Maybe instead of taking even more of our personal data, they should worry about fixing the algorithm they run on the data they already have. For example, paying off an auto loan shouldn't make your credit score drop 60 points.
Why shouldn't it? The credit score is a tool to provide a measure of how profitable you can be to lenders. If you're paying off loans, you are a less desirable customer than those who carry loans. The lower score reflects that.
This is the same system used for Internet contracts, buying work tools, renting apartments and buying houses.
If you can afford those things more safely, you should be considered less desirable? Instead, it's the people who are likely to be in debt until death that are better?
But I guess, yeah, fuck society, get rich while you can.
FICO credit scores aren't intended for tenant assessment - it's just a lazy option some landlords do. The credit companies have dedicated products for such a use case (https://www.mysmartmove.com/).
Realistically, paying off a loan rarely hurts credit scores. And realistically, someone with years of paying off credit cards on time is going to have a high credit score (at least high enough for things you describe), outstanding debts or not.
> If you can afford those things more safely, you should be considered less desirable?
If you can afford to leave, then yes, you are less desirable than someone who needs to stick around. These services are priced based on the assumption of long-term engagement. If you cut that assumption short, the expected revenue is also cut short.
Finding new customers is expensive. When you leave, the provider needs to find a new customer to replace you. They are much better off keeping existing customers. The credit score gives an indication of how likely one is to remain a customer. Those who are most likely to stick around are the best kind of customer.
When you paid off your loan, you also stopped paying the associated interest. In other words, you retracted your patronage and stopped being a customer. This is not desirable for a business. The credit score was reduced to reflect that. 60 points is very little movement. It is not like they're writing you off as a compete undesirable with that, just statistically slightly less desirable than someone who continued to borrow.
Remember who pays for credit score information: Lenders, not you. They are the customer. It is there to benefit them, not you.
The system before credit scores was even worse. Human bankers used subjective judgement subject to individual biases. That system was unfair, inaccurate and difficult to scale. How would you replace or improve credit scores?
Personally, I'd like to have much more control over who can view my credit data and for what purposes.
