Do paying of mortgages and student loans hurt your score?

[Anonymous]

Let's assume you have two bills only (I am close to this, I have also a CC that will never be paid off because each month I charge as much as I pay practically)  andy say you have a mortgage with a low balance ready to be paid off and a a student loan the same... and you pay both off.  Will having it all paid off acutally hurt you? They are not revolving accounts, so I am not sure.

 If so, should you immediately go out and get new credit cards or a new car or something?

[Junejer]

Hi dahoov. Those installment loans may stay on your report up to 10 years after they are closed, so no they won't hurt.

Although you charge as much as you pay on the CC monthly, you can still manipulate what gets reported to the CRAs, by going in a few days BEFORE the statement date and paying the balance down to 1-9% util. You have to make a slight adjustment, b/c you can't use the card again until after the statement cuts. Doing this though will cause an increase in your scores.

[athensguy]

Part of FICO scoring is your credit mix. Unfortunately, closed accounts do not count in the mix. If you pay off your mortgage, you'll lose the mix from that, and if your student loans are your only regular installment, you'll lose the installment part of mix when you close them out.

[Anonymous]

Thanks for both of your responses.  All we have is three things we're paying for (or so we thought till we pulled our reports and saw two student loans which were consolidating still reporting as open loans!).  So we got those two taken care of by calling the agency.   I have a question about that I'll post in a another thread.

Anyway, right now I was dismayed.  All we have is a mortgage, one student loan and a small credit card bill.  The house and loan should be paid off within three years.  That leaves a very small credit card balance unless we do something else creditwise (doubtful).  So I don't want my score to be affected in a negative way and it will. I don't want to be forced to have to finance something else just so I can have a good rating!

I just learned though, my credit card is affecting our rating because it's 8% instead of 7% national ratio... .  I know it's picky but Transunion is scoring us at 785 instead of over 800!  Just because we're a little over.  Equifax does not count that against us and says we have no detriments in our scores.  Still I wonder why we're not higher than we are... what does it take to get up to 825 or 850?  Do you have to be God?  LOL I know it doesn't matter as we'll still get the best rates, but I want to be at least over 800 on all three and Transunion is off....  It's hard though having to keep that credit card all balanced out; especially if your roof caves in or you get some other unforseen expenses you need to charge.