Personal Finance

paying off mortgage and credit scores dropped 50 points

  • Last Updated:
  • Apr 13th, 2019 1:28 am
[OP]
Newbie
Jan 30, 2017
32 posts
5 upvotes

paying off mortgage and credit scores dropped 50 points

I just sold my old house but was very frustrated to see my credit scores dropped from 870 to 780. I do have other loans and credit cards so I still have credit products!!

I am so worried I wouldn't be able to have a large amount of mortgage to buy a new house because of the score.

Why is paying off mortgage a penalty!!!!!!
14 replies
Member
Dec 23, 2012
225 posts
169 upvotes
RICHMOND HILL
I can't say if your mortgage caused that but:

a) Those are 90 points, not 50
b) it's still way higher than what you need to get a mortgage with any lender
Member
Feb 9, 2018
309 posts
211 upvotes
780 is still a good score. Its not going to impact your ability to get approve for another mortgage as long as you meet income qualifications and credit history is good otherwise.
Deal Addict
Apr 21, 2014
2120 posts
868 upvotes
Alberta
sunbat wrote: 780 is still a good score. Its not going to impact your ability to get approve for another mortgage as long as you meet income qualifications and credit history is good otherwise.
870 or 780 lenders don’t care, you will get the same rates. If it’s less than 750, then it’s different.
Sr. Member
Dec 1, 2016
716 posts
655 upvotes
Credit Score = Debt Score. You are in a good position now. You should pay cash for everything now and not borrow at all. Cash is King!
Deal Fanatic
User avatar
Feb 2, 2014
7385 posts
1875 upvotes
Toronto
palaparapalapara wrote: I just sold my old house but was very frustrated to see my credit scores dropped from 870 to 780. I do have other loans and credit cards so I still have credit products!!

I am so worried I wouldn't be able to have a large amount of mortgage to buy a new house because of the score.

Why is paying off mortgage a penalty!!!!!!
All you need is a 600 credit score for a mortgage, relax OP.
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
President's Club Award Winner At The Mortgage Architects
[OP]
Newbie
Jan 30, 2017
32 posts
5 upvotes
thanks guys! I am just wondering if my score is above 800, I may be able to borrow more..And sorry about my math..:)
Deal Guru
User avatar
Mar 23, 2008
10155 posts
6451 upvotes
Edmonton
palaparapalapara wrote: thanks guys! I am just wondering if my score is above 800, I may be able to borrow more..And sorry about my math..:)
How much you can borrow is usually driven by your income and debts. Your rate, and IF you can borrow is more likely to be driven by your score.

But the score you see is not the same that lenders use anyway, so I wouldn't worry about it too much. And as far as that goes, have you ensured that the ONLY thing that's changed is paying off your mortgage? Like, you didn't pay off your mortgage by drawing from an LOC or something?

C
Deal Expert
Aug 22, 2011
30458 posts
16321 upvotes
Ottawa
The scores with these bureaus are meaningless.
My TU score dropped by 20pts, with no hard hits and nearly identical utilization as the previous month?
Deal Fanatic
User avatar
Feb 2, 2014
7385 posts
1875 upvotes
Toronto
palaparapalapara wrote: thanks guys! I am just wondering if my score is above 800, I may be able to borrow more..And sorry about my math..:)
It doesn’t make any difference OP
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
President's Club Award Winner At The Mortgage Architects
[OP]
Newbie
Jan 30, 2017
32 posts
5 upvotes
CNeufeld wrote: How much you can borrow is usually driven by your income and debts. Your rate, and IF you can borrow is more likely to be driven by your score.

But the score you see is not the same that lenders use anyway, so I wouldn't worry about it too much. And as far as that goes, have you ensured that the ONLY thing that's changed is paying off your mortgage? Like, you didn't pay off your mortgage by drawing from an LOC or something?

C
yeah. I've checked the other debts. all good. otherwise, I won't be that confused. I thought paying back mortgage is a good thing or at least it shouldn't hit so much.
Jr. Member
Oct 27, 2018
115 posts
48 upvotes
Do you use Equifax? What description it gave regarding the decline of your credit score? Usually it gives top 3 reasons.
Deal Addict
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Dec 4, 2007
3633 posts
1301 upvotes
Quebec
Even if you have a credit score of 800 or more, if you have an income that does not allow you to repay the amount, you will not be able to borrow more.

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