This is a place to share greentexts and witness the confounding life of Anon. If you're new to the Greentext community, think of it as a sort of zoo with Anon as the main attraction.
Be warned:
If you find yourself getting angry (or god forbid, agreeing) with something Anon has said, you might be doing it wrong.
You know my favorite fact about credit scores? Paying your utility bills on time for your whole life will not raise your credit score one point. Forty years on time every month nobody cares. However missing enough payments on your utility bill that it gets sent to collections will lower your credit score. Kind of makes you want to burn down some buildings doesn't it?
And rent. My last rental had a special offer though: pay an extra fee every month and they'll report your rent to the credit bureaus, raising your score through the roof.
Shitty deal, but yeah, moves like this will save you money.
Dad: "You know how when you and your gf want to learn how something works and you get books at the library and learn about it? (90s, OK?) You can learn how money works."
Lemmy: NOAAWW! Want money want credit! No learn!
Reminds me of a coworker telling me overtime is bullshit because they charge you more taxes and you actually make less money.
Oh honey. That's why you'll never have more money.
You can use Kikoff or CreditKarma or things like that to regularly report your paid on time bills, and that does, slowly, incrementally, increase your credit score.
Yeah its still total bullshit that that isn't just like a pre-baked in part of the credit system, but you can do this.
Careful, that'll lower your score
Credit scores are used to tell companies how much they can earn on lending you money.
Paying back quickly reduces the amount they can earn, lowering your credit score.
Not paying it back obviously lowers the score.
The way I understand it, to raise your credit score you need to slowly pay back your loans, so you pay back maximum interest.
Note however that I am just a cynical IT guy in Sweden with zero actual exposure to US/UK style credit scores, and that I may be talking out of my ass.
The way I understand it, to raise your credit score you need to slowly pay back your loans, so you pay back maximum interest.
I got an 800 credit score by just using credit cards and paying the balance each month. Lenders made literally no money on me.
100% spot on.
It's absolutely a scam designed to extract even more wealth from the poors.
No joke, I've had a car dealership tell me they can't sell me the car I want because my credit score was nonexistent (no credit history in 7 years). I was paying in full, in cash, literally in an envelope in my hand.
Grand total of 8k, all in 100s, super easy to count.
But no, I didn't have a "good enough credit score" so I couldn't buy that car from them, despite having the money to do so.
Mental gymnastics on that one.
Here in Sweden, that would also have been rejected, most stores won't accept cash at all.
I had to pay for my car using a wire transfer a few days before I picked it up.
I do think that it would have been funny to just use tap to pay, but apparently that would have increased the cost by a lot.
That's insane to me.
I have money to buy something, and I'm being refused the sale despite this money being legal tender.
I get what you mean, and agree to some extent, but the reality is that handling cash is expensive and dangerous.
Back in the early 2000s, there was a large wave of high profile armours car robberies in Sweden.
Some even completely blew up the armoured car.
This lead to a debate and a deliberate effort to reduce the ammount of cash used in Sweden.
I remember reading something about 97% of all transactions inside Sweden are now done electronically.
This has lead to banks having offices that don't handle cash, and that banks are looking at cash deposits with suspicion, since you can't trace cash.
This, as usual, only really affects normal poeple, and criminals have ways around it.
Just imagine paying for a car with something like an SJ credit card and get the motherload of priopoäng!
(For the non-Swedes, SJ is a train company with a version of a frequent flyer miles point system, and they like most of those have a credit card where every SEK spent earns you 1 point. A trip from Malmö to Stockholm (600km, ~4,5h) can be bought for some 12-16000 points. A new car costs anywhere from 300000 sek up to a million and beyond.)
I think you just got a shitty dealership. “Legal tender for all debts public and private” means just that, they aren’t allowed legally to refuse dollars. My cousin also successfully did what you are describing.
Your ass is speaking truth
There must be something else to it. I've never paid any interest on my credit cards and I paid off my mortgage early; by your logic I should have a low credit score, but it's actually in the "Excellent" range.
Yeah paying back early doesn’t affect it as far as I can tell. Lenders just want to know if you’ll leave them in the lurch or not. If you pay back early that just means they can reinvest the cash sooner.
There are a lot of bad answers or misunderstandings about credit scores in this thread.
FICO Credit scores measure exactly one thing: How good are you at regularly paying on debt over time? Thats it.
There are some other companies that take your FICO score and make their own determinations from it, but those are not the intended purpose of a FICO score.
ANON is also saying "x raises" or "y lowers" but he's missing one other part. Some of those raises and lowers are temporary meaning for a couple of months only, and those don't have years long impacts.
Most of the big moving pieces are publicly published right on the FICO website too, so you don't have to guess:
So lets look at ANONs complaints through the lens of what FICO scores address:
Using credit lowers your score
I'm assuming ANON means "using a portion of an already established credit line." We can see in the chart that this would increase the red segment of the FICO score. FICO assumes the closer you get to your maximum credit availability, the more you're being squeezed financially reducing your ability to pay on all of your debts. From a lender's perspective, if your debts are piling up, then lending you more is a higher risk.
Not using credit lowers your score
If ANON means "using zero credit" then, yes, ANON wouldn't have a recent history of paying on debt then the Payment History section of the graph would be thin or empty. From a lender's perspective, if you haven't paid on any debt in the last 6 months, how do they know you still have the ability to do so if you want credit right now?
Paying back late lowers your score
Absolutely! Its violating the very purpose FICO is made to measure: How good are you at regularly paying on debt over time?
Paying back early lowers your score
This one is a yes or no depending on what scenario ANON is talking about. Paying back a credit card early DOES NOT lower your score. In fact, it would likely RAISE your score. Paying back an installment loan, lets say for a car, early can lower your score, but not because its early, but because the load will disappear. Without a loan to pay on, you will have less recent history of paying on an installment loan for a car, and 6 months from now a lender may not know if you still have the ability to do so, so you score falls.
Even checking your score lowers your score.
ANON checking ANONs score DOES NOT lower your score. ANON allowing a lender to do a hard pull check does lower the score, but only a small amount 10-20 points and this is temporary about a month or two. Further, do several hard pulls at once, they don't each lower by 10 or 20 points. If you do the pulls close together (within a week or two) it will be only the temporary lowering for a month or two. From a lender's perspective if you're reaching out for new lines of credit, it means you're indicating you're about to take on more debt which could affect your ability to pay on further new debts.
Taking out loans lowers your score
Temporarily, yes, but over time this can grow your score if its in a different loan type or length.
Paying back loans lowers your score
Yes and no, circumstances depending. If you pay back that one loan type lets say a car loan, and you have have no other installment loans, then you will have no more recent history of paying on any installment loans. However, if you have a mortgage which is another type of installment loan, you'll take no hit for paying back the car loan as you will continue to have a recent payment history of paying on installment loans. You could take a hit because a nearly paid off loan looks good for the "Amounts owed" component of the score, but you could use a trick like getting a credit card of the same credit line (and not charge anything on it) to avoid that if you really need to.
Not taking out loans lowers your score
Not quite true. Having no recent payment history means a lower score, but it you already have some type of loan or credit you pay on every month, not taking out more loans will not hurt your score.
One final thought I really really want to dispel: YOUR FICO SCORE IS NOT INCREASED BY PAYING INTEREST ON CREDIT CARD DEBT!
Try everything you can to avoid carrying credit card debt into next month. Interest rates are crazy high and it does nothing to help you. If you put a purchase on a credit card, make sure to pay the full statement balance every month. If you do this, you'll pay zero interest on any credit card purchases.
tldr, debt is a trap. only when you accept it's a trap does it become a tool
if you want/need more $...learn the value of your labor.
For the vast majority of people the only debt they should ever get is a house.
The average person does not have to financial means to pay for a car or school without loans.
Thank you, holy shit, I get so frustrated seeing the most obviously-disproven misconceptions flying around even communities that purport to be savvy, lol.
Though one thing you didn't mention that I think always should be: re credit card, don't pay SO early that the agencies never see that you borrowed in the first place. In other words, wait until at least your statement date to pay your card (off, ideally). It's your statement balance that gets reported, so if you pay before the statement cycle ends, the agencies won't even know that the transaction(s) happened at all. Pay the card off anytime between your statement hitting, and your due date, and you're golden, credit score improves, and you accrue no interest.
I'm Australian, and this post prompted me to research the US Social Credit system. The score can determine whether or not you're accepted for home rentals, and even determine whether or not you qualify for medical treatments
You need to engage in having debt and credit in order to appease the score.
I bought an apartment recently, and I've never had a credit card or debt of any variety. When I was younger my bank would dip into negatives or reject a payment fairly regularly. In the US that could probably cost me a place to live.
And apparently the entire credit score is built up and perpetrated by these massive corporations? Like Credit Score is not even anything to do with the government, and yet it has such a pervasive effect on people's lives and their behavior.
It's straight up creepy. Dystopian vibes. How do Americans tolerate this?
Easy. It's a scam to screw over anyone they feel like.
It stopped being a can the applicant afford their current outgoings and afford this loan type system a loooong time ago. Now it's a noose round the neck of anyone that has ever lost a job and missed a couple of payments or got screwed over by a company changing billing software. The number means nothing, I'm sure on some kind of grading curve it averages out but so would throwing darts at a board and assigning scores that way.
The rich fail up and everyone else has to play by the rules or get fucked over.
/Rant over
The rich fail up and everyone else has to play by the rules or get fucked over.
You're playing by their rules, and it only matters as long as we allow them to not play by the rules.
I bet they'd stop doing it if they got literally ripped into pieces by horses. Or a horse's solar-powered motorized equivalent.
Credit score = milkability score.
I follow the old-fashioned idea of buying things with money I have, debit instead of credit.
My credit score is nearly 800 and I've given credit card companies $0.00 but they reward me with cashback for using them. Its basically debit with rewards and more protections but you do you king
Cashback and protections paid out of higher transaction fees, merchant raises prices to cover those costs. It's not just a magic money machine; the consumer is subsiding significant card company profits. If we all just agreed to forgo the rewards and protection there would be fewer middlemen to pay, but I don't blame you for acting greedily (I do the same).
The exact same as the Chinese "social credit" system that people whine about, except this one is capitalism based, so it's ok.
many different names for the same but different system that is all about control and sugation of the masses.
Never owned a credit card, never will
"But how will you raise your credit score without accruing debt?"
I'd rather fucking die than spend my time participating in a system which wants to grade my Credit Utilization Normalization Tier (CUNT).
In my area it can be very difficult to get an apartment unless you or someone you're renting with has a decent score. Participating in this bullshit isn't a choice for some people.
Its a very complex system of math and rules, but it isn't impossible to ... raise your credit score.
Closing a loan or credit line actually often lowers your score because it lessens the total amount of credit you theoretically could be using, if you maxxed everything out.
Your 'Credit Utilization' is what % of your total maximum possible credit you are using.
So, when you finally pay off a huge loan of some kind... well, that account closes, and now your relative credit utilization probably goes up, because the system is now only looking at say your credit cards, instead of your credit cards + your big loan.
If CC Balance is 30k / 50k Max,
Big Loan is 5k / 500k Max...
You're at 35/550, or 6.3%, very good.
Pay off Big Loan?
30/50, 60%, pretty bad.
Theres no like, reward mechanism that you get in the system, for paying off a large loan successfully, beyond all those payments toward it counting as on time payments.
So basically, you should actually never close down a credit account of any kind, after you fully pay it off, to the extent that you can do that.
Just... use it sparingly and make regular payments, or put the card in a safe, destroy it, who cares, as long as the account still exists.
(big asterisk on that: unless it has some kind of regular due payment just to even have the account, even if you're not using it at all, have no balance on it at all.)
Thats also true because another big factor in credit scores is how long you've had the accounts you have.
It literally does just take time to build up that element of it, time of you making regular payments and never leaving a balance that rolls over into the next month.
I'm not trying to defend this system, its horseshit, truly evil, a mandatory labyrinthine scam that everyone is forced to participate in, which almost everyone loses.
I'm trying to summarize useful advice.
I was homeless for 2 years.
When I finally got a bit more stabilized, I had scores around 520, because yeah, I spent money I didn't have so that I could eat, and not sleep outside in blizzards and heatwaves.
Its now been about 2 years since that point, and I'm up to between 670 and 710, the 3 agencies still considerably disagree as to which accounts I even had... as I got mugged and had my identity stolen multiple times, and I was only able to convince different agencies of different amounts and extents of that... and also crippled by those muggings...
But the point is, its not impossible to rebuild your credit, even while you're living off of only SSDI as I now am.
Its exceedingly dfficult to do so, but not strictly impossible.
You can find real, in depth guides on how all this shit works, but it'd probably take most people a solid week or two of studying it to fully grasp it.
Makes sense when you learn and realize that this is the new way of red lining people. Particularly POC who are less likely to be able to build credit because of poverty.
It's all a scam, man. Money's just pretend. I converted all my cash to radishes. At least when the economy goes into a death spiral I'll still have radishes.
It's an American and British affliction... This shit wasn't even a thing in France and then I moved to the UK and people talk about "credit scores" and willingly going into debt to pay it off, huhhhhhh 🙄
I'm sure I'll get down voted to holy hell for saying this, but I've always appreciated that the rules are pretty transparent and it was easy for me to rack up a great credit score even before I had a decent income. To me it always felt like an open book test.
I think that's misleading - taking out loans and paying them back is the most well known way of raising a credit score. I don't see why the opposite would be true.
Supposedly some people actually do this, when they can afford to, because they see the boost to their credit score as worth the actual lost cash in interest. From what I gather, credit score helps you to attain more favourable mortgages or other loans, which helps when you make big purchases like cars or if you run a small business.
Example from my own life:
One arguably unjust part about credit scores is that the actions of people related to you, or simply sharing the same surname as you, can affect it! E.G i have heard that a friend-of-a-friend's dad took out too many loans and now their credit score suffers.
Seems like a medieval system to me. People joke that it's the capitalist approach to a "social credit score," and I have to agree.
Anyway if it's true that the actions of other people can affect your credit score, it seems like the number is nothing more than a "how much do bankers like you" score. I presume a bankers immediate family will have higher than normal credit scores. What OP/anon perceives as the score going down for contradictory reasons are actually just his score going haywire under a combination of factors outside of his control.
I've had a consistent score of a little over 800 before and after purchasing my house by paying off my credit cards ahead of time. I had no major long term debt other than a mortgage either. That said, this is pretty much the equivalent to that Chinese social credit score crap but it's real in this case. It just means you're ranking high in some opaque game on your financial prospects that the banks are playing.
The dirty secret - they don't work - and that's by design
The trick is to not give a shit about credit scores, of course I don't live in the US which helps.
The problem is, usually people and services that one uses, DO give a shit about your score. Unless you live off grid (not in the energy sense, but as a member of society) in the wilderness, you will have to deal with It, unfortunately.
Wait until they find out that the scores are created for consumers to bicker over and actual lenders only look at histories for their own criteria and they don’t even see a score as past of the report they examine
The cultists at Experian sacrifice a black goat and interpret the spatter patterns
Credit scores are like... (And I'm sorry about this)...
spoiler
Like The Game
Don't listen to people saying you should keep extra accounts open. If you have 1 credit card open that you use regularly and pay off every month you'll pay no interest and have a good enough credit score.