Will my FICO score go down after selling a house? Youngster needing advice.

[Anonymous]

Hi,

I'm reaching out for advice.  I'm a 24 year old with a FICO score of 787.  I'm assuming my high score is attributed to good credit history (CC bills paid in full every month) and perfect payment history on my 30 year mortgage (purchased in August 2004). 

I'm in the process of selling my house and will not be purchasing a property and taking out another  mortgage for a few years.  Due to this event, I will no longer have the mortgage payments to continue showing my good payment history.  Will this hurt my FICO score?  If so, what can I do to keep the score high?  I will be going back to school for 2 years or so, with limited credit activity during this time (also going back to a limited income while in school).

The only other line of credit which I have is on CC, which are fully paid-off every month.  No car loan. 

Thanks,

[Anonymous]

You will most likely take a hit.

Not going to be a big deal.
Will you be taking on student loans?

Be sure to use your credit cards abit.

The real question is why am I giving advice to someone with near 800 FICO's?

[Anonymous]

Thanks Timothy.  I was considering taking the money from my house appreciating and using that to pay for a portion of school and pay for the rest with student loans.  Good or bad idea? 

I've been told that I should just take out student loans for the entire amount and save the money from the house.  You can't beat the student loan interest rates and I may need the money for another house down payment in a few years. 

I appreciate any feedback out there. 

Thanks!

[MidnightVoice]

Well, the mortgage will stay on your CR for 10 years as paid and closed, which is good.

The rest is a financial decision, rather than a credit question.  And your score is in very good shape for a 24 year old!

[MeganML84]

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FICOYoungster wrote:

Thanks Timothy.  I was considering taking the money from my house appreciating and using that to pay for a portion of school and pay for the rest with student loans.  Good or bad idea? 

I've been told that I should just take out student loans for the entire amount and save the money from the house.  You can't beat the student loan interest rates and I may need the money for another house down payment in a few years. 

I appreciate any feedback out there. 

Thanks!

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If you can get a better interest rate on investing your money from the house than what you are paying in interest on your student loans then invest. No sense in paying off the loans early if they are a positive TL on your credit reports...especially if you can make more money on investing the payoff from your house.

Just my $.02

[lorihmatthews]

There is one more thing to consider -- capital gains tax. You said you are selling your home and don't plan to buy another for several years. You should meet with an accountant to see how that will affect your taxes so you're not blindsided. Otherwise you may wind up paying a load of money due to the sale of the home and the related profit.

[Anonymous]

3+ years owner occupied. She is in the clear.

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@lorihmatthews wrote:

There is one more thing to consider -- capital gains tax. You said you are selling your home and don't plan to buy another for several years. You should meet with an accountant to see how that will affect your taxes so you're not blindsided. Otherwise you may wind up paying a load of money due to the sale of the home and the related profit.

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