How Paying Off Your Mortgage Affects Your Credit Score

MoneyTips

Congratulations! You've just finished paying off your mortgage – probably the largest debt you'll ever have in your life. Should you expect your credit score to increase as a result? Not necessarily.

Your credit score is calculated from your credit report, a history of all of your borrowing and payment activity. While your mortgage was probably a huge part of that history, it's just one part. Credit reports also consider other installment loans, your credit card payments, and any payments for non-borrowing related charges (like cable or utility bills) that have gone into collections. Every account matters and contributes to your credit score.

Consider the factors that go into calculating a credit score, starting with payment history – the most influential factor. Mortgages require regular payments for a long time. With those payments removed, that's one less regular payment that proves you...

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