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 shouldn’t hurt your credit rating, but outcomes can vary according to other credit factors

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

In many situations, paying down your home loan will not help or harm your credit history in virtually any way that is significant. It might have a little impact that is negative the home loan had been your only installment loan, in accordance with the credit rating agency Equifax’s web site. All things considered, “credit mix” makes up ten percent of FICO’s credit scoring model that is traditional. However if you never missed a payment on the life of the mortgage, that may offset any points lost as a result of loan dropping down your credit file.

Results differ dependent on each person’s credit situation. Brad Kingsley, who is semiretired and today works as a small business and monetary coach, paid the house he has together with spouse after attempting to sell a small business they expanded over a length of two decades.

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