@Anonymous wrote:I don't know if this is the right sub for this but I'm going to sell my house soon and build a new one. I want my mortgage scores as high as possible. I know when I pay my credit cards off I'll get a pretty good score Increase but I have 3 loans 2 of which I'm going to pay off. They're all 3 with navy Federal. If I pay the 2 completely off my balance with the 3rd will be around 87%... However... If I don't pay the other 2 off and leave a very small balance navy Federal will extend the payments out by years and then the loan balances will be around 49%. Would this help my score any? Or does it matter since I will still have the boat loan? Even if it's just a few points it's worth it to keep those other loans a little longer til after I close on the new mortgage. I know loan balances should be pretty low to get a score Increase but I didn't know how low. I also didn't know if having 2 closed loans, if I did pay them off, would ding my scores.
The only thing we know for sure is that if your aggregate installment utilization gets down to 9% you'll get a bonus in your FICO 8 and FICO 9 scores.
Usually, however, it has little or no impact on your mortgage scores.
So in your case just focus on your revolvers, and trying to have as many as possible reporting zero balance, except that 1 bankcard should report a small balance each month.
@Anonymous wrote:Thanks so much! Do you think I'll get dinged for closing out those 2 loans? Or would it not matter since I will still have the boat loan? I won't have the mortgage anymore since that will be paid off when I sell the house. I appreciate your help
On the contrary, as @Anonymous correctly observes, you might actually get a score gain in your mortgage scores from reducing the number of accounts with balances.