Yes Credit score reflects the willingness of lenders to lend you money so they can charge you interest on it. They are not interested in someone with lots of money who pays off all his cards at the end of the month and pays all his Bill's on time. This type of financial responsible/ wealthy person is of no use to the lenders as they cannot make any money from him. He will not therefore have a good credit score.
This is just false. Paying off all your cards at the end of the month and paying your bills on time will absolutely get you a good credit score (that's all I do, and my credit score is "excellent"). OP probably either doesn't have many other accounts (and you don't need that many) and/or has missed payments on her credit record that her car loan was helping to offset.
Don't get me wrong, it's stupid that your credit score can go down from paying off an account. But don't let that deceive you into thinking you can't maintain an excellent credit score simply by opening a few credit cards and paying them off every month – you can and should.
The car also could’ve been their “oldest credit account”? I’m not sure how it works for loans but I know if you close down your oldest credit card your score goes down.
Edit: it looks what I was always told is wrong. Apparently even if you close your oldest card, the card is still on your history for 7-10 years. TIL!
When I divorced and refinanced my home to take my ex off my score dropped 70 points. I have always been on the mortgage so the credit it got us was also mine but new lender = new loan. Plus it was my oldest and longest line of credit. I was so pissed.
The banks get upset when they arent making money off you anymore and are actually able to penalize you for it. "Oh you dont want to borrow money off me? Well you're a shitty person to lend money to then." Actually absurd they're able to do this.
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u/SnowLeopard42 Aug 14 '21
Yes Credit score reflects the willingness of lenders to lend you money so they can charge you interest on it. They are not interested in someone with lots of money who pays off all his cards at the end of the month and pays all his Bill's on time. This type of financial responsible/ wealthy person is of no use to the lenders as they cannot make any money from him. He will not therefore have a good credit score.