I paid off all of my debts and sold my house. My credit score only dropped 60pts

[Rotax]

This is still a bit early but 5 months ago, I finished paying off all of my debts and sold my house. I'd always heard that your credit score would drop to zero if you have no active trade lines like be but somehow, 5 months later I still have a 750 credit score. It did drop down 60 points form 811 when I had a mortgage to 750 but, I'm far from being a credit "ghost". Has anyone else had this experience? Thoughts?

[gardeningandgreen]

It is absolutely a lie that it would drop to zero if you paid everything off. The only way you can have a credit score of zero is if you are dead, have no credit at all, or have not used ANY credit products in about 10 years. There are many factors that go into credit like length of credit history, types of credit, and on time payments. So as long as you are using some form of credit like a credit card you will still have a great credit score!

[Rotax]

Thanks Gardeningandgreen! That is what I suspected. I'm wondering if a person would still retain their credit score once they no longer have any active trade lines though? Basically, I'm wondering if their past payment history would still reflect as their score? So far this has been the experience for me but as I said, it's only been 5 months so I guess time will tell! Thanks for your input.

[gardeningandgreen]

You do retain your credit score based on past history. But if you continue to utilize absolutely no credit then you would eventually loose your credit score. With the rewards credit cards and everything out there I would still be using a credit card even if I had absolutely everything else paid off. Maybe even a few to get the best possible rewards!

[Rotax]

You do retain your credit score based on past history. But if you continue to utilize absolutely no credit then you would eventually loose your credit score. With the rewards credit cards and everything out there I would still be using a credit card even if I had absolutely everything else paid off. Maybe even a few to get the best possible rewards!

Thanks. I've been looking at some of the rewards deals that people have been posting and some of them look too good to pass up. I saw one deal that came with 100,000 points which is someone said is about 4 free flights. I'm cautious of using credit but sometimes it seems to just make financial sense if you are disciplined about using it.

[pbkmaine]

My husband and I have no debt whatsoever and our credit scores are over 800.

[zephyr911]

There are a lot of benefits to having open credit accounts and using them wisely. Most cards have no annual fee, none will ever charge you anything if you just pay off monthly, and most have some kind of financial reward. This is an entirely separate issue from whether or not you carry debt.

My husband and I have no debt whatsoever and our credit scores are over 800.

But what's your history like? Most people with high scores have low debt but at least a few open, long-standing, well-managed accounts.

[pbkmaine]

I charge most things but pay off the cards each month. I do not have a lot of longstanding credit, though, since I switch cards around to get rewards. My available credit is ridiculous, more than $100k.

[MilesTeg]

This is still a bit early but 5 months ago, I finished paying off all of my debts and sold my house. I'd always heard that your credit score would drop to zero if you have no active trade lines like be but somehow, 5 months later I still have a 750 credit score. It did drop down 60 points form 811 when I had a mortgage to 750 but, I'm far from being a credit "ghost". Has anyone else had this experience? Thoughts?

It won't drop to zero, but it will take a hit as "active accounts in good standing" counts toward your score. No active accounts in good standing = you take a (smallish) hit. Your payment history and whether or not you've been in collections, bankrupt, public judgement, etc. counts far more in your score. I would suggest singing up for credit karma or a similar site which does a good job of explaining your score, and provides free credit report access to 2/3 of the major agencies.

[TightFistedScot]

There are a lot of benefits to having open credit accounts and using them wisely. Most cards have no annual fee, none will ever charge you anything if you just pay off monthly, and most have some kind of financial reward. This is an entirely separate issue from whether or not you carry debt.

My husband and I have no debt whatsoever and our credit scores are over 800.

But what's your history like? Most people with high scores have low debt but at least a few open, long-standing, well-managed accounts.

Are there different credit score metrics or something? Here in Canada having a credit score in the 700s and higher is considered excellent. At least as far as I know?

I have a score of 750. I pay off all my credit cards/bills on time, and my only debt is a mortgage which is also never paid late.

[Rotax]

My husband and I have no debt whatsoever and our credit scores are over 800.

That's what I suspect is more typical. I work in mortgage and my anecdotal experience had been that when established people have no debt or under 3 tradelines (typically no longer active) their scores are usually in the 800's. It's also been my personal although somewhat limited experience since my credit score is currently 749 and I have no active tradelines but a long history of credit.

[TomTX]

There are a lot of benefits to having open credit accounts and using them wisely. Most cards have no annual fee, none will ever charge you anything if you just pay off monthly, and most have some kind of financial reward. This is an entirely separate issue from whether or not you carry debt.

My husband and I have no debt whatsoever and our credit scores are over 800.

But what's your history like? Most people with high scores have low debt but at least a few open, long-standing, well-managed accounts.

Are there different credit score metrics or something? Here in Canada having a credit score in the 700s and higher is considered excellent. At least as far as I know?

I have a score of 750. I pay off all my credit cards/bills on time, and my only debt is a mortgage which is also never paid late.

Yes, there are different scales. The traditional one is 850 points, though there are different ways of calculating the score depending on which software they are using.

For the general population a score in the 700s on an 850 scale is considered excellent.

At MMM and other personal finance sites, the bar is a bit higher, more like 800 out of 850. It's a game you can optimize.

For fun, I did max out at 850/850, based on Discover's reporting. Since the beginning of summer, I have opened 3 new cards and had at least 1 "hard pull" on my credit report. Depending on where you check (Discover, Credit Karma) I'm 829-835 right now.

...but I have a long and rich credit history (multiple cards over 20 years old) 100% on-time payments, don't keep balances on cards, have a mortgage, still have the (paid off) auto loan listed, have earlier (paid off) mortgages listed, et cetera.