• eltrain123@lemmy.world
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    5 months ago

    2 of the factors are debt to income ratio and how many accounts of different types are open. If you pay off 99% of a car and refinance 100$ loan for 84 months… does that keep your score up?

    • TexMexBazooka@lemm.ee
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      5 months ago

      So the reason this kinda idiocy happens is when the line of credit is closed, it actually decreases the average age of your credit accounts- which decreases your score.

      That’s why people who pay off student loans have their scores drop sometimes, especially if they’ve avoided any other lines of credit.

      • Snailpope@lemmy.world
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        5 months ago

        This. Average age of active credit accounts went down thus drop. Same thing happened to me

        • JDubbleu@programming.dev
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          5 months ago

          This is part of why getting credit cards early (if you’re capable of being responsible with them) is so important. All my oldest credit lines are credit cards (I have 4 of them), so any future loans will be taking my average credit line down instead of up. As a result I’ll always have those old credit lines and my score will only go up when I pay things off completely.