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Sad part was there was NOTHING I could do to stop the bleeding.
Sold my house early July, closed last Friday.
In the meantime:
1. I had a credit check in connection with my new mortgage. -1 point
2. Changed address since I needed a place to live for a month and a half -1 point
3. Paid off my old mortgage. -3 points
4. Made the final payment on my car loan -1 point
4. Called Comcast for new service, had no idea they did a hard pull. -5 points
Within two weeks I went from 755 to 744.
Good news, apparently lender didn't really care, but it was making me pretty nervous!!!
Was this score drop before close? I'm very nervous because our lowest mid is exactly at 740 at time of application. The only reason we're getting this loan/rate is bc of the 740. We're locked and the file is in UW, but do lenders pull scores before closing or just a report showing new/high balances? What happens if someone's score drops out of the top tier rate just before closing?
Congratulations on your new home! Yea...lender didn't care because you are in a good place anyway. They probably didn't even pull a new report before you closed, did they?
Pretty much what happened to me.
-paid off 6 yr installment loan 6 weeks before closing- 12-18 point drop depending on bureau
-change of address -4
-mortgage pulled my report 3 times in last 6 weeks -2
I did find out old account 5+ years pays out- GET READY. I don't understand the punishment, the 6 years I paid on that loan was perfect, make the last payment and WHAM!
@Anonymous wrote:Pretty much what happened to me.
-paid off 6 yr installment loan 6 weeks before closing- 12-18 point drop depending on bureau
-change of address -4
-mortgage pulled my report 3 times in last 6 weeks -2
I did find out old account 5+ years pays out- GET READY. I don't understand the punishment, the 6 years I paid on that loan was perfect, make the last payment and WHAM!
FICO 8 yes, but 2/3 of the mortgage trifecta aren't affected by this. Experian only as it's a '98 algorithm.
Change of address: doesn't affect FICO, something else changed.
Mortgage pulls: they have a 30 day grace period (and do roll up / dedupe scoring wise for a minimum of 14 days), once that 30 days is up though you will get a single scoreable inquiry against you assuming you didn't have pulls over an extended period of time.
To all - FICO's a complicated animal but it's not magic... and using FICO 8 monitoring isn't relevant for mortgage scoring purposes with the one exception of a single portfolio lender we've seen on this forum.
@Anonymous: congrats on the close!
Well.... 'why' would paying off a loan after all that time be a drop on your FICO 8? Utilization would be down, one less payment, good history.... Do installment loans just get figured differently? Can you explain?
@Anonymous wrote:Well.... 'why' would paying off a loan after all that time be a drop on your FICO 8? Utilization would be down, one less payment, good history.... Do installment loans just get figured differently? Can you explain?
TL;DR - FICO 8 (and FICO 98 too at least for part duex) calculate on two things:
As a result, paying one off will change your installment line utilization for certain, and seemingly no open installment loans may be the same as brand new ones from a scoring perspective; hard to say.
Longer gory thread if you have the patience or interest to read through it: