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 home loan shouldn’t hurt your credit rating, but outcomes can vary greatly according to other credit facets

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Settling a home loan is just a hallmark of homeownership – but could it destroy your credit rating?

Generally in most instances, settling your home loan doesn’t assist or harm your credit rating in virtually any significant means. It might have a tiny impact that is negative the home loan had been your only installment loan, in accordance with the credit rating agency Equifax’s site. In the end, “credit mix” is the reason 10 % of FICO’s old-fashioned credit scoring model. However if you never missed a repayment throughout the full life of the mortgage, which could offset any points lost as a result of the loan dropping down your credit history.

Outcomes differ based on each person’s credit situation. Brad Kingsley, who is semiretired now works as a small business and economic coach, paid down your home he has together with spouse after attempting to sell 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. Continue reading “Can paying down your mortgage harm your credit rating?”