasn't hurt my credit scores at all. (840 on FICO 9)

No mortgage for nearly 8 years. Didn’t track my scores at that time to observe the impact of dropping that loan, but I can’t imagine that my score was significantly higher than now.

Looking at my spreadsheet of credit scores since 2019, I don’t see any impact when I paid off my car loan in 2021 (three years left on the 0% loan).

I would not expect that paying off a mortgage or other loan would have any immediate impact on a credit score, because the accounts will linger on the reports for some years.

Haven't had a mortgage for 20 years, love the feeling of freedom it gives, no impact on credit scores.

I think it's been 20 years for me as well :)

Thanks all for the replies. Quite a consensus when the Community Director, a Legend Mod, an Evangelist Mod and another Evangelist all agree :tu: :).

Just to agree with others and point out that installment loans in general don't contribute a lot to FICO scores. I have not had an open installment loan for years and my FICO scores are over 800. Some people swear by the "installment loan hack" but IMHO I would never pay interest just for a few FICO points.

We paid off our mortgage and car loan 5 years or so ago. I always had a credit score of close to 850.....I noticed a drop in my score of 10 or 15 points. It didn't like me no longer having a long-term loan that I paid every month on. 5 years later, no debt, c.c. paid off monthly.... my score has been a consistent 839.....never getting back up to the high 840's when I had a mortgage.

Being debt free is totally worth the loss of 10 points on my credit score.

Does anyone know how a Credit Limit is calculated?
Neither Chase nor Capital One know.
Chase does hard pull*experian & Equifax) if you request a CL increase. Capital One claims no inquiry will show on your credit report.

So I encountered Two problems recently with my credit score:
1. Chase without my authorization submitted a CL request which reduced my score 6 points. I have contested this and a review of the phone call verified it was a mistake by Chase, been referred to newsier ewarirtion service for Experian who is working Experian inquiry removal. Sadly, Chase hard pull went to Experian and equifax and no solution so far on how to correct this mistake.

2. Have a excellent credit score with 1-2% card utilization where my account went to 2% in Dec 2022 to one card showing a 17,%% card utilization. Balanced was reported to credit bureau on Dev 6, 2022, and my credit score dropped 7 points when this payment is not due until Jan 1, 2023.

Bi solution for what I feel is an inaccurate scoring tool FICO and Vantage that dropped my score 7 points when the balanced owed was not due for more than 25 days.
Neither Capital One nor Chase have a solution or support me knowing the score is penalizing for not paying all my bills in advance.
Amazing my overall card utilization is currently on 2% but one CC shows 17.5% where payment is not due but they penalize you.

Mortgage loan Helps FICO SCORE- PER EXPERIAN
 

Here is a comment on my Experian credit report for FICO where I show "hurting" for NOT having mortgage!!!!
PAYING OFF YOUR MORTGAGE LOAN "HURTS" YOUR FICO SCORE PER EXPERIAN

Lack of recent non-mortgage loan information
HURTING

• You have a lack of recent activity from a non-mortgage installment loan.
• Your credit report shows a $0 balance on your non-mortgage loans (such as auto or student loans) or a lack of sufficient recent information about your loans. Having a non-mortgage installment loan with no missed payments and a low balance along with other types of credit demonstrates that a person is able to manage a variety of credit types. Having a 0% installment loan balance to loan amount ratio is considered slightly more risky than having a low installment loan ratio.

I am quite happy to give up a few points to be mortgage and loan free :)

And obviously do not carry a CC balance.

Inquiries really do not matter and your current creditors have permission to pull a hard or soft at anytime so I'm not sure what your beef with chase is about.

The type of small score changes you are fretting about are not statistically significant. What you are describing is normal variation as balances are reported from month to month.

I have no open mortgage (or for that matter any installment) loan reporting and my scores are over 800 on all FICO versions.

FICO gives relative reasons your score is not perfect. What is your FICO score?

1. There is a difference between hard pull and a soft pull. I stated Chase without permission from me performed a hard pull which resulted inquiry to 2 credit bureaus and resulted a negative credit score Performing hard pull is NOT normal for an established account.
2. Chase has admitted the mistake and has already removed the Experian inquiry with my score increase partially +3 points on Experiam web site who uses FICO.
Unfortunately they must remove this inquiry from all of my credit bureau accounts only then can a comparison be made of how much was reduced and how much is gained removing the inquiry.
Chase uses Vantage scoring tool which is different loss from an inquiry versus FICO or Experian. I have no access to Equifax so sadly I must trust Chase on this removal.

The Experian note quoted in post 11 refers to non-mortgage installment debt, and it lists examples of such debts. It says nothing about mortgage debt.