Moderator Emeritus
Posts: 32,869
Registered: ‎08-04-2007
Re: Score simulator doesn't mention mortgage

axxy wrote:

How can I find out the score effect of paying off a mortgage early?  I've seen forums where people complained that their FICO scores nosedived from paying off a big debt early.  It defies common sense and seems extremely unfair, especially since there seems to be no way to find out in advance.  It's as if we had speed cops and no speed limit signs, and got tickets for guessing the speed limit wrong.  Especially if they also give you a ticket for going too slow, and you have to guess that too.  I want to write letters to my representatives in Congress to ask for legislation requiring FICO to disclose such information in advance, so people wouldn't have to gamble and not find out the result till after taking the plunge.  Are there any websites where such legislation is discussed?  Meanwhile, what should I do about my mortgage?  I have the money to pay it off, and can save a lot of interest by doing so, but will need good credit soon, so it might not be worth the risk.


Always put $$$$ ahead of a FICO score.


Per FICO scoring, paying off a mortgage wouldn't do anything negative to your FICO. With everything being equal and with no other changes, at the least, there's a chance your FICO could increase if you are carrying balances on most of your accounts. Plenty of folks on here have paid off loans while seeing no score increase or decrease.


I can't speak to the posts you may have seen, but not everyone pulls a FICO score 100% of the time from myFICO. Some rely on FAKOs and assume their FICO decreased when their FAKO decreased. Or worse yet, they compare a FICO to a FAKO and make an assumption that the score decreased. Or they get a FICO from myFICO and compare it to a FICO found elsewhere like from a lender. Not every lender uses the same FICO version as on here (e.g. a car delaership or a CC) and that can be a big source of error. Yet others do compare FICO scores on here, but they fail to account that a CC balance increased during the comparison, or some other change that resulted in score decrease and incorrectly correlate that decrease to the mortgage/loan.