07-09-2013 10:05 AM
I'm curoius as to how much impact it has when you sell a home and pay off your mortgage and HELOC. This would mean I only show one credit card with a small balance and a small payment. I would think removing $60K in debt from your report would help the score, wouldn't it? Thanks.
07-09-2013 10:19 AM
Paying off your mortgage should reflect positively, though not necessarily from the elimination of your mortgage (installment) balance. And the positive impact may not be much, since you no longer have an open mortgage, which is a considered a plus
07-10-2013 12:21 PM - edited 07-10-2013 12:22 PM
I'll add that you should consider the converse of the process. Paying off your mortgage doesn't help just like adding a $500k mortgage doesn't hurt. FICO largely ignores loan balances, or at least in relation to revolving accounts. If adding a large loan doesn't hurt (aside from the new TL reporting), then paying it off doesn't really help. Now a HELOC can be scored as a revolving, but FICO will lump it in as an installment up to a certain CL of that HELOC. That limit varies by FICO version and I think it is over $30k in general.