topic Re: Does Paying down Mortgage positively impact FICO score in Mortgage Loans

Does Paying down Mortgage positively impact FICO score

ozgirl — Wed, 10 Oct 2007 02:40:19 GMT

Since a mortgage does not figure into revolving credit, what impact if any does paying down mortgage balance have on your FICO score?

Re: Does Paying down Mortgage positively impact FICO score

Anonymous — Wed, 10 Oct 2007 03:00:48 GMT

Mortgage from what I hear is even different from other installments. I don't know. I've heard that below 50% on other installments is good. I never paid attention to see what happens when I paid down installments. I always looked at before and after. It's a good question.

Re: Does Paying down Mortgage positively impact FICO score

haulingthescoreup — Wed, 10 Oct 2007 03:06:21 GMT

ilovepizza wrote: I've heard that below 50% on other installments is good.

Pizza, would this include student loans? I've got two really low-balance loans that I pay at about $50/ month above the minimum. I've kept them going for the loan mix. Would it actually do anything useful to pay them to below 50% each? Getting pretty bored--not a whole lot left to do any more but wait for the lates to age off!

Re: Does Paying down Mortgage positively impact FICO score

Anonymous — Wed, 10 Oct 2007 04:48:12 GMT

Yes- paying non-mortgage installment accounts under 50% seems to be a PLUS to the FICO gods.

@haulingthescoreup wrote:
ilovepizza wrote: I've heard that below 50% on other installments is good.
Pizza, would this include student loans? I've got two really low-balance loans that I pay at about $50/ month above the minimum. I've kept them going for the loan mix. Would it actually do anything useful to pay them to below 50% each? Getting pretty bored--not a whole lot left to do any more but wait for the lates to age off!

Re: Does Paying down Mortgage positively impact FICO score

ShanetheMortgageMan — Wed, 10 Oct 2007 07:49:51 GMT

From my experience reducing revolving utilization is the only way to increase FICO scores from paying something down. Paying something off (whether it's installment, mortgage or revolving) can have a positive impact on scores if it is previously determined that you have "too many accounts with balances". I believe myFICO.com's credit reports have a type of a "What if?" simulator that can simulate an effect of paying something down/off, perhaps I am thinking of TrueCredit though.

Re: Does Paying down Mortgage positively impact FICO score

Anonymous — Wed, 10 Oct 2007 14:15:34 GMT

I'm not sure about student loans. I've never had one. But they are deferred loans so it might be possible they are scored similar to mortgages. Then again, it most definitely is regular debt with no equity to back it up. I'll guess paying off 50% is better for student loans. I don't have the experience with student loans, but I'd PIF on 25th payment if I could. I'd get 2 years of history and close it to have 1 less bill to worry about. I'd do what saves me money first, but this is what I'd do if it were low or int free. That's just me. I don't know how many points you could still gain by extending it further.

Message Edited by ilovepizza on 10-10-2007 07:15 AM

Re: Does Paying down Mortgage positively impact FICO score

haulingthescoreup — Wed, 10 Oct 2007 19:49:13 GMT

Maybe I'll try this next month, if all the current stuff ever reports and the scores settle down. I'd like to see a before-and-after.

Is there anything magic about having 2 or more years of history on them? You mentioned that.

My revolving util is now under 2%, so I don't think I'll piddle around with it much more. Everything else pretty much is what it is--trying some GW's and waiting for past stupidities to go over 24 months.

Re: Does Paying down Mortgage positively impact FICO score

Anonymous — Wed, 10 Oct 2007 20:58:59 GMT

I sold my home in august and am waiting to settle on new home. When this hit my credit report, my EX score went down, they said i didn't have enough mortgage accounts, neither eq or tu score went up, basically stayed the same.

Re: Does Paying down Mortgage positively impact FICO score

ozgirl — Thu, 11 Oct 2007 05:12:29 GMT

Interesting! It sounds to me as though whoever is behind the scoring system is very interested in making certain we all owe mortgage companies money! You would think that getting your revloving utilization down to "the ideal" level while paying off and or paying down a large mortgage would reflect positively on your fico scores.

Incentive to stay in debt--not for me. However, I find it rather absurd to think I am working so hard to reach "fico nirvana" only to be slapped down for paying off a $400K debt.

Re: Does Paying down Mortgage positively impact FICO score

Anonymous — Fri, 12 Oct 2007 01:54:03 GMT

I have been try to have "Understanding FICO® Scoring" changed to "Interpeting Oxymoronic Scoring"

As "Understanding FICO® Scoring" itself is an Oxymoron

@ozgirl wrote:
Interesting! It sounds to me as though whoever is behind the scoring system is very interested in making certain we all owe mortgage companies money! You would think that getting your revloving utilization down to "the ideal" level while paying off and or paying down a large mortgage would reflect positively on your fico scores.

Incentive to stay in debt--not for me. However, I find it rather absurd to think I am working so hard to reach "fico nirvana" only to be slapped down for paying off a $400K debt.