Not sure if this topic is still alive, but just had the same thing happen to me. Paid off mortgage. Same day it was recorded on myFICO, score dropped 23 points!!!!! Yes, TWENTY-THREE points. Moderator, please don't "vote" something else went wrong. How is it actually calculated and WHY does paying off anything have such a drastic effect???? Makes NO sense at all. Had a mortgage for over 10 years, managed it well enough to NEVER be late or miss a payment. Managed it so well, I was able to pay it off. Can't keep the account open since it's a mortgage and obviously when it's paid off, it HAS to close. How does that make ANY SENSE? Had a loan for 10+ years, perfect payment history, pay if off and FICO tells me I can't manage my debts? B.S.
The only other thing that happened the same day was payment of a credit card balance from $2500 down to $0 was recorded as well. Since myFICO chooses to commingle the days transactions into one summed number, I don't know the effect of each individual transaction, but I've previously paid down a credit card balance and had my score go up 8 points, so I don't think this credit card payoff caused it to go down. So I can only assume that the credit card payoff made it go up, let's say 5 points, and the mortgage made it go down, let's say 28 points, so my final tally was (-28 + 5 = -23). My FICO score (using Experian data) went down 23 points. Completely ridiculous! I no longer have a large monthly mortgage payment, so I am better able to handle more debt, yet according to this score, the banks don't think I can. How does that make any sense?
