Dramatic credit score drop

[Deleted User]

Hi all, 
Had a quick query, I got a bit of help over on the credit scoring board but thought I'd check back here for the more mortgage related aspect.
so, recently applied for and was offered a mortgage from Halifax had a good credit score (irrelevant,I know). As per my agreement with them I cleared my credit cards and loans down to a zero balance. Well, yesterday these zero balances showed up on my credit file and my credit karma score dropped 11 points from 625 to 614. Then this morning at 5am (coz I am that sad that I check my score at 5am lol) my previous mortgage came off my credit file as we sold our house and are now living with parents. My score then dropped a further 41 points!! To 573. This takes me out of good and into the fair category. I have zero credit balance and the only changes I have made are clearing the balance and mortgage.

my questions are

1) would paying off debts cause the score to drop this much??
2) do lenders see the actual score?

3) will this data have a negative effect on a Halifax mortgage if they restore me just before completion?

Can't believe it dropped so much by me doing positive things.

thanks all in advance 

[Deleted User]

Your score is entirely made up. It has no more impact on lending decisions than your horoscope.

As explained in your other thread, clearing debts cause the score to drop as credit scores generally react negatively to change. It doesn't matter if that change is good or bad.

Lenders will only look at the data on your files. 

[Deleted User]

Deleted_User said:

Your score is entirely made up. It has no more impact on lending decisions than your horoscope.

As explained in your other thread, clearing debts cause the score to drop as credit score react negatively to change. 

Lenders will only look at the data on your files. 

Thank you. It's just mega scary to see such a massive drop. You hear stories of mortgage offers being pulled due to changes in circumstances after they have been rescored. I guess I was just worried that this could be a cause. Regardless of if my circumstances changed or not. Logically I know the score doesn't matter but it's mere presence on my file was enough to spook me a little

Kirkii27

I’m the same my credit score was good now it on fair and I owe absolutely nothing on my credit file. Not sure why it keeps dropping every month. It’s annoying me. Mines 558 on credit karma 

[Deleted User]

Sorry, just to clarify so I can finally go into a weekend without stressing (it's been a helluva six months)

whilst me paying if these debts has caused a credit score drop, this would actually be a positive if the lender rescores me as I have less debt than I had when I applied? It wouldn't throw off their system like it did with credit karma?

am I right in thinking that lenders are on the look at for big changes in borrowing like taking out additional credit or getting a loan and won't be concerned with me paying of debts?

[Deleted User]

Also my previous mortgage was paid off and the account closed this last month. This has finally been reflected on my credit report. Would this be an issue for the Halifax algorithm? Or is it mainly based on affordability?

[Deleted User]

Kirkii27 said:

I’m the same my credit score was good now it on fair and I owe absolutely nothing on my credit file. Not sure why it keeps dropping every month. It’s annoying me. Mines 558 on credit karma 

Kirkii27 said:

I’m the same my credit score was good now it on fair and I owe absolutely nothing on my credit file. Not sure why it keeps dropping every month. It’s annoying me. Mines 558 on credit karma 

It's really strange, doesn't seem to be any rhyme or reason

Kirkii27

Mine goes up and down every month. I paid off all my debts the other month and now my credit score fair but was classed as good when I had the debt on my account. Just annoying. Maybe it’s just so people login onto the websites 

[Deleted User]

kal-el said:

Sorry, just to clarify so I can finally go into a weekend without stressing (it's been a helluva six months)

whilst me paying if these debts has caused a credit score drop, this would actually be a positive if the lender rescores me as I have less debt than I had when I applied? It wouldn't throw off their system like it did with credit karma?

Correct.

Clearing debt is a good thing if you want lenders to view you as credit worthy. It's a bad thing if you like collecting large 3 digit numbers.

You can either impress lenders or the CRAs. Not both. But only one of those groups will assess you for credit and decide whether to lend to you.

MovingForwards

kal-el said:

Also my previous mortgage was paid off and the account closed this last month. This has finally been reflected on my credit report. Would this be an issue for the Halifax algorithm? Or is it mainly based on affordability?

Mortgages are based on affordability and credit history.

The scores we see go up and down with any change eg clear a CC, open a current account. Lenders have their own internal algorithm methods for scoring applications.

[Deleted User]

Thanks for the responses. I'm not too bothered by the score, I was more worried that these changes would cause enough of a change if Halifax rescored me before releasing the mortgage funds. Glad to hear it shouldn't be an issue. I've done everything right since taking out the mortgage. Cleared debt to zero and not taken any additional credit out