Hegemony's score tanks!!!! removal of last installment line

[hegemony]

Seems it has been 10 years since paying off our mortgage. An older me would have been appalled. Still seems weird that having a mortgage obligation makes someone a better relative risk. 

 

[trachkids]

Ugh. I am not looking forward to that day.

 

So few things in this world make any sense any longer. 

[MP80]

Fair Isaac Corporation’s FICO credit-scoring algorithm is biased toward creditors and lenders. If consumers wish to avoid incurring a punitive score reduction of more than 30 points, they must hold some form of installment loan to gain "immunity effectively."

 

You said: "How is it that carrying mortgage debt actually makes one a relatively lower-risk borrower?"

 

GEORGE once says: What's my driving got to do with my credit? 

Edited April 6 by MP80

[Flyingifr]

23 hours ago, hegemony said:

Seems it has been 10 years since paying off our mortgage. An older me would have been appalled. Still seems weird that having a mortgage obligation makes someone a better relative risk. 

 

Count your blessings. When I paid off my mortgage I lost 60 points. The following month I paid off  my car loan and lost another 40. In the span of 60 days I lost 100 points and gained $3,000 a month in disposable income to not make payments with. Since I would no longer be paying my mortgage or car loan, FICO branded me a terrible risk. I had to go out and get $50,000 in credit card lines to start getting any of those points back.

Edited April 6 by Flyingifr
Clarify my disposable income increase

[chicagorich]

Didn't somebody on here try to get around this by paying down their mortgage and then having the smallish balance recast to a small monthly payment to keep the account active?

[hegemony]

12 hours ago, chicagorich said:

Didn't somebody on here try to get around this by paying down their mortgage and then having the smallish balance recast to a small monthly payment to keep the account active?

I vaguely recall this. was it @cv91915?

[Flyingifr]

12 hours ago, chicagorich said:

Didn't somebody on here try to get around this by paying down their mortgage and then having the smallish balance recast to a small monthly payment to keep the account active?

The TL wouldn't make much sense. $1 a month for 30 years? Only a computer would count that as creditworthiness.

[cv91915]

1 hour ago, hegemony said:

I vaguely recall this. was it @cv91915?

 

 

 

My payment was initially $2.80.  

An ARM is a ticking time bomb. 

[laynlow]

8 hours ago, cv91915 said:

 

 

 

My payment was initially $2.80.  

An ARM is a ticking time bomb. 

About $3 per month in interest.  Who can put a price on good credit?

[hdporter]

13 hours ago, hegemony said:

I vaguely recall this. was it @cv91915?

 

I more than "vaguely" recall this.  I was prepared for him to tattoo this fact on his forehead  .

[hdporter]

On 4/5/2026 at 1:22 PM, hegemony said:

Seems it has been 10 years since paying off our mortgage. An older me would have been appalled. Still seems weird that having a mortgage obligation makes someone a better relative risk. 

 

Having a mortgage doesn't make you a better risk.  However, as a whole, present/past mortgage holders manage their credit better than those without a mortgage and you're no longer riding their coattails  .

 

Of course, your actual risk profile hasn't changed at all.  Credit scoring, however, can only evaluate based on what's present in your report.

[StarkRaven$]

On 4/7/2026 at 8:09 AM, cv91915 said:

 

 

 

My payment was initially $2.80.  

An ARM is a ticking time bomb. 

Ingenious!

[Krish]

I was excessively obsessed with perfect score and had paid off several accounts before the statement is realased.

 

That was old.

 

New me - dont care for credit score anymore, only care to maximize my finances while not paying high interest or no interest at all. Only worry when the score dips below 800.

[cashnocredit]

On 4/11/2026 at 8:49 PM, Krish said:

I was excessively obsessed with perfect score and had paid off several accounts before the statement is realased.

 

That was old.

 

New me - dont care for credit score anymore, only care to maximize my finances while not paying high interest or no interest at all. Only worry when the score dips below 800.

 

Me too! I also noticed a drop that averaged about 15 when a paid off mortgage I'd co-signed long ago fell off. I only have CCs. While I never carry a balance, I have fairly high balances reporting, averaging about 10% of my total lines. Might have been a bigger drop If I bothered to maximize FICO but I have only done this a few times over 2 decades to see the effect. FICO's average just over 800 but bounce around a lot from large balance changes. I've never had any adverse action other than cards that didn't renew when I stopped using them thinking debit cards were simpler with no monthly bill. That was really dumb of me but at the time I had no idea how credit worked. Like trying to rent a car with a debit card (hard). Then I had to start from scratch with no credit history.