You don’t understand how credit scores relate to loans then, let me help you.
The credit score is not just how likely you are to repay your loan. It’s how reliable of a borrower you are. They spend resources analysing the transaction, then allocate some funds for you with the expectations that these funds will be returned given a certain schedule. When you repay too fast, it’s not what’s happening.
Try to see it the other way around. If you were keeping some funds on-hand to lend, and you spent the whole evening deciding if you’re going to lend me 10k$ for months. You decide you will, and you’ll make 500$ out of it. Not a bad deal: these funds would come at you 300$, so you spent your evening for 200$. Great!
Two days later, I bring you back your 10k and 10$ of interest.
It means you spent your whole evening for 6$…
If I do that to you a few times, I guarantee you that you won’t like me as a borrower.
You don’t understand how credit scores relate to loans then, let me help you.
The credit score is not just how likely you are to repay your loan. It’s how reliable of a borrower you are. They spend resources analysing the transaction, then allocate some funds for you with the expectations that these funds will be returned given a certain schedule. When you repay too fast, it’s not what’s happening.
Try to see it the other way around. If you were keeping some funds on-hand to lend, and you spent the whole evening deciding if you’re going to lend me 10k$ for months. You decide you will, and you’ll make 500$ out of it. Not a bad deal: these funds would come at you 300$, so you spent your evening for 200$. Great!
Two days later, I bring you back your 10k and 10$ of interest.
It means you spent your whole evening for 6$…
If I do that to you a few times, I guarantee you that you won’t like me as a borrower.