Credit Scores, Miscellaneous Factors

Old Nov 23, 22, 10:09 am
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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 ), 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 ), 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.
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Old Nov 23, 22, 10:36 am
Join Date: Oct 2004
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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)
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Last edited by cjw2001; Nov 23, 22 at 10:45 am
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Old Nov 23, 22, 3:05 pm
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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).
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Old Nov 23, 22, 3:14 pm
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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.
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Old Nov 23, 22, 3:38 pm
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Haven't had a mortgage for 20 years, love the feeling of freedom it gives, no impact on credit scores.
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Old Nov 23, 22, 5:17 pm
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I think it's been 20 years for me as well
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Old Nov 24, 22, 12:18 pm
Original Poster
Join Date: Feb 2011
Location: NYC suburbs; prefer LGA, then JFK, maybe EWR
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Thanks all for the replies. Quite a consensus when the Community Director, a Legend Mod, an Evangelist Mod and another Evangelist all agree .
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Old Nov 26, 22, 9:12 am
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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.
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Old Nov 26, 22, 12:59 pm
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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.
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