Can you dispute FICO drop due to paying off mortgage?

[prim2007]

My score dropped more than 25 points due to paying off a mortgage as agreed. Can I dispute such a drastic drop? This is an attempt to keep us in debt by penalizing us. Ridiculous. 

[Jnbmom]

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@prim2007 wrote:

My score dropped more than 25 points due to paying off a mortgage as agreed. Can I dispute such a drastic drop? This is an attempt to keep us in debt by penalizing us. Ridiculous. 

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You can't dispute  points dropping...................................................

[Anonymous]

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@prim2007 wrote:

My score dropped more than 25 points due to paying off a mortgage as agreed. Can I dispute such a drastic drop? This is an attempt to keep us in debt by penalizing us. Ridiculous. 

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My findings have been around a  22 point drop for the pay off of an auto loan and about 20 points for a mortgage payoff. Similar to what you have experienced. Remember, scores are focused on people actively utilizing credit and not for people who are less active in the use of credit.

[Anonymous]

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@Jnbmom wrote:

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@prim2007 wrote:

My score dropped more than 25 points due to paying off a mortgage as agreed. Can I dispute such a drastic drop? This is an attempt to keep us in debt by penalizing us. Ridiculous. 

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You can't dispute  points dropping...................................................

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That's right.  The dispute process solely involves correcting false information on a credit report.  My guess is that your credit report is fully accurate -- i.e. your past reports correctly showed an open mortgage and the current report correctly shows a closed mortgage.

If you would like some suggestions on a simple fix that should cost you almost nothing and involve almost no debt, let us know.

[prim2007]

Thanks. I really worked hard to get my credit score to 840. I paid off my car loan last year. I just relocated and paid off my mortgage and then secured another mortgage that is 60% less than my prior mortgage. All these actions have taken my score down to 799 so looking for tips to get back on track. My payment history is stellar, my debt is 2%, and credit history is still over 17 years so not sure what levers I can use. 

[Anonymous]

Darn.  I was thinking that you had no open loans any more.  In which case the Share Secured Loan Technique would have been an easy fix.

What has happened is that you went from having open loans that were mostly paid off to open loans for which almost none of the debt is paid off.  (Your sole open loan is one where you owe almost the entire of the original loan amount.)  The FICO 8 model rewards people for having loans that are almost but not entirely paid off.

When you say that your payment history is stellar, do you mean that at no point in the last 7 years have you been late once on even one account?  Even one 30-day late from a while back can hurt your score significantly.

How many credit cards do you have?  Of these, how many were opened in the last year?

The good news is that a 799 FICO 8 score will secure you the most favorable terms on any loan or CC application.  Lenders do not give you any kind of edge for having an 840 compared to a 790.

As your loan is slowly paid down your FICO 8 score will go up.  And if you have a number of recently opened accounts, you will also get a score boost if you open no accounts during the next year.

[Anonymous]

go back to the bank and tell them you want to reopen the mortgage just to get your fico points back... my score dropped by that much when I just paid off my truck... get over it... enjoy the paid for house... thats a lot more important than the few fico points...

[Anonymous]

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@prim2007All these actions have taken my score down to 799 so looking for tips to get back on track. 

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The only tip here really is to allow time to pass. 

How many inquiries do you have within the last year on the bureau where that 799 score was drawn from?  I'm assuming your new mortgage is your youngest account, meaning your AoYA is 0-2 months or so.  If you don't app for any credit for the next year, you'll see around a 15-20 point gain when your new mortgage (AoYA) hits 12 months.  If you've got 1+ inquiries on that bureau, you'll see more than 15-20 points.  That right there will put you right back in the low 820's or so, which really isn't that far off from 840 considering you traded an almost paid off installment loan for an almost maxed out one.  All you can really do here is allow that time to pass, which isn't all that long in the grand scheme of things.

[Berk]

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@prim2007 wrote:

My score dropped more than 25 points due to paying off a mortgage as agreed. Can I dispute such a drastic drop? This is an attempt to keep us in debt by penalizing us. Ridiculous. 

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I'm confused - did your debt actually increase because your score dropped?

[RobertEG]

FCRA 609(f)(5)(A) provides that a credit score that is provided by a CRA and was developed by another party cannot be disputed.