Can paying down your mortgage harm your credit rating?

Can paying down your mortgage harm your credit rating?

February 27, 2017

Overview

Paying down your mortgage should hurt your credit n’t rating, but outcomes may vary centered on other credit facets

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Paying down a home loan is just a hallmark of homeownership – but can it destroy your credit rating?

More often than not, paying down your home loan will not assist or harm your credit rating in just about any way that is significant. It may have a little impact that is negative the home loan ended up being your only installment loan, in line with the credit scoring agency Equifax’s site. In the end, “credit mix” makes up ten percent of FICO’s credit scoring model that is traditional. However if you never missed a payment within the life of the mortgage, that may offset any points lost because of the loan dropping down your credit file.

Outcomes differ dependent on each person’s credit situation. Brad Kingsley, who is semiretired and today works as a small business and coach that is financial paid down your home he has together with his spouse after offering a company they expanded over a length of two decades. Within 2 yrs of paying down the mortgage in full, the Kingsleys’ credit score fallen by 100 points.

The drop that is precipitous both atypical and mystifying. Continue reading

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