I asked very poorly. My fault. I meant, how does paying off a vehicle lower your credit score? I don't understand how that could happen.
Your credit score is basically a measure of how much interest they can squeeze out of you. When debt goes away, your score drops.
Their excuse is that your mix of credit variety has reduced, and the average age of your open accounts is lower. It does not matter that you paid off your debt, debt free people do not pay them interest.
Therefore, if you go get a new car and roll the last few payments into buying a new one they will give you even more money and a better interest rate. on top of this, you're probably going to trade that other car in since they forced you to either incur more debt or be lent less in the future. Then they get to charge someone else interest when the dealership resells your trade in. Dare to be responsible, and they will punish you. stay in debt, and they will reward you.
https://www.moneyunder30.com/paying-off-an-auto-loan-is-bad-for-your-credit-score
Never rolled a single debt.
Me neither, but i get to watch the score fall after paying off loans or car payments with 100% on time payments.
Think of it as punishment for paying more/faster than the agreed upon payment plan with applicable (((interest rate))) in the contract. Kikes fucking hate it when you skirt their usury by ending the process sooner.
even if you pay it off as agreed your score will drop unless you have a significant amount of other open accounts
I think it's pretty well known that having a bit of debt increases your credit score. For instance, if you've never borrowed then you have no credit score which is considered bad credit. I don't know if anyone's precisely punishing you; it's more that you're not gaming the model as well as you possibly could. If you borrow and pay on time, AFAIK you will have a good credit score. It may not be as high as someone who actively manages it.
Your credit score is a measure of your long-term profitability to lenders.
So if you borrow money for a car, and then pay it off very quickly, you are not very profitable to the lenders who were hoping to make money from the interest on the loan they gave you.
You will have a higher credit (profitability) score if you maintain regular payments of debt over long periods of time, because that means lenders are making more money from you.
Credit is not a measure of your trustworthiness with money, it's a measure of your potential for banks to make money from your debts.
That summarize it well enough?
I don't have issue with you analysis insofar it's a profit rating. But I've paid off every car I've owned early and have a near perfect credit score.
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