Paying Off Loans Can Hurt Your Credit
A credit expert says paying off old loans could secretly lower your credit score, a surprising twist for many.
Many people try to improve their credit by paying off old debts. This seems like a smart move. But a credit expert, Micah Smith, warns this can sometimes hurt your score.
When you close out old accounts, your credit history shortens. Lenders like to see a long history of responsible borrowing. A shorter history makes you look like a newer borrower. This can make your score drop.
Smith suggests keeping old accounts open even if they have a zero balance. This shows a long, steady record of managing credit well. This helps your credit score stay strong.
Your credit score shows how reliable you are with money. Knowing these small details can help you keep your score high. It allows you to get better rates on loans and credit cards.
Source: Fox Business
