I had a perfect 850 credit score. Then I paid off my house
Decrease in Credit Mix: Paying off your mortgage means you have one less type of credit account (installment loan) on your credit report.
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Credit scoring models like to see a mix of credit types, including revolving credit (credit cards) and installment loans.
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Temporary Dip: Some people experience a temporary dip in their credit scores after paying off a major installment loan like a mortgage.
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This is because credit scoring models consider your history of managing different types of credit.
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Length of Credit History: Paying off a mortgage might shorten the average length of your credit history if it was one of your oldest accounts.
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Creditors like to see a long history of responsible credit use.
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Credit Utilization: Your credit utilization ratio, which is the amount of credit you're using compared to your total credit limit, primarily applies to credit cards.
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Paying off a mortgage doesn't directly impact this ratio.