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I am selling my house, I bought it just over 2.5 yrs ago and am selling and buying another. My question is will selling it, and the inadvertent balance payoff raise my credit? I'm just curious. It would be nice to have a 760 score. I'm at 730 now. Someone mentioned that it could possibly boost it 30 points. I know enough to highly doubt that..... It took me 5 years to build it up to where its at now between making multiple payments on tr same loans everyonth to paying off credit card debt before the statement date etc.
I've never heard that. Odds are your score will drop once the loan is paid off because you will have fewer, and less diversified open accounts reporting.
Your score my gain a few points but it could also lose a few depending on how the rest of your credit profile looks. Whoever said you could boost 30 points either was ignorant or lied to you.
The credit score also includes a component for available lines of credit that would be reduced by closing credit cards, heloc, personal loans etc. You should see some increase for the lower debt, a decrease for the lower number of lines of credit, an increase for the debt ratio, perhaps a decrease for the available credit, etc etc etc.
If you sell your home and obtain mortgage for a new home, you have the opportunity to continue benefiting from keeping a good payment history on a current mortgage. Over time, this can raise your scores.
If you sell your house, you can use money from the sale to pay down or pay off other debts. Even if you lower your debt load by paying off your mortgage, having other high debts can affect your credit score. You can increase the amount of your credit you have available and boost your score by paying off the cards that are closest to their credit limit first.
One way that selling your home can negatively affect your credit is by opting for a short sale. A short sale means you sell your home for less than you owe on the mortgage.
Selling your home in a short sale will cause your credit to drop significantly.
Not necessarily significantly unless 85-150 points is what you mean. They could have had a 780 score and drop to 680 or 700. I know someone who lost only 70 points on a short sale that was reported 3 months late during the financial crisis in 2009. Most lenders report the property to the bureaus as:
"Settled for less than full balance" "settled as agreed,"
"account settled"
"settlement in full"
"Account legally paid in full for less than the full balance"
However, if the homeowner can somehow convince the lender to report the debt to credit bureaus as "paid in full", the impact to your credit score can be reduced a lot. I know that happens rarely but at that phase it doesn't hurt to ask. You may experience just a 30-50 points drop.
Not necessarily significantly unless 85-150 points is what you mean. They could have had a 780 score and drop to 680 or 700. I know someone who lost only 70 points on a short sale that was reported 3 months late during the financial crisis in 2009. Most lenders report the property to the bureaus as:
"Settled for less than full balance" "settled as agreed,"
"account settled"
"settlement in full"
"Account legally paid in full for less than the full balance"
However, if the homeowner can somehow convince the lender to report the debt to credit bureaus as "paid in full", the impact to your credit score can be reduced a lot. I know that happens rarely but at that phase it doesn't hurt to ask. You may experience just a 30-50 points drop.
Do you understand why your score drops more in a short sale vs regular sale? The creditor compromise is the clear reason
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