FICO Going Up With No Debt?

Scott noticed his FICO score has gone up since he got completely out of debt, including his mortgage. The last account was closed in 2009 with no activity since then.

QUESTION: Scott in San Antonio has noticed his FICO score has gone up since he got completely out of debt, including his mortgage. The last account was closed in 2009 with no activity since then. Dave finds this strange since it should have disintegrated.

ANSWER: This is the first one I’ve heard of. It should have disintegrated. It’s an excellent credit score. It makes no sense whatsoever. The truth is, I don’t know how to answer that. I don’t know how that’s happened. The only thing I can think is that you’re missing something on your bureau and something’s still open that’s ticking along.

I don’t know what to tell you. You got me. At least it’s not frozen at 575. It’s not hurting you at this stage of the game. There’s nothing wrong with having a 775 credit score. You don’t have any debt. You’re not borrowing money. The algorithm that produces the credit score, according to their website, is all interaction with debt, and when interaction with debt all ceases, it should go away. I think it’s just a fluke. It may be a mistake. You may look up one morning and it goes to zero instantaneously. That’s all I can think of. They just haven’t found it or something. To find out that they were both inefficient wouldn’t be a surprise.

The truth is, Scott, I don’t know. I don’t know what’s going on with it. It’s a little strange. The good news is it’s a great score. If you needed a credit score for something, like your car insurance or something, it’s not being dinged up, which is great. Have at it, baby.

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