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Posted in Mortgage
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Question By
puppyfan

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mortgage paid off, now worse rating! why??
my rating was 707, i paid off my mortgage and only have one small credit card debt (usually under $500.00, paid off or mostly paid off each month)

now my rating has gone down to 698 - i am shocked!

what gives?

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A credit report/score indicates to potential lenders your ability to repay a loan. When you pay off accounts, it reduces the number of examples to show these lenders. Also, it reduces the length of your relationship with a particular lender. when you pay off a loan, the account is closed. they want to see longevity. FYI the best credit profile is one that has a mortgage, student loan and 2 or 3 credit cards, max!

Reply by
AnitStupid

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Its a sham. The idea that first create the credit report system has all but failed. I too just paid off my first home load after 4years, $110K. My score saw a 45pt drop. And just this past report, it fell another 5pts because my new home loan has finally reported a balance.
Paying off a home, most people 20-30years should in no way ever cause a credit score drop. It should infact raise it!

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