CORRECT ANSWER:

  • Mary's credit score will go up.

  • Mary's credit score will go down.

  • Mary's credit score will not be affected.

Pro Tip to keep in mind:

Just like Mary, you might think you're doing the right thing by paying off an old account. However, this can flag "recent activity" on a past delinquency in your credit report. Underwriters could see this as a current issue, not something that happened years ago.

Always consult with your lender first; that money might be better used for a down payment or kept in savings.

Watch the video above and answer the question when it's done.

What effect might this transaction have on Mary's credit score?