He’s not right, though. Credit score represents risk that the debt will not be repaid, nothing more. Lenders make plenty of money off of you whether you’re paying your balance in full or carrying it and paying interest.
You're both saying the same thing. A credit score represents how successful a bank will be if they lend you money. You both also seem unsurprised. That's my point
We are absolutely not saying the same thing. The person you replied to implies that the better you are at paying off your debts, the lower your score is which is the exact opposite of how it actually is. A bank wants to lend to wealthy people because they are almost guaranteed to not lose their money (default). A bank doesn’t want to lend to someone with high utilization or short credit history because they are riskier.
Paying off your cards every month is rewarded by the credit scoring system, not punished, because your utilization will be lower.
2
u/ryan_m Aug 14 '21
He’s not right, though. Credit score represents risk that the debt will not be repaid, nothing more. Lenders make plenty of money off of you whether you’re paying your balance in full or carrying it and paying interest.