I paid off my house (no new loans) in Nov and my credit score dropped 30 points. Still haven’t figured out that one.
When I changed banks, my new bank did a free credit check on me. They found I’m not even in the system. My mom isn’t either. She never has had her name on any debt.
We have flipped several houses. Each time we sell one and get the debt off the credit bureau reports our scores have dropped. This is only a part of what lenders look at, however. Your debt to income is also considered and not just debt utilization.
One aspect that really frosts my Wheaties is that there are many scoring models used by lenders. One scoring model may be 750 and another 680. There needs to be greater standardization across the models.
I paid off everything except the mortgage last December and my score went up to 850 from the high 700s. It was pinned 850 until I bought a 2nd home in July and now it hovers around 815.
I have not missed any payments in 15+ years on anything. I'm still not quite sure what the issue is. I guess total outstanding debt? I dunno. I'm certainly credit worthy.
When we had a house payment and car payments, etc. we had the highest score you could get since everything was paid on time. Now we have no house payment, or car payment and our credit cards are paid off every month. We owe no one anything. I’m sure our score is a lot lower now but since we don’t need it I haven’t even looked at it.
Because you paid off your house, the bank can no longer take it away from you. So, theoretically, according to the bank, you are a greater credit risk than before.
I know. It’s ridiculous, egregious, preposterous, and outrageous, but that is how they think.
Faithfulness, thrift, and honesty are not good qualities with them, and they really don’t want you as a customer, because you pay your bills on time, do not accrue a balance, and therefore, pay very little interest on loans. So, they are not making any money off you.
Just my humble opinion, so don’t flame me! :-)
I paid off my house (no new loans) in Nov and my credit score dropped 30 points. Still haven’t figured out that one.
Same deal. Pay off an account with thousands it drops Add$ 50 on another you haven’t used in awhile it goes up.
Have 40 years of never missing a payment. No extra credit...
Pay off multiple houses, no credit
I have credit card debt but I am not worried about as I have stock (AMD) and when it goes up a few dollars, my bills are paid off. May do so when AMD reports their results next Tuesday. It should be another good quarter. Another reason to buy stock!
Credit
http://www.credit.com to get your free score.
FICO is a scam for the most part. They also rate how long you keep a credit card. I guess they think it is a smart move to have a high interest card vs 0% !
Credit Inquiries lower your score because you are looking to borrow money.... I guess merely asking and the credit agency will impeach you : )