AP: Credit scores can drop after getting loan help:
"The best way to build credit back is to continue to pay bills as agreed, to use credit wisely," said Tom Quinn, vice president of scoring solutions at Fair Issac Corp., which designed the well-known FICO score system. "As time goes on, the score gradually increases."
Back in the old days, the best gauge of what we now call 'creditworthiness' depended on comparing how much you made and saved against how much you owed. But since there were no such things as 'credit cards' for we ordinary mortals, every single bill that came in the door went back out with a check attached. If you had any money left over, you generally put it in savings. The bank was where you went for money for business, or to buy a home. (GMAC helped you buy that new BelAir). Make all your payments on time, you were considered a 'good risk'.
What's changed? What hasn't. These idiot financial 'ratings companies' have managed to completely reverse what constitutes a good credit risk. Now you *must* have credit, be in a state of constant debt, and carry cards with userious rates to get a *high* credit 'score'. Bass-f*cking-ackwards.
These guys punish people for doing the right thing. Pay off all your credit cards? Fine. Shred them? Go to the penalty box. Consolidate debt and reduce your interest rate by 50%? Fine. Pay off the debt early and build your savings account? That'll cost ya 100 points.
Whoopee.