Suzanne in ABQ Posted March 2, 2017 Share Posted March 2, 2017 Our FICO score has hovered between 840 and 850 for years and years. Pretty near perfect credit. The A-student in me loves that! We paid off our house in November, 18 years early. What do we get to show for it? A FICO score of 801 because of a "LACK OF RECENT INSTALLMENT LOAN INFORMATION". According to FICO, "Having a loan along with other types of credit demonstrates that you are able to manage a variety of credit types," but apparently paying off a $300K loan in 12 years just gets us docked 50 points. I know it's not a big deal, primarily because it's still considered "Excellent" and because we have no intention of applying for credit anytime soon. It still gets under my skin. 4 Quote Link to comment Share on other sites More sharing options...
Janie Grace Posted March 2, 2017 Share Posted March 2, 2017 This just happened to me too, because of paying off our credit card back in September. They actually REDUCED our credit limit. It makes no sense! 1 Quote Link to comment Share on other sites More sharing options...
Arcadia Posted March 2, 2017 Share Posted March 2, 2017 Paying off car loan also drops the credit score by a little. Luckily we did our first refinancing before we paid off the car. Paying off HELOC had no effect though. When we were looking for a bigger place, the banks would rather have our long mortgage history with little loan left than for us to have finished paying the mortgage. Weird but we gave up trying to understand. 1 Quote Link to comment Share on other sites More sharing options...
Seasider Posted March 2, 2017 Share Posted March 2, 2017 Same here when I paid off one several thousand dollar debt with one bonus check of dh's. Messed up is right. 😕 1 Quote Link to comment Share on other sites More sharing options...
maize Posted March 2, 2017 Share Posted March 2, 2017 Yeah, it's a totally messed up system. So weird. 1 Quote Link to comment Share on other sites More sharing options...
Seasider Posted March 2, 2017 Share Posted March 2, 2017 Oh Suzanne, I meant to add, don't let this take away your sense of accomplishment for such a good thing. Paid off mortgage, that's terrific! 6 Quote Link to comment Share on other sites More sharing options...
Guest Posted March 2, 2017 Share Posted March 2, 2017 Lucky me, we've got years and years of excellent credit ahead of us 🙄🙄🙄! 12 Quote Link to comment Share on other sites More sharing options...
Random Posted March 2, 2017 Share Posted March 2, 2017 It's a super-flawed system! BUT...CONGRATULATIONS!!!!! :hurray: 1 Quote Link to comment Share on other sites More sharing options...
SparklyUnicorn Posted March 2, 2017 Share Posted March 2, 2017 There seems to be no rhyme or reason to the way it works I try not to overthink it. Your score is nothing to scoff at either way. 1 Quote Link to comment Share on other sites More sharing options...
Guest Posted March 2, 2017 Share Posted March 2, 2017 Not cool. Hate the credit game. But bravo in paying it off! Fantastic! Quote Link to comment Share on other sites More sharing options...
Janeway Posted March 2, 2017 Share Posted March 2, 2017 I know, it is irritating. But it won't affect you that much. We paid off our house years ago. Our credit is in the upper 700's now. We had no trouble getting a zero percent interest loan for our car a few years ago. Lots of older people deal with this. A lot of older people no longer have mortgages. If you ever need credit, places seem to differentiate between when your credit is dropping because of bad debts and dropping because of having already paid off your debts. 1 Quote Link to comment Share on other sites More sharing options...
Greta Posted March 2, 2017 Share Posted March 2, 2017 Incredibly irritating, but at the same time, it kind of makes sense, right? I mean, the purpose of a credit score is to help lenders estimate how much money they might be able to make off of you. If you're the kind of person who pays off debt early, they don't make as much money. It's messed up for the consumer, but the system wasn't set up for us! Anyway congrats on paying your house off early! I think that's an amazing accomplishment no matter what FICO says! 6 Quote Link to comment Share on other sites More sharing options...
Vintage81 Posted March 2, 2017 Share Posted March 2, 2017 Congrats on paying off the house! That's an awesome achievement. 2 Quote Link to comment Share on other sites More sharing options...
catz Posted March 2, 2017 Share Posted March 2, 2017 Oh wow. We are on track to pay off ours 15+ years early soon. Good to know. And really stupid. Previous history should factor into the score in a perfect world. 1 Quote Link to comment Share on other sites More sharing options...
Scarlett Posted March 2, 2017 Share Posted March 2, 2017 Our FICO score has hovered between 840 and 850 for years and years. Pretty near perfect credit. The A-student in me loves that! We paid off our house in November, 18 years early. What do we get to show for it? A FICO score of 801 because of a "LACK OF RECENT INSTALLMENT LOAN INFORMATION". According to FICO, "Having a loan along with other types of credit demonstrates that you are able to manage a variety of credit types," but apparently paying off a $300K loan in 12 years just gets us docked 50 points. I know it's not a big deal, primarily because it's still considered "Excellent" and because we have no intention of applying for credit anytime soon. It still gets under my skin. Congrats on paying off your mortgage! That is super awesome! 1 Quote Link to comment Share on other sites More sharing options...
shawthorne44 Posted March 2, 2017 Share Posted March 2, 2017 Just wait a few years, and then you'll get an even bigger credit score hit when the mortgage drops off entirely. Didn't good stuff stay on forever (many years ago)? We own two houses, three cars and a combined loan amount of 25K, and according to my credit score I am worse of a credit risk than when I was in college. Not because of problems but because of not much credit activity. Quote Link to comment Share on other sites More sharing options...
lavender's green Posted March 2, 2017 Share Posted March 2, 2017 It's for the lender's benefit (how much can they milk you for), not yours. Don't sweat it, and congratulations on paying off your house! 1 Quote Link to comment Share on other sites More sharing options...
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