Remember that your credit score doesn’t exist for you. It’s not for your benefit. It’s for the benefit of lenders, and they don’t give a damn how unfair the system is.
This is what people are missing. Credit score is a completely valid metric, but it’s just a measure of how likely lenders are to make money off of you.
What I don’t get is: since she paid off her car loan, she’d have more disposal income now…? Shouldn’t that increase her credit score?
There’s a mess of things that go into their formula, but as I recall one of them is actively paying on things. We had our daughter get a credit card and told her that, instead of using her ATM all the time, she should use the credit card, but pay it off every month. Doesn’t cost her anything to do that, and it builds a credit rating way more than having a card with a zero balance. Doing that, they’ll also end up raising your limit, which increases your rating too. Oh, and if you pay your credit bills as soon as they come due instead of just before the deadline, that also increases your rating.