Why did my score drop 16 points

[Pearlz]

We sold our home when Capital One reported the loan paid in full my score dropped. It was 691 now it's 675. Does anyone know why it dropped 16 points. I thought decreasing debt was good.

[frugalQ]

Open mortgages are factored into your FICO score calculation. It has something to do with credit mix.

When we refinanced our home last year, my credit scored dropped (I think it was 11 points) when the original mortgage updated as a closed account. The mortgage and credit mix explanation is what was given.

When our new mortgage finally reported (5 mos later), my score increased by 16 points.

I hope this helps.

[MovingForward_2012]

A mortgage is the highest quality trade line. When you paid off your mortgage, you were probably rebucketed by fico due to the loss of diversity.

[Mike_B03]

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@MovingForward_2012 wrote:
A mortgage is the highest quality trade line. When you paid off your mortgage, you were probably rebucketed by fico due to the loss of diversity.

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Cant wait to see what it does to my scores, I've never had a mortgage on my credit report.

[MovingForward_2012]

Supposedly it does great things after 6 months. I'm not there yet either. 4 more months and I will let you all know the result!

[beb86]

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@frugalQ wrote:
Open mortgages are factored into your FICO score calculation. It has something to do with credit mix.

When we refinanced our home last year, my credit scored dropped (I think it was 11 points) when the original mortgage updated as a closed account. The mortgage and credit mix explanation is what was given.

When our new mortgage finally reported (5 mos later), my score increased by 16 points.

I hope this helps.

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+1 as a FICO scores how you handle debt it wants to weigh more on your current open debt than your closed debt.

[wpbguy]

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@MovingForward_2012 wrote:
Supposedly it does great things after 6 months. I'm not there yet either. 4 more months and I will let you all know the result!

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I'll be right there with you folks. I close in a couple days and that space in my credit garage called "mortgage" has has been housing old Christmas decorations will finally be filled