Anon on credit scores
Anon on credit scores
241 comments
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A lot of people think social credit scores are something society can't function without, but they only started in 1989.
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I certainly have problems with the way current financial institutions operate, but prior to the credit score there wasn't a standardized, scientific way to assess lending risk. It was left to a good ol' boy process rife with racism, classism, and sexism. Sadly, we're better off with what we have now, as flawed as it is.
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There still isn't a standardized and scientific way to assess credit risk. There are three major companies, several minor ones, and all of them offer multiple products.
IT'S ALL A FUCKING SCAM. We just blindly accept random institutions compiling all of our data and telling a bank whether or not we should be given a loan regardless of our ability to pay it back. It has little to do with income anymore, which should be the only allowable metric. Don't want the risk? Get the fuck out of the mortgage business.
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It seems to me it doesn't count risk. It counts profitability. It's why it drops when people pay their loans early.
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And now it's time to nix what we have for something better, just like we did before.
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Why would you be better off? In the rest of the world you just have to provide proof of income and proof of savings and debt and banks can calculate how much they are willing to loan you for the purchase of a house. Seems to work fine, and I don't have to have pay interest on meaningless loans just to prove that I can.
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If you don’t take credit facilities but pay for your expenses in cash, you are considered a risk. Credit scoring based on credit card purchases is akin to being required to be spied on every step of the way just so you can access what you practically can without the credit in the first place. I don’t have a problem with people who are fine with that kind of behavior. But there should be a way of fair assessment even if you pay in cash.
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Yeah. It's really changed a lot...
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At one time you walked into a bank, showed how much money you made, and got a home loan.
But that allowed too many Black people to buy homes, so credit scores were invented as a way to discriminate against people using a black box with no real published metric.
Yay for redlining under a different name!
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It's funny how the other person who replied to me said credit scores are actually the solution to racism. I think you're the one who's right it's just funny. I'd like to take this opportunity to say it's retarded that you can pay rent for years but not be approved for a mortgage with equal or lesser payments.
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You're showing way too much faith in the institutions that invented the red lining in the first place to imply that the ol' boys club system wasn't waaaaay more rife with systemic racism.
The post war recovery laws were literally lobbied to specifically exclude black folks, but sure, home buying was easier for them then than it was post credit scores.
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Don't forget about Homeowners Associations! Redlining in another form.
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I don't think you know what social credit score means.
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This thread is full of people who don't know what they're talking about. I mean the whole thread is based on the implication that the credit bureaus are a government program.
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tell me you're ignoring how the adult personal financial world works in the west since 1989, without you, know telling me
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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.
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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! ☹️
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Damn that's really dystopian. It's a credit score that directly measures how profitable you are to others as a human.
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Since all money has switched to credit, "credit score" is the same as "money score", and "worth" is the same as "con artist ability".
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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.
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That's only on the VantageScore - the free score most places show. It isn't actually used by more than a handful of institutions.
FICO, the system used by the vast majority of lenders, considers closed accounts just the same as open.
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Not just paying a loan off early, even having the loan eventually drop off the credit report completely. This month the only change was an old, paid-off mortgage and line of credit dropped off my credit report. My credit score dropped substantially.
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I see where you're coming from.
Credit scores aren't about how responsible you are, they're about how well you can stick to an agreement.
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paying off the loan early is a part of any agreement, otherwise it wouldnt be an option
credit scores are entirely and exclusively about how good of a debt slave you are
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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.
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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.
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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.
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I wish we Americans had more backbone to push back on corporate enshitification in general.
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Living on the wrong street? What does that entail?
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Drug dealing, wrong skin colored neighbors, rabid squirrels stealing food from your kitchen... you know "the wrong street".
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TIL there are streets in Germany one can be homeless in, and it doesn't affect your credit score.
(I'm joking about your usage of "in" as opposed to "on", immediately following talking about not getting a place to live)
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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.
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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.
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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%)
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I’m the same as you, and I think we kinda had an advantage because we started with a blank slate. No student loans (if you arrived as a working adult), no prior debts, and hitting the ground running (if you arrived with a job waiting for you).
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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.
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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.
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I'm actually part of a credit union and would recommend it to many people. The credit union didn't get interest rates as low as what the big banks did a few years ago, but they're also not as high as the big banks are currently.
One thing I really liked about the credit union was that they didn't use my credit score when deciding my interest rate, they only checked it to make sure it didn't have any glaring issues. Also I like that the credit union doesn't sell my mortgage to a third party.
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They may do that for an extra percentage point of interest.
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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?
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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.
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If you're good with your money, you should at least consider cards with cash back rewards. You can get cards that give you 2% back on everything. BCP will give you 6% on groceries but comes with a $95 annual fee.
I always pay my cards the moment a charge posts. No point in carrying debt and risking paying any interest.
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Nicely done, this is not easy to do!
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Dude if you didn't spend most of ur life taking out credit cards and just paying them off to build credit youre a complete moron!
You're a programmer and this isn't rocket science. Lol. Talk about failing at life.
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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.
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owe the bank 1million, the bank owns you
owe the bank 100million, you own the bank
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That was not a pleasant image!
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My mortgage company didn't even look at my credit score once they saw my savings and income, which were REALLY not that much, just OK. But apparently good enough. So, I think credit score is only one thing they look at, and other positive things can outweigh a negative score.
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Credit score usually just determines what your interest rate is. Not whether you get the loan or not. Your cash flow (direct deposits) are more indicative of whether u can pay the loan vs credit score.
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FREE TO PLAY
(Includes
Microtransactions)-
Life is literally just IRL 2007Scape
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Life is IRL
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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.
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has that affected you at all?
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Yes. I was rejected from an apartment complex a few years ago. Otherwise, nothing at all.
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I'm still fucking pissed about that. All of their equipment should have been confiscated, securely erased, and melted down. Then we should have sent them a bill for disposing of that data securely, and a massive (like billion dollar) fine for fucking up that badly.
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Abolish currency, revert to trading sheep and goats.
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But I have noting of value to barter, except this ass....
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And you'll go to jail for it. Slavery for you!
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Based
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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.
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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.
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That's fair. It absolutely is a debt.
I just wanted to make sure that the 4chan OP wasn't referring to debt as carrying a balance and paying interest. I know two people who were previously under this incorrect assumption and basically giving away money for free to their credit card companies.
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Carrying more debt (with the ability to pay it ) does in fact raise your score.
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Are you confusing debt with credit line/limit, or am I misunderstanding your comment?
If you are referring to debt, could you provide me with a source for your claim?
I linked to myfico.com in my previous comment which is run by FICO - the company behind the FICO score. I think they would know a thing or two about what affects your credit score.
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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.
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I bought my land and house through owner finance, my debt was to a single individual.
That's cool and all, but it isn't practical if the person selling you the house also has a mortgage they need to pay off before moving. Shy of paying in cash, there's not a home in my city of Houston I could have managed that with.
I buy used cars only, either through owner finance or paid in full. No banks.
I mean, that's totally cool. But, again, it requires you to have a significant amount of cash on-hand and someone willing to sell a decent vehicle at a reasonable price. Possible, but certainly not trivial. And with the sheer number of dealerships and resellers and outright scammers in the business, its a minefield.
I have never had a loan from a bank.
Its certainly nice to have enough cash on hand to manage this trick. But good luck going to college without a parent's savings. Even city colleges charge you far more than a part-time high school diploma job brings in.
I did know a couple of people who were born into relative poverty and managed to be totally unbanked while having a relatively easy time of it. But they were both sex workers. Not a career for the faint of heart.
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I mean, again, obviously it's not an option all the time. Just use common sense
As for the other points, I don't think this comment really required someone to come through and cite it and break it down like I was some sort of Jordan Peterson esque life advice coach. I was giving my personal experience on not using the credit system, simply explaining how I personally have avoided the subject, and making the claim that there are other avenues. It's not an essay, my dude. I'm not trying to sell anything to you. Again, just use common sense.
I just proved its possible, not that it's feasible for YOU. Again, not trying to sell you anything
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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.
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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.
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I don't know if it works differently in the US but the best way to build your credit score is to not take on debt.
Keeping your credit utilization low and not missing any payments is the key. It's an indication of how likely you are to meet the payments.
If you max your credit cards out and just pay the minimum amount, carrying thousands of dollars of debt and as a result can't get a mortgage or a car loan because your credit score is shit then the system is working as expected.
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Yeah I want to emphasize this too. It doesn't "require you to take debt", it checks to see if you pay your debts on time. If you carry a $5 credit card bill and pay it next month that has a positive effect. If you don't pay that it doesn't matter how much it is, you missed a payment, that's a negative. You don't have to have a bunch of loans to have a good credit score, you have to pay your bills.
Thats why having a credit card can be good for your credit score because you are effectively borrowing money until the end of the month, then paying it back. That signals on your credit score "hey this person borrows $1000 a month, and pays it back every time. They're a reliable borrower"
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I don’t know if it works differently in the US but the best way to build your credit score is to not take on debt.
The best way to build a score is to take out small amounts of debt and repay them in a timely fashion. But you're still better off with a car note than without. You're still better off with a credit card than without. You want an optimal number of data points for the system to track. And you want a history clear of missed payments.
Without that data history, it becomes very difficult to secure apartment space or access anything other than student credit. And, because you absolutely need a car and an apartment if you want to exist in America in anything close to comfort, that means you functionally need a credit score.
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Unpopular but very truthful.
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Idk, doesn’t seem like magic to me. Just pay your bills. Grow your existing credit cards. Spend responsibly. Keep below 30% utilization of credit limit of each card and overall.
Start early (when you are 18) and by the time you actually need to use it (car or mortgage products). Then you will be gucci.
It’s a shame basic financial literacy is not taught in schools.
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yeah but if you're responsible enough to only spend money you actually have, you're fucked
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My dad told me to never use credit, never even get credit cards, pay for everything in cash. If I didn't do my own research and start building my credit score when I moved out at 21, I would probably not be living in my own house at the moment
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not much different than china's "social credit" it seems
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I know a guy who's a multimillionaire. He came up from nothing and always had the mindset that if you have to finance it, you can't afford it. A few years ago, he wanted to purchase an apartment complex, but was short by something like $500,000. He tried to get a loan, but the bank wouldn't give him one because he had no credit. Instead, he sold two of his supercars to cover the difference and bought the complex.
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gosh I hope they're ok
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He’s just fine…
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That's a lie. Someone who has millions in dollars in assets the bank would just ask for some form of collateral. They wouldn't rely on a fucking fico score. Also it would be a company owning everything, not a person. You've literally made all this up in the most stupid way possible.
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It really is crazy to look at someone's financial history to figure out how much money to lend them and at what rate..and whether they have any income to pay it back, fucking fascists!!!
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Your credit score actually goes down when you pay off and close accounts. Which would indicate you're very financially responsible and will pay your debts off.
The reason is because a credit score is not about whether you will pay your debts and are financially responsible. It's actually configured to be a score of how much money a lender can make from you. If they can't profit from you, they don't want to lend to you. So the score goes down.
If it was a score of financially reliable and stable you are, then it would be much more welcomed.
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At some level, its just another aspect of the surveillance state.
"Oh, you want to buy a car? Show me your credit card statements. Show me every place you've ever lived. Tell me the name of your spouse, so I can interrogate that person as well."
I might not even call it fascist, per say. Its more feudal. Some aristocrat demanding your life story before he lets you onto his fields to work a plow.
And all because these necessities of life are so expensive that nobody can just pay cash in hand for them anymore.
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Every day I thank God I stopped caring about credit scores and started doing stuff with cash or debit.
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I was always taught not to get credit cards or loans. My mom, a teacher, always saves up her money and then pays for her cars and houses in full. Not once did I need any kind of credit score or anything. I have cars, a home, cell phones... internet, etc... and no credit for scammers to ruin lol!
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"I want your money but I don't want you to see how trustworthy I am. Just give me money"
Seriously how entitled is everyone these days. It is not a human right to borrow money, you are at the mercy of the banks because your are asking them for a favour. If you don't like that, don't ask them for money.
You always have the other option. Build savings instead, but then you have to wait for the things you want and you might have to live with family while doing so. I'm not saying this path is easy, but I'm not the one objecting to a lender wanting to know how good or bad I am with money before expecting them to risk theirs.
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"Not everyone has family they can stay with." No I know that. Which is why I said it's not easy to go this path.
"Many have shit credit due to health conditions that are not their fault. "
Which is not an argument for " give me your money without looking at my past" it's an argument for mitigating circumstances to be better considered.
"Credit checks are increasingly used for apartment leases and car insurance."
This is wrong. A security deposit is the landlords financial guarantee. I also think insurance should be based solely on driving record, not age , gender or where you live.
"Is it entitled for a person to think they should be able to have a place to live?"
If they expect to be lent money for it, no questions asked them it is absolutely the definition of entitled. You are not entitled to a place to live on someone else's money. It is your responsibility to provide for yourself and your family. I'm all for expanding welfare programmes, help to buy schemes, rent control etc etc. Those things are something we all pay into and provide us with a safety net is bad things happen. Those things should make sure you are able to have a place to live, but don't expect a bank to lend you 500k to buy a house without some idea of is they can trust you.
Now in saying some of this I find myself in the dirty position of siding with rich banks. I am not intending to do that because I hate that they make shit loads and squirrel it away for themselves, charge me for borrowing when I'm in negative and pay me back very little for using my money when I'm in positive. This is not about that, I'm only interested in what is fair in the isolated transaction of one party pending another money. Wouldn't you want to know how likely you are too get back your money if you were the lender? Would you lend money to your friends with a gambling problem? Is the current system of credit check fair? Not exactly. It should be enough to be able to demonstrate financial responsibility. I paid rent for 20 years without missing a payment, but it wasn't enough to demonstrate financial stability or responsibility and that is plain wrong.
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shit credit due to health conditions
There's your problem: it isn't credit scores, it's an abusive healthcare system tanking your credit score.
If everyone should have the same opportunities in life, they should have them despite their health conditions, the opposite is thinly veiled eugenics.
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Doesn't the Chinese system also limit access to social services in addition to loans?
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Yes, the Chinese social credit system is a government created thing that's more a way to punish people who don't do what the government wants.
The American one looks dystopian at first glance, but it's privately created by and for lenders so they all have a shared understanding of the optimal amount and rates to lend to someone. If you or I sit down and make a spreadsheet ranking houses we might buy or quality of restaurants near us, and then give them to a friend so they don't have to create their own from scratch, we're doing something not that far off from what credit scorers are doing.
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They're both stupid.
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Nice strawman argument. Does your brain only allow you to make inspired leaps of logic like "no credit score == meth head"?
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No credit. No score. Still bought house. There are ways around the system. Same for my cars usually. Buy them at auction. Ditto for phones. You don't need that new $1200 iPhone. A used one for $250 cash and holding onto it for 6 years is much better.
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What the fuck kind of wankjob is upvoting this boomer-tier "Just don't buy Starbucks" horseshit?
"Just pay cash for everything on your $25k a year! You can totally buy a house if you save for the next two decades!"
Fuck off.
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Hahahahahaha, "no credit, still bought a house", ok mr my uncle left me gold bars in his will, the leprechauns showed me the end of the rainbow, hahahahahaha
It's incredibly expensive being poor, lots of people are poor, there are of course ways to be poor, and without good credit, but everything costs three to four times as much in the end, if you don't have cash on hand.
The Sam Vimes "Boots" theory of socioeconomic unfairness by Terry Pratchett's Ringworld comes to mind: https://en.wikipedia.org/wiki/Bootstheory
Can it be done without a credit score, sure, is it incredibly difficult and in the end more costly, almost always
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Got my house through Habitat for Humanity. (And that's not a free house program. Ask me if you want to know more.)
I was fortunate, but there was some motivation involved.
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H4H works very well for very well qualified and motivated people. Im so glad you were able to make it work.
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