No Mortgage Loan lowers credit score.

[Reighn9]

Why is not having a mortgage loan a factor in lowering my credit score when I have owned my home for 37 years and it has been paid in full for 21 years?  I thought having loans paid off was a good thing but I'm supposed to have a loan to raise my score.  I don't understand.  I'm not taking a 2nd mortage, but I keep trying to raise my score and there are always new reasons listed.

[bahbahd]

Mortgage loan in your credit profile shows that you are playing the (credit) game and you appear more stable than others people without a mortgage. Having a mortgage typically means you are secure in your finances, putting down roots, not going anywhere soon, have stable income, etc.  Yes, your credit report and score does not take into account that you may already own a home, have deep roots and be much more financially stable than other people without home loans. Fair? I'm not sure.

[llecs]

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@Reighn9 wrote:

Why is not having a mortgage loan a factor in lowering my credit score when I have owned my home for 37 years and it has been paid in full for 21 years?  I thought having loans paid off was a good thing but I'm supposed to have a loan to raise my score.  I don't understand.  I'm not taking a 2nd mortage, but I keep trying to raise my score and there are always new reasons listed.

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I added a mortgage loan and lost points from my TU and EQ FICO on here. 

Now having a 37-year history on a credit report is an excellent thing to have and without a doubt you'd have an insta-FICO improvement if you lacked 37-yr histories on your CR. Unfortunately it's industry practice to delete closed accounts after 10 years. So if you lender chose to report, they or the credit reporting agency had it deleted 11 years ago or so.

You can certainly hit into the 800s without a mortgage reporting as many in here have. I had a 777 on my EQ FICO on here without a mortgage reporting, and that's with an average history age of only 3-4 years.

[Gunnar419]

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@Reighn9 wrote:

Why is not having a mortgage loan a factor in lowering my credit score when I have owned my home for 37 years and it has been paid in full for 21 years?  I thought having loans paid off was a good thing but I'm supposed to have a loan to raise my score.  I don't understand.  I'm not taking a 2nd mortage, but I keep trying to raise my score and there are always new reasons listed.

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Don't worry about the reasons listed. Even when your score is really high, MyFico will still give you reasons why it's not higher.

I also have no mortgage but that's actually a very small factor in scoring. My scores have been as high as 780 without a mortgage and with a relatively short AAoA.

[pizzadude]

Curious, where did you get the scoring reasons about not having a mortgage? I'm not aware that FICO scoring would give a message like that.

[WhiskersTheCat]

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@pizzadude wrote:
Curious, where did you get the scoring reasons about not having a mortgage? I'm not aware that FICO scoring would give a message like that.

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It's found under the "Understanding Your Score" tab when you buy a FICO Score. 

[OptimalCS]

llec wote:

I added a mortgage loan and lost points... +1

[Kratos-TM]

Well I finally fixed a 6 month issue with my installments not reporting as mortgage. They were just reporting as installment. But now they are reporting as mortgage. Just for kicks I bought all 3 fico scores again from myfico when the "account type" was changed over....... and I gained 25 points from all 3 bureaus.....

I know some have said that FICO doesn't see a mortgage different from any other installment but I'm not so sure anymore........ ???