Greentexts, memes, everything 4chan.
What I hate the most is how your score goes down for paying off a loan early. Getting penalized for actually being financially responsible is infuriating. I paid off my car less than 2 years into a 5 year loan and my score went down a couple dozen points. Just because they couldn’t get more money from interest.
Interestingly our poster here has put the reason, I hadn’t thought about it that way, but how valuable you are to creditors is what the score is. Paying off early losses then some money, so score goes down. Hilarious. What an amazing system! ☹️
The system isn't for seeing how responsible you are, it's for seeing how reliable you are.
They seem like similar ideas but they are quite different.
Damn that's really dystopian. It's a credit score that directly measures how profitable you are to others as a human.
The specific rule you point out is stupid but easy to hack. Your score didn't go down because they lost the interest you'd have paid. When you pay off a secured debt, the loaned amount is deducted from your total credit potential, which increases your utilized credit percentage. The hack is to open a line of credit against the secured asset before it's paid off or another line of unsecured credit. Your credit utilization will drop, thus increasing your score.
My score is over 800 and has been for over a decade. I have like 12 credit cards but only use 2 and pay them off every month... Costco for the store and gas and a high cash back card for everything else. The others I keep open with 1 small purchase each year. Every store wants you to have one, so they're easy to get. I have added and paid off multiple small to medium (10-60k) secured loans over the years and my score only fluctuates a little for a few weeks then goes back because my total credit with the dozen credit cards is so large.
I like video games, and the challenges they provide.
The game you're playing is stupid, and no one should have to install that shit.
Good on you got doing it I guess, but it continues to persist, which is problematic.
usually I love to shit on muricans, But Germany has something similar. A private company called "Schufa". This private company secretly calculates your credit score (no one knows realy how they calculate it) which determines if you get an apartment (for rent) or not. Living in the wrong street already kills your credit score here.
If the Schufa doesnt have information about you, it counts as negative.
As someone, who loves dunking on the Schufa, as any good German should. The Schufa-Score isn't nearly as insane as some American credit score systems. Having an registered checkingsaccount & no outstanding bills or debt payments is enough data to have a high score.
You don't need to repay debt to show, that you are able to.
Credit scores are the West's social credit system.
If we value our freedom from a controlling, oppressive system, then we should penalize the creation, selling, buying and usage of credit score data. And we should keep on top of it to include any emerging attempts to re-establish an equivalent system.
I wish we Americans had more backbone to push back on corporate enshitification in general.
For 25 years I've only carried a debt on my credit card one time, and that was for a few months under special circumstances. I have a top credit score.
It's a stupid game, but it's easy to play.
Why do Americans think you need to carry a debt to build credit? That is the opposite.
I put EVERYTHING on credit card, and pay everything off on time. Never missed a payment. My credit score was the highest it can be by the time I turned 21. I've never paid a penny in fees or interest.
That's not what they said, and Americans, in general, do not think that.
Holy hell they sure do. A lot of Americans don't even understand you don't immediately start accruing interest. You clearly have not witnessed the absolute insanity of Americans saying that they use a debit card because they "don't want to pay interest" or they "only spend money they have".
Also the comment you're replying to was likely in agreement with the premise established by the person they were replying to.
I arrived to the US less than 5 years ago and I have top credit score. I never carry a balance, open credit cards that offer a lot of credit, benefits and bonus to increase my available credit (I have about 6 or 7 cards at the moment) and just wait. In less than a year I already had 740 which was enough to get a car loan with 1.9% apr (lowest offered was 1.85%)
You don't actually need a good credit score to get a loan. The only reason FICO scores exist is to reduce the amount of work banks have to do to investigate potential customers. However, many smaller banks are willing to do a manual underwriting, where they look at your history and make a decision based on that instead.
Obviously if your credit score is low that is indicative of poor borrowing habits which will probably be corroborated by manual underwriting. However, if you have no credit history at all, you will probably get a better outcome than if the bank only looked at the FICO score.
Look for community banks, which are very small banks that serve your local community. Those banks are far more willing to give customized service like manual underwriting.
Better credit scores will definitely net you a lower interest rate, though. Zero credit history is a major liability for lenders, so even small banks or credit unions with private investors will want some kind of benefit or incentive for taking on an increased risk of default.
The real fucked up part about credit scores is that it seems like it should be something the federal government regulates, but they don't. For-profit companies do. And when they get hacked and expose all of your data so scammers can assume your identity for eternity, they can't be held liable or responsible. All of that just so lenders can feel safer about who they give money to.
I was just considering this the other day.
Taking this logic to the extreme, wouldn't someone with liquidity but no credit score face serious issues towards accessing housing and services, as per the post?
I'm in this boat and it kind of sucks. I have a lot of savings after a few decades being a programmer, but my credit history consists of nothing but a few late bill payments over the years - never had a credit card or a house or car loan. To rent an apartment I always had to get my brother or father to co-sign the lease, or else I would just rent a room from somebody (which usually never required a credit check). I can't get a credit card from a bank or even cards from stores.
On the other hand, it kind of doesn't suck since I have no debt whatsoever, and I just bought the house I'll spend the rest of my life in for cash. For the last fifteen years I've driven cars I bought for cash on eBay or Autotrader. There were times in my life when if I'd had access to easy credit I would have dug a big hole for myself, and the (very rational) unwillingness of anybody to lend me money saved from financial disaster.
For the most part, it depends on the liquidity.
10k in reserves, you'll get a few chances.
10 mil in reserves, they'll let you fuck them. Rawdog.
owe the bank 1million, the bank owns you
owe the bank 100million, you own the bank
When Equifax had a major leak exposing personal information of millions of Americans I sent them a notice to permanently remove my data from use. To be clear, my Equifax score IS NOT frozen, it doesn't exist altogether.
I refuse to participate in this and I have no idea what my credit score is.
I bought my land and house through owner finance, my debt was to a single individual. No banks involved, no credit check. Obviously this isn't always an option, but it still is an option in some cases, and it's a damn valuable option when it does present itself.
I buy used cars only, either through owner finance or paid in full. No banks.
I have never had a loan from a bank.
By "arbitrarily take on debt for years", are they referring to myth that you need to carry a balance on a credit card to help your credit score?
If you aren't aware, that is very much incorrect. All you're doing is lining the pockets of the credit card company. Pay your credit card statement in full each month and don't carry a balance to avoid paying interest.
There are certain exceptions, but I'm considering them out of scope for this case.
You need to have a form of credit, like a credit card. Even if you pay it in full every month, that's still debt. In my native country almost nobody owns credit cards, just debit cards. I've been living in the US for 12 years now, building credit wasn't that hard, but it took several years, I have almost perfect score now and own a house, but the whole idea was dumb to me too when I started. And I still need to remind my wife that the money in our bank accounts is not really how much we have, because we need to subtract credit card balances out of it.
Are we from the same country? Debt is something I don't understand unless for a home or a car. If I have money to buy a tv, I pay in advance, or I wait until I have the money. I am not judging different points of view, just this is how I was raised
Your "score" is only there to sell you more score. This is the side effect of being able to access your own credit history (how very generous of them)
Every lender has their own criteria, and uses your credit history to generate their own score.
Unpopular opinion, not really opinion but...
Credit score system is designed for the people with money to allow you to borrow that money. It's based on a curve system so... If your at the bottom of the list is because 99% of the population is better than you at learning how to play the score system. Tldr: the score system was not designed with me in mind.