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Trulia Miami, Home Buyer in Miami, FL

Does paying off a mortgage affect my credit rating?

Asked by Trulia Miami, Miami, FL Tue Feb 12, 2013

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Improving a credit score is nothing more than making payments on time, keeping balances low on revolving credit, not closing unused credit card accounts, don't open new accounts in an attempt to increase the credit score, don't open accounts too rapidly.
I heard of several people that paid down their loans and their credit score actually went down. Its based on the algorithm. Apparently the algorithms used by the FICO are not programed to distinguish between people who have had installment loans and those who have never had an installment loan. Once the loan is paid off, the computer thinks you have never had a installment loan and scores you that way. I hope it helps...
0 votes Thank Flag Link Tue Feb 12, 2013
Yes, in a good way. .........
1 vote Thank Flag Link Tue Feb 12, 2013
Yes. It decreases your outstanding credit, so your used to available credit limit drops. However if that is the only regular payment that you have it will be good to open a small home equity line and pay it monthly to show your continued proper management of credit.
0 votes Thank Flag Link Tue Feb 12, 2013
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