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Lucy, Esq.
Lucy, Esq., Lawyer
Category: Consumer Protection Law
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Experience:  Lawyer
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CREDIT REPORTING BUREAUS REQUEST 1. What are my options for

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CREDIT REPORTING BUREAUSREQUEST
1. What are my options for rectifying a recent change in my credit reports as a result of paying off a mortgage loan.
2. How do I expedite retrieving the +50 points lost as a result of the previous loan payment payoff?BACKGROUND
Last week I refinanced a loan held for 10 years. After the loan was paid off, it was reportedto the bureaus as "closed". Therefore an Equifax 753 credit score fell to 687; A Transunion score of 754 fell to 714.CONCERN
There were no late payments of the previous mortgage loan, however I lost that record of good payment reporting for over 10 years. Now my only payments reflected are for 5 year cards with low balances.

Hi,

I'm Lucy, and I'd be happy to answer your questions today. I'm sorry to hear that this happened.

The loan IS closed because it was paid off. Because it's accurate, that's unfortunately not something that you can have changed. There are multiple factors that go into credit score, including the age of open accounts, types of accounts, and total credit utilization. If the mortgage was the only installment loan you had on your credit report, paying it off unfortunately decreases your score. Adding a loan account would bring your score back up.

Another option is to increase the limits on your credit cards. Part of your total score is credit utilization, and a person who low credit card balances and high limits will have a better score than someone with low balances and low limits. But I'm afraid there's no cause of action against the credit bureaus for accurately reporting that you paid off a loan, even if that made your score drop.

Credit Karma has a tool that lets people play with different scenarios and see what will change their credit scores. That's a free service, so it might be worth looking into. This is a free service (no card required for sign up).

www.creditkarma.com

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Customer: replied 5 months ago.
Thank you very much. Yes the refi-loan replaced the old loan....however, no history established. So I will try the tool....but it is tough to get new credit with a low credit score now (758 to 658)...what a hit!