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Will paying off my home mortgage raise my credit score
Have the cash to pay off the outstanding loan on my home 4 years early. No other oustanding debt. Score at 787.
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Rwave
1 year ago
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Chances are no. Usually fixed installment loans/debt are actually good for your credit score. Also with your score I suspect only time will improve it. If I were you, I would pay the loan off. IMO there paying interest to boost a credit score is illogical and backwards. A good credit score is supposed to save money on interest, not the other way around.
hardeight 1 year ago
I agree with hardeight. From what I've read, lenders like to see regular payments throughout the entire period of the loan. This indicates that if you get a new loan, they will make their full interest on the investment, so paying early can be a negative in that sense. But if you pay off early, you'll save money. And even if your score drops a little, you have a great score. You could drop twenty points and still be getting the best rates on future loans. Don't stress about the score. Save money by paying off early.
jhrhodes 1 year ago
I dont agree, I think it will improve it because it decreases your income to debt ratio. Its not like that is the only source of credit you have is your mortgage, chances are you have credit cards, car payments etc that your credit will still be showing payments.
ddoopy44 1 year ago
Your DTI is not used in the credit score calculation. I do agree that if you have many other credit accounts the effects will be lessened.
hardeight 1 year ago
JMO Pay the flippin mortgage off. Save what you are paying now for a futre home purchase or for retirement. Your credit score will not shelter you if your house burns down. Your credit score is not a measure of how wealthy you are it measures the fact that you went into debt stayed in debt and made timely pymts.
jte1958 1 year ago