Which is better for your CREDIT score: Paying off your credit cards, or paying off your mortgage?

Most people say they would pay off their mortgage to increase their credit score the fastest. But when it comes to CREDIT scores, eliminating credit card debt is far more powerful than eliminating mortgages and car loans. Most people don’t realize that their mortgage actually doesn’t even report on the credit bureau, unless of course it’s with a Credit Union or it’s a secured line of credit.

When assigning a credit score, the scoring bureaus assess risk by asking one question: How likely will this borrower default in the next two years?

Most people prioritize their mortgage payments; they would rather skip a few meals than lose their home. So having a balance on your mortgage isn’t really that risky. But people aren’t quite as responsible with their CREDIT CARDS. In fact, even the most financially responsible people make a few bad decisions when it comes to the allure of credit card spending.

So keeping a low balance (or no balance at all) on your credit cards is a far better indicator of your financial situation, and your ability to pay upcoming bills. Not to mention the fact, keeping your debt utilization ratios low, has a positive effect on your CREDIT SCORE

The moral of the story: If you want to increase your CREDIT SCORE score, get your credit card balances under control!

Indeed, if I had to give a person only one piece of advice, it would be: “pay down your credit card balances.” Plus, once you pay down your credit card balances, it will be a lot easier to make those mortgage and car payments!

To Your Success…Always!

Mark Fidgett is a Vancouver mortgage broker and the driver behind


Your Vancouver Mortgage Broker For Life 604-273-2002


P.S. Who’s the next person you know who wants to save thousands off their mortgage? Be sure to give me a call so we can help them! 604-273-2002