Why does credit score drop after paying off a loan?
In: Other
Credit scores look at a few factors like total accounts, history, inquiries, revolving utilization, and missed payments. Paying off a loan (aka closing a line of credit) dings a few of these factors like total accounts and history. There, that’s it.
Every time credit scores are brought up, you got the dumbest of the dumb trying to conspiracy theory their way into confirming their biases. No, it’s not about keeping you in debt. You can have a single credit card open and use it to buy your avocado toast or whatever overpriced shit you people (people that have near 0 financial literacy) like to buy a month, pay it off, and your score will go up with time.
Latest Answers