• Dkarma@lemmy.world
    link
    fedilink
    arrow-up
    9
    arrow-down
    3
    ·
    1 year ago

    That’s not why it went down. It probably went down because they had less credit extended to them after paying off the loan. How much credit you’re using affects your score.

    They don’t care that u paid it off early. They care that your loan to income ratio just took a hit.

    • Trantarius@programming.dev
      link
      fedilink
      arrow-up
      7
      arrow-down
      1
      ·
      1 year ago

      That doesn’t really make sense either. Why would a high amount of debt relative to income be a good thing? How does it indicate a person is more likely or capable of paying off a loan? If anything it means the opposite.

      • Jax
        link
        fedilink
        arrow-up
        5
        arrow-down
        1
        ·
        1 year ago

        Because it’s a racket

      • SCB@lemmy.world
        link
        fedilink
        arrow-up
        3
        ·
        1 year ago

        A high amount of debt to income is absolutely a bad thing, both in life and for your credit score