@Anonymous wrote:Just bought a new house. With the inquiries from the mortgage lenders, my FICO took a 7-point hit (expected). Also, after closing, I got rid of a Capital One account I'd kept open just because of the hight credit limit (and exorbitant interest rate) and opened a BOK Cash Rewards account. Another 9-point hit. So I checked today to see where my credit score is now that the dust has settled.
Instead of the expected 16, my credit score is down a whopping 37 POINTS!
Here's why: the mortgage on my previous property is reported as paid off. That cost 21 POINTS!
Bear in mind that the mortgage wasn't for much, and was only 2.5 years old. So it's not an average age of accounts thing. My new mortgage is not reporting yet. Does anyone know if it will bump my score back up when it finally does? And WHY ON EARTH are you penalized for paying a loan off on IN FULL and EARLY?
To take a FICO beating over that seems pretty stinking ridiculous.
FICO 8 really wants to see open tradelines for mix of credit (I'm abusing the term but it's so intrinsicly tied it's fine imo).
It's a long thread but it's been a significant matter of discussion here: http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/penalized-for-not-having-installment-loan-what-does-this-mean/m-p/3151642#U3151642
Long story short, your score will likely recover (minus any AAOA changes for the new tradeline) once the new mortgage lands on the reports if this was one of your last open installment tradelines which is where we typically see the decrease anecdotally.
