How a Transferred Mortgage Account May Impact Credit Scores

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Dear Experian,

My home mortgage was sold by the lender to another bank. My credit report is showing that the account from the original lender is closed, and I noticed my score dropped. All of my payments have been on time. I read that there is no negative impact from these types of transfers and that your score simply reflects if all payments were made as agreed to before and after the transfer. If that's the case, why did my score drop?


Dear GLV,

There are many different factors that go into calculating a credit score, so it's difficult to determine why your credit scores may have dropped without seeing your report. The change may have had nothing at all to do with the transfer of the mortgage to another lender.

You are correct that having a closed or transferred account is not considered negative. However, any time there is a substantial change to your credit report, you may see a temporary dip in credit scores until your credit history stabilizes.

Closing an Account May Affect Credit Scores

You didn't mention whether the account with your new mortgage lender is already appearing on your credit report. Open mortgage accounts in good standing are generally good for credit scores. If your old mortgage loan is no longer showing open and active and the new account is not yet appearing, your credit scores may fluctuate again once the new account is added to your reports.

If there have been no other changes to your credit history, you may find that your credit scores return to normal soon, once your credit history has a chance to stabilize.

Contact Your Lender If Your New Account Is Not Appearing

Generally, lenders report new accounts to the credit reporting agencies after the first billing cycle, usually within a month or two. You can contact the company who purchased your account and ask when you can expect the new account to be reported.

Addressing Score Factors Can Help You Improve Your Credit Scores

In the meantime, focus on the credit score factors that were provided to you when you ordered your score. These factors will help you understand what is impacting your score the most. Although there are many different credit scoring models, these factors tend to be very similar from one model to another. By addressing these factors, you can make positive changes to your credit history that will help boost all your scores.

Thanks for asking,

The "Ask Experian" Team