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Huh, I'll have to take a look at mine. I usually just do credit karma. My score has gone up considerably since the years where I was worrying about credit utilization percentages. I'm wondering if it has to do with how many other things you've got going on that also indicate good credit.

In other words, when I was just out of school with shit credit and student loans to pay back, they had very little data on me to determine my "worthiness" or whatever, so my only real option was to open credit cards and to use them maybe?

Maybe now that I've been consistently paying my shit back for decade(s), they don't put as much weight in credit card utilization %?

I wish I had a screenshot from years ago, but it was like the exact opposite. Like some "Your score is low because your 'WELLS FARGO N.A. XX86' credit card utilization is only at 11%. Please increase utilization of this account" bullshit. And all of the links they'd give you were about how you want to keep it at like 30%.

Maybe I'll go to credit karma today and see whats up. I hate credit cards, and I hate carrying a balance but it was drilled into my skull. My credit score is great right now so maybe I should just pay em all off.

Sorry if im rambling, I took a nice strong edible today.

Edit: Is it possible that the discrepency between the 850 and the 826 as reported by Chase (a bank) to be itself the "penalty" as you say?

This is a common misconception. Credit scores are actuarial risk, not profit utility. Having some debt load is a portion of that equation because it basically prevents dividing by zero. This is very basic actuarial science - you cannot produce a risk/utility metric without actually having priors, and within those priors there's a concept of Fisher Information, which measures the likelihood that some sample of a random variable reflects true information about an unknown parameter. Simply put, the more information you have, the stronger the model. So the more debt you manage the more information about your debt management practices is available to the actuary. Up until the point that you have too much debt that it becomes very certain that you are high risk. If you have little credit history, but that history is perfect, you will still usually be in the lowest risk tier, but that might be like 780 instead of 850, or whatever, and that's merely a reflection of certainly within the model, not your actual behavior. A person with similarly perfect behavior, and a lot more of it, should be intuitively seen as a lower risk.

I think it's more accurate to say it's a measure of risk , but it leads to the same result. Good, consistent repayment history means you are a known low risk. Without that consistent and recent history you are an unknown risk. Giving credit to low risk borrowers is where the profit is.

There are many paths to earning profit for a credit issuer. Debt traps are one of the more predatory paths. Some credit issuers want to issue high rated bonds that provide low, but safe, income over a long period. Some don't get profit from interest at all, high-end reward cards, for example. I haven't paid a penny of credit card interest in decades yet I'm issued cards that provide me with over $20k in benefits every year, these companies make almost all of their money off swipe fees charged to the merchants and partnership deals.

It absolutely is "a measure of how likely are you to pay off your debt", because that is "a measure of how likely you are to earn creditors money."

It's not some grand conspiracy. It's a record of previous behavior to predict future behavior to determine if you fit their business model.