Selling&Paying off mortge within first 4y decreases credit score

[Najat F Kessler]

My credit score dipped 40 points after the bank reported that my mortgage was paid off. I had an excellent score well over 760s and I was surprised to find out in the last day or two that it went down 40 points. It drove me crazy and I looked and called everywhere. I finally called the bank that had my mortgage and asked them why they reported negatively on me after I paid them off. They replied that they did not. I keep looking at my credit karma and it clearly shows the mortgage payment in red as if it was a negative occurrence. I looked at my accounts 100 times and it finally hit me today as I am staring at CREDIT HISTORY that is showing in red and has the exact age of my just paid off mortgage! I did not know that this was a thing! My credit score still dropped 40 points because I got rid of a mortgage within the first 4 year, that was supposed to last 30 years and was an arm that would have gone up next year. 

My score is still way over 700s and it will go up some more next week, because the $21000 debt that was still showing has been paid off (and I verified and confirmed that it was reported this week).

Did anyone else run into this? How did you handle it? Can the experts enlighten me about how this works?

Does this mean that I was supposed to buy a property before closing on the house I sold?

Please enlighten me.

Thank you!

Najat