I’d imagine this is the crux of the problem. Banks need some way to determine if someone will pay back their loans, and what better way than to tabulate their history of doing just that? Should banks be willing to take risks in a system with stuff like the 7 year rule?

[–] Default_Defect@midwest.social 9 points 6 months ago (2 children)

If it was about the ability to pay back loans, then why does it go down when I finish paying the loan? Its about your ability to pay as much interest as possible.

[–] Elaine@lemm.ee 6 points 6 months ago

This. Paid off my house and my excellent credit score dropped by almost 20 points.

[–] biribiri11@lemmy.ml 2 points 6 months ago

Part of your credit score is also the present. It’s more than a bit predatory, but not having any current financial responsibilities looks bad. For example, if you have no loans whatsoever but paid back a bunch in the past, there’s little evidence saying you can currently pay them off. At least, that’s the theory of it.