@SouthJamaica wrote:
I have heard before all of the justifications being proffered in this thread, and not a single one of them stands up to the slightest scrutiny. Your credit report shows many many years of your credit experience, and no one would look at the presence of current balances to determine that you have an excellent track record in timely repayment.
The most recent data is always most meaningful. What's on one's credit report from last month is more valuable than last year, 5 years ago, 7 years ago, 10 years ago. That being said, someone with no open loan has no current data showing that they have the ability to manage and repay a loan, now. If they have a past paid off loan that's great and they're still being rewarded for the satisfied credit mix as a result... but why would they get additional bonus points for showing that they have the [current] ability to pay on a monthly installment loan if they don't currently have such a loan? If someone has a (say) 5 year loan that's down to its last couple of payments and they have perfect payment history over that span of time, I do believe (as the algorithm does based on score) that they are exhibiting the strongest creditworthiness with respect to an installment loan based on their current payment history on that open loan.
I just think too many people get hung up on "losing" points for closing a loan when you don't see them cheering for the points gained in the first place. How about we just don't give the points out in the first place then, so then there's nothing to lose. Does that make it more fair?
