> can lead to maxing out while being perfectly comfortable financially.

Total credit usage can have an impact. So if all your lines of credit are at maximum, this is a negative signal. If one or more is, but your total utilization is 75% or less, it should have little to no impact.

This is why the installment loan part is useful. It starts at maximum balance and you immediately pay that down. It's not as strong of a positive signal until you hit payoff but it's a pretty massive one the day you do.

>Lack of money is only one of the possible reasons for those situations.

As far as a lender is concerned, if you don't pay back your debts you might as well not have money even if you actually do.

>Entities with tons of money seek loans all the time for liquidity and risk mitigation.

And each and every one of those inquiries will lower your credit score, because you're taking on more debt. Do you have money? Will you pay the debt back? The more inquiries there are (the more you ask for loans) in a given span of time, the less likely it is you have money and will pay debts back.

>Nope, lack of understanding how CC scoring works (scoring designed to keep you in the credit mill) can lead to maxing out while being perfectly comfortable financially.

Banks hate seeing lines of credit maxed out. Ask any banker worth his salt and they will all tell you the same.

If it wasn't obvious already, banks don't like lending money. That might sound strange, but for a bank (the lender) a loan is an investment and investments are risks. The more loans (debt) someone has, the more risk they are carrying and thus their credit score will reflect that.

>What in tarnation.

A line of credit in good standing that has been open for a long time means you've been making your payments properly, meaning the risk of lending money to you is lower than someone who does not have a line of credit as old. Thus, your credit score will be higher.

The age of your credit is usually determined by your oldest open line(s) of credit. Closing an old line of credit means it will eventually fall off your credit report and stop being reflected in your credit score, which will fall to reflect the new and younger age of your credit.

Again: Everything about credit score is solely about the risk you might pose to a lender. Anything that increases that risk will lower the score, and vice versa, even if it's just an implication.

This is an edge illogical case. Like technically you can sell your apple shares for $5/share, but no broker even has the functionality to let you voluntarily take a loss.

When someone with money defaults on a loan, it's usually because a.) they don't actually have money or b.) the loan is for their company, not them.

All that to say that "having money" is functionally equivalent to "propensity to pay".

FICO considers hard inquiries (other than for credit card applications) within 45 days of each other to be just one hard inquiry.

Yes, but the reason they say to do all the inquires around the same time is b/c many inquires spread out is a negative signal. It can mean that banks are turning a borrower down for whatever reason so they are now looking for a bank to take on the risk.