The source explains the seemingly contradictory phenomenon of a person’s credit score dropping immediately after they pay off a large amount of debt, an event often called the Post-Payoff Credit Score Drop. The text asserts that credit models do not reward simple debt freedom but instead favor predictable, low-risk behavior signaled by active account management. The episode identifies four primary reasons for this score decrease: a sudden drop to zero utilization, which removes a crucial credit utilization "buffer"; closing old accounts, which instantly nukes the average age of accounts; disturbing the necessary balance of revolving and installment credit mix; and the inherent reporting lag and scoring model recalibration period of 45–90 days. Finally, the source offers immediate fixes for these issues, such as maintaining a small 1–6% utilization on at least one card and never closing old accounts, ensuring a quick recovery within three months.