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New Member
aplus
Posts: 3
Registered: ‎05-24-2007
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FICO score and mortgage balance

Anyone out there know how a mortgage balance effects the FICO score.  If the mortgage balance is larger (ie. not much principle paid down), does the mortgage balance get factored into the dept picture negatively?  Are some bureaus paying more attention than others to mortgage balance?
 
Your thoughts, comments...
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Tuscani
Posts: 6,182
Registered: ‎03-29-2007
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Re: FICO score and mortgage balance



aplus wrote:
Anyone out there know how a mortgage balance effects the FICO score.  If the mortgage balance is larger (ie. not much principle paid down), does the mortgage balance get factored into the dept picture negatively?  Are some bureaus paying more attention than others to mortgage balance?
 
Your thoughts, comments...



Not a whole lot as the account is installment. Now, that does not mean the account is not important. Installment loans provide a good mix of credit.. it just means revolving util is much more important than installment util.
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MidnightVoice
Posts: 8,157
Registered: ‎03-25-2007
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Re: FICO score and mortgage balance

It does not seem to have facored much in my score, except when I refinanced my average age of accounts went down  (I think)
The slide from grace is really more like gliding
And I've found the trick is not to stop the sliding
But to find a graceful way of staying slid
Established Contributor
FICO_Focused
Posts: 905
Registered: ‎05-09-2007
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Re: FICO score and mortgage balance

Doesn't matter how high the mortgage balance is... It's the Hx on the loan that make an impact in the FICO algorithim. The longer the mortgage is reported and paid current the more impact it has.
 
Unlike Revolving debt that takes into consideration the utilization first, then the Hx.
 
Take Care.

Rob
Super Contributor
MidnightVoice
Posts: 8,157
Registered: ‎03-25-2007
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Re: FICO score and mortgage balance



FICO_Focused wrote:
Doesn't matter how high the mortgage balance is... It's the Hx on the loan that make an impact in the FICO algorithim. The longer the mortgage is reported and paid current the more impact it has.
.

Rob


Do you know what happens to scores with refinancing/moving?
 
Just curious
The slide from grace is really more like gliding
And I've found the trick is not to stop the sliding
But to find a graceful way of staying slid
Established Contributor
FICO_Focused
Posts: 905
Registered: ‎05-09-2007
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Re: FICO score and mortgage balance

The mortgage is paid, the hx remains even after the account is closed. The refi reports as a new loan... Seems like the typical scenario is there is an initial hit to the FICO comes as a result of the new account for ~180 - 270 days... Then the rebound. 
 
The rebound can be expedited if there is a cash out used to pay down previously high debt loads.:smileywink:
 
When people move, there is another thing to take into consideration - credit is often used to finance the items needed to take up the new residence. This may create difficulties when it comes time to pay down your revolving balances - otherwise the refi scenario stays the same.
 
The best advice to those that are moving and want to maintain the FICO they worked so hard to raise prior to loan market entry --- is to wait 6 - 8 months after the move to make the additional purchases (i.e. furniture, floors, bathroom remodels, etc.) And use as much cash as is possible. :smileyvery-happy:
 
Take Care.
 
Rob
Super Contributor
MidnightVoice
Posts: 8,157
Registered: ‎03-25-2007
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Re: FICO score and mortgage balance

Many Thanks
 
A move is a possibility in my future.  As I have no oustanding debts other than the mortgage, that is not a problem.  And I have enough junk to fill two houses  :smileyvery-happy:
The slide from grace is really more like gliding
And I've found the trick is not to stop the sliding
But to find a graceful way of staying slid
sgh
New Member
sgh
Posts: 2
Registered: ‎09-25-2007
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Re: FICO score and mortgage balance



FICO_Focused wrote:
Doesn't matter how high the mortgage balance is... It's the Hx on the loan that make an impact in the FICO algorithim. The longer the mortgage is reported and paid current the more impact it has.
Unlike Revolving debt that takes into consideration the utilization first, then the Hx.
Take Care.

Rob



In light of the recent mortgage crisis I decided to check my credit score. One of the areas that is negatively impacting my score is: "Your mortgage account balances are too high in comparison with your credit limits. [TransUnion]" So it does make an impact. Don't misslead people. The worst part about it is that I refinanced this loan so that I would have better cashflow on a rental property. I did not take any extra money out, but the loan to balance is high because the limit is lower. To me that is very good use of credit, my income is higher and payments are lower and my payment history is perfect (never missed or late on a payment in 20 years).
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Epic Contributor
haulingthescoreup
Posts: 28,098
Registered: ‎04-01-2007
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Re: FICO score and mortgage balance


sgh wrote:
In light of the recent mortgage crisis I decided to check my credit score. One of the areas that is negatively impacting my score is: "Your mortgage account balances are too high in comparison with your credit limits. [TransUnion]" So it does make an impact. Don't misslead people. The worst part about it is that I refinanced this loan so that I would have better cashflow on a rental property. I did not take any extra money out, but the loan to balance is high because the limit is lower. To me that is very good use of credit, my income is higher and payments are lower and my payment history is perfect (never missed or late on a payment in 20 years).


sgh, out of curiosity, did you happen to pull all 3 FICO (not FAKO) scores, and was your TU lower than the others? I ask because each CRA seems to get snippy about different areas than the others.

Also, it seems that those few and lucky people who have high scores often get some weird and wacky criticisms, where as the rest of us slobs get broadsides addressing overall age of accounts and so forth. I saw an explanation on another thread that the companies feel obliged to scold you for something, unless you're 850 x3, so they make some pretty ludicrous comments when they can't find a genuine problem. Just a thought.
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Frequent Contributor
andyaycw
Posts: 298
Registered: ‎07-25-2007
0

Re: FICO score and mortgage balance

I agree, TU seems to be more "snippy" about balances on installment loans than the other two CRAs.

Starting Score: EQ 773, TU 766
Current Score: EX 794, EQ 787, TU 776
Goal Score: 800


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