Does lowering your Mortgage balance improve your FICO score?

[Anonymous]

I was wondering if I had some extra funds to pay off a portion of my mortgage balance whether it would improve my FICO score or not. I paid of my second mortgage and it substantially improved my Experian score but had no affect on my Equifax or TransUnion scores. If I put a dent in my first mortgage (pay off 62000 of a 227000 balance) would that improve my score?

[MidnightVoice]

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elliptic wrote:
I was wondering if I had some extra funds to pay off a portion of my mortgage balance whether it would improve my FICO score or not. I paid of my second mortgage and it substantially improved my Experian score but had no affect on my Equifax or TransUnion scores. If I put a dent in my first mortgage (pay off 62000 of a 227000 balance) would that improve my score?

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EX thinks a HELOC is CC, so counts it in util.  Hence the increase in EX score.

Paying down the mortgage will have little effect.  Are all your CCs down to zero?

[Anonymous]

Yes my CCs are all 0. Actually I use them but pay off the balance each month...I don't like paying revolving credit interest. Seems like a waste of $. A credit reporting agency just told me that paying off credit cards every month is a negative factor for your FICO score. A 0 balance is interpreted as "not using your CC". Seems a bit wrong to me.

[MidnightVoice]

FICO seems to like to see a couple of CCs post a balance.  They can still be PIF withpout paying interest, but it shows activity on the Credit Report

So back to your original question, I suppose it really depends on where your score is, but I doubt it makes much difference.  And if your scores are 760 plus, you can do what is most financially sensible!

[Anonymous]

My scores aren't that high but EQ=703, EX=717, and TU=694. I'm almost in the 700 club. Thanks for your responses.