Credit Scores Reward Debt, Not Virtue

Have you ever paid off a car loan and watched your score drop? That wasn’t a glitch.

That was honesty. The system was telling you, “You were more valuable when you were paying

interest.” The credit score is not a character test. It’s a loyalty program

for debt. Let’s break down how it works, because ignorance here is expensive.

About 35% of your score is payment history. Miss once, and the stain can

follow you for seven years. Another 30% is credit utilization—the percentage of your

available credit you’re using. Spend $500 on a card with a $1,000 limit?

That’s 50% utilization. The algorithm panics. But raise that limit to $10,000 and spend the same $500?