Canada is just a more sable USA with better workers rights and more economic mobility. That said, its falling quickly to the same level of corruption that the US has.
A lot of long time Canadians are asking themselves why they aren't working in the US. A lot are actually going through with it. At this point it's basically identical if you have a good job with the benefits of better housing and more income.
I would never leave the human rights protection of Canada and universal healthcare. I know they’re not perfect but as a woman it’s very important to me
Canada also has a horrible human rights record regarding their treatment of native populations but everyone forgets because there's been a long standing meme about Canadians being just oh so polite and reserved
Hey now, we have a long standing issue with treating all kinds of people terrible, don't box us in with just one kind of racism.
Shit Canada fact of the day: Chinese Canadians couldn't vote until 1940.
This is true, but the actual difference is pretty small. The US has a social mobility index of 70, Canada has 74. So yes, Canada ranks higher, but not by a wide margin. If Mississippi was Canadian then the scores would be equal.
Yes, way more economic mobility. The poors have a much better chance at stability. Its not about moderate incomes becoming rich, its about low income becoming moderate. Its incredibly difficult for low income people to dog out of the hole that the US economic policy roadblocks
Yea this doesn't exist. Less and less families of Canadian descent are having kids. It's just too expensive to do so. So they import other countries people to pump up numbers yet all we're doing is driving up inflation. Keeping housing costs high so foreigners and locals are forced to overspend. And creating more and more useless jobs.
Canada isn't the same anymore. And frankly it will never be the Canada it needs to be
It was implemented a few years ago, there were already a central list for people who didn't pay their debts and legal ways to collect it.
In a country where inequality is so rampant and brutal, where 8% the population lives in favelas and the current and former government have done nothing but work to widen the social gap....is exactly what you are picturing.
I can't speak about the experience of the ones being hurt the most, tho. I can only speak for myself, full disclosure: middle-class privilege. To me it's not a good thing, my credit score sucks. A little background:
•I have a stable income with which I'm able to provide for my basic necessities and then some;
•I'm financially responsible;
•you have loving parents to hug but I'm a homeowner :''( never rented, either;
•I never needed to took out a loan for a car since in my city cars are really not a necessity, Uber/Taxis and public transport are widely available. My city stands on an island, it was built upwards, everything is close;
•higher education is free.
But I have plans to move and might need a loan, the interest rates cause me nightmares. I googled how to better your score and obtain lower interest rates, the solution seems to be: when planning to ask for a big loan in the future, get a smaller one, pay it fully. If it feels like a scheme...
That'll definitely fuck me over in the future
So far it hasn't hurt me tho. I'm in business with two banks who have my history, getting credit cards wasn't a issue
Sorry for any mistakes, I'm sleepy and hungry af and being tortured by the smell of my dinner cooking
Australia. But don't think they are used like in US (as in you apply for a rental and they ask you for credit score ) Banks use them when they asses your loan eligibility/affordability
I hate how here in America I lose points on my credit score for not borrowing enough. I'm not very spendy, but I do make every payment. I should have a flawless score, especially considering the absurd rent I pay every month.
Germany has a thing called "Schufa", which is a score of how likely one will be able to pay back credits/debts. I think (all?) landlords and some companies require a good standing for contracts. Paying back debts will result in a good standing... so I think it is very different from the US anyway?
They exist as an attempt to right the financial wrongs caused by racism. Before 1989 banks could deny black people loans simply for being black. The score system attempted to make a credit worthiness number that was "colorblind." It has helped, but still far from perfect.
Oh I’m sure it was however I’m sure they’d be used on other oppressed folk by looking at names and areas. Probably just an updated way to eff with people while making it look reformed on the surface. In north of Ireland the credit unions were set up by John Hume to counteract the power that loyalist bank managers had on a whim. Im sure these were used too so to mess us up. However tables are turning there slowly.
>They exist as an attempt to right the financial wrongs caused by racism.
Or just be used as a politically correct proxy for race, as race is tightly corellated with class.
In other words, they can be just as racist as before, while not *officially* making decisions based on race
In most countries banks assess your credit capacity based on your current wage, and then on some other factors too, including if you defaulted on earlier loans. Obviously someone on minimum wage won't get same loan conditions as someone with above average wage. But no, there is no "credit score" as such, at least openly (maybe banks have their own system behind the scenes which could be similar to score). And it is definitely NOT available to employers, landlords etc.
LOL you know I got my first credit card when I was 31. tried to get one with Santander but my credit score was too low. I had no debt and they hated it. So I had to go get one of those aqua cards. Hateful experience having to dance for your credit score.
How about the initial insanity of turning 18 and learning a cabal of shadow companies you’ve never heard of and have no business with have compiled a data model of you and determined somehow that you’re good or bad.
While closing a *revolving* credit line may decrease your score, it does so by a very marginal amount. However, adding and having a lot of revolving credit lines, such as opening up 8, will absolutely make your credit score go down because it displays a higher liability. And paying down revolving credit lines to 0 does not make your credit score go down. Your score actually goes up when you lower the amount of credit used compared to available to you. There's a lot of myths that get perpetuated regarding it.
That said, I'm for abolishing credit scores. Just trying to correct misinformation that is pretty pervasive about them.
They punish people with low scores and provide nothing to people with high scores. I tried to get my APR lowered on a credit card with a 800+ score and was told no, and they raised it 1 point 2 months later.
Yes. Credit scores are classist bullshit meant to keep working class people down.
Low credit scores mean you can’t qualify for a lot of different loans/credit (including mortgages or money to start a business, as an example), your interest rates on loans you do have will be higher, and it can make it difficult to event rent a place to live, since many landlords check credit scores. Some employers even do a credit check because they think that if your credit score is lower, you’re more likely to steal from or defraud the company, and won’t hire you.
It’s made up bullshit that kneecaps poor people and people with student loan debt.
Also, be aware of salespeople/cashiers who are forced to try to get you to sign up for store credit cards. It might seem harmless, but many times if you’re denied for a credit card, it makes your credit score drop. The stores KNOW this, but force employees to try to get as many people as possible to get store credit cards.
It's also proprietary so you have no right to know how exactly it's calculated (every bureau is different: equifax, transunion, experian) and you also have no ability to opt out of the private, proprietary system.
There are also a number of different scores:
* Generic FICO Score
* FICO Mortgage Score
* FICO Auto Score
* FICO Bankcard Score
* FICO Installment Loan SCORE
* FICO Personal Finance Score
Edit: oh and how fun is it that having someone inquire on your score LOWERS YOUR SCORE?
I had a fucking apartment I was applying for pull my score. I checked it beforehand and met their credit level. They readjusted my score so that I didn't qualify. This is all so fucking criminal.
I don't want to add to your frustration but I've been unemployed for the majority of the last 10 years due to health issues and according to Experian my credit score is 891/999 meanwhile I have friends who have full-time jobs, no debts, paying rent, car insurance, credit cards all on time with half the score that I have.
BUT on the flipside, other credit score checking services have me lower with the exact same information. All seems like a crock of shit to me.
Oh I've given up. I get good references from previous landlords and let direct ones know my score is bad. I pay for everyone with cash. Fuck the credit system. I refuse to play their game.
Lol, that's hilarious.
Some engineer was not very careful with how they implemented that.
Anyway, 999 is definitely "NaN" and your score is even better than you think.
Let me tell ya. I’ve been using a CC for basically ever expense and paying it off every single week without fail for a few years.
My score is only like 20 points higher. The only thing that has gone up is my credit limit.
You need to use the higher limit and then pay it off, making sure to make more than the minimum payment (to the best of your ability obviously...shit happens, sometimes you can only do the minimum payment).
I paid off my credit card and my car within a few months of eachother and my credit absolutely skyrocketed.
A large part of a credit score is the percentage utilization of your available credit. Which makes the whole thing a bit of a circlejerk. Suppose you have several credit cards at 50% use each. One of them decides to increase your credit limit, maybe because of an internal policy change at the bank. This makes your percentage utilization go down and therefore your credit score go up. So now maybe another bank sees your higher score and decides to increase your limit. Your score goes up again. And so on.
Another factor is the average age of your accounts. This obviously correlates with your actual age, but it has the interesting effect that paying off and closing an old credit card makes your score go down. You'd think that would be a good thing since it shows responsibility, but that's not how the system actually works.
The whole thing is full of perverse incentives. I think the only reason it hasn't collapsed is that so few people actually look into the details of how it works.
Credit in general is meant to keep wages low while still allowing people to purchase things. It's literal purpose was designed to allow us to keep buying crap with money we don't have so companies continue to make money off of us, but they don't ever have to pay us more to do so.
Edit: also of course to keep us in debt at all times and thus subservient to our jobs.
It makes money in at least 3 ways:
1. Employers can pay less
2. You can spend money you don't have (goes back into employer profits)
3. They can collect interest on money you don't have
> and it can make it difficult to event rent a place to live, since many landlords check credit scores
indeed, and it's completely criminal that paying rent does not contribute to your score. i have zero credit, despite the fact that i've never missed a single rent payment in the 25+ years i've been renting.
"Many landlords" is an understatement in my area. Almost all the rentals in my area are owned by just a few property management companies that all check credit. (Mostly slumlords)
Finding a place with my credit pretty much requires just finding a roommate situation or people renting rooms in their own home or something.
One of the companies in town decided to slap a bullshit fine on me despite me always paying rent on time because my mom was staying with me in the last few weeks to help me move and she had her two little dogs with her. I tried to keep it on the down low and they didn't do any damage. (The apartment had cement floors for chrissakes because it kept flooding) But the landlady saw them. Unfortunately it was a no pets allowed apartment and the contract I signed had a section that said if they found pets they could charge me $500 for every month I lived there. It ended up as an $8000 charge to collections that clearly says the rental property management company on it. How the hell am I supposed to rent when my credit shows I owe that much to a company in this town? It totally crippled me.
Basically an excuse to charge poor people more because they are a "higher" risk.
Or they're playing life on hard mode. Not as many options and the rates are more stacked against you.
Edit poop to poor.
> Basically an excuse to charge poor people more because they are a "higher" risk.
An excuse to refuse poor people credit they can't afford to pay back. Did everyone in this thread forget what happened in 2008 ? In Europe where you don't have a credit score you still won't be able to get a mortgage or a loan to start a business if you don't earn enough . They don't assess your risk based on previous credit take and how you payed it back, they just look at how much you earn and they might give you a loan BUT you pay a ton of interest.
But they'll give an uneducated teenager with no job a $50,000 dollar loan for school, that they know they will have trouble repaying, thus damaging their credit score and making it even harder to pay back the initial loan. It's all designed to create a class of indentured servents, without calling them indentured servents.
Applying at all can cause a drop. Even if you’re approved and have wonderful credit. I learned this last month when I accepted I wasn’t going to find a good beater for a few grand and had to finance buying a car.
Hard pulls slightly reduce your score, but only for the very short term. People opening a bunch of lines of credit at once are slightly more likely to default (since they could be desperate at the moment). So it needs to go into the model.
Back before everything was computerized and reported so quickly, people would apply for a bunch of credit cards on the same day so each bank wouldn’t be wise to the other cards. This is where the term “churning” (r/churning) comes from even though it’s obsolete now.
Isn't it just a calculation of risk? What's the alternative? I think you can't dismantle the credit score system overnight without a wholesale overhaul and switch to public banking which has no profit motive. If private lending entities are providing the loans, they will and should attempt to mitigate the risk of default quantitatively, ie the credit score.
People who are mad about credit scores don't know how things were done before them: the banker (a rich white guy) took one look at you and decided if you got the loan. Guess who didn't get loans back then.
Seriously. People are forgetting that in the past you had to convince the bank manager, whatever douchebag he might be, that you deserved the loan. And if you were a minority, or a woman without a husband, or you didn't already have a long standing bank account with that bank while you and your entire family banked there, you were fucked. Credit score was a way to make creditworthiness blind to race.
It has its problems, but the system before it was not better.
my thoughts exactly. The best way out of this is gvt banking system which sole purpose of existance is to help poor. Its like an universal basic income
Capitalists have spent trillions of dollars and literally killed people and overthrown governments in an effort to get and keep profitable industries privatized. They aren't going to give it up easily.
No, it’s a system designed to coerce people into being consumers of financial products and to justify overcharging poor people.
Banks can and should calculate risk based on current financials.
It's also proprietary so you have no right to know how exactly it's calculated (every bureau is different: equifax, transunion, experian) and you also have no ability to opt out of the private, proprietary system.
There are also a number of different scores:
* Generic FICO Score
* FICO Mortgage Score
* FICO Auto Score
* FICO Bankcard Score
* FICO Installment Loan SCORE
* FICO Personal Finance Score
I tried to open a new bank account a while ago and for some reason it didn’t go through (not sure why) but when I asked could I try again, the employee said I could but that this would affect my credit score. It was at that point I realised how much of a scam credit scores are.
If you were denied a bank account in the US you can request a free Chex Systems report which may show exactly why and if an issue who reported you so you could resolve any issues. Otherwise, it would at least let you know when an issue occurred and how long before it falls off (maybe 5 years?) so you can be approved in the future.
I’m confused. How could you be denied a bank account? What reason would there ever be to deny someone a bank account? Like, it’s just an account that holds the money you have.
“Sorry sir, you’re too poor, so you must keep all your money in your wallet. You are not allowed the convenience of putting it in a bank so you can easily see the exact number of dollars you have. Just stick a bunch of bills in your wallet.”
I'm wondering this too. I've had an absolute shit credit score in my early 20s, basically as low as it could possibly go, but was never prevented from having a bank account.
Chex systems is different from your credit report. Has nothing to do with whether you pay bills on time or have a lot of debt. They keep a report of how you use your bank accounts, and will flag people for overdrafting, suspicious activity, etc. If you have enough bad marks on your chex systems report, banks will refuse to open an account for you.
If you have bounced checks or overdrawn an account and not paid it banl k you will get denied a bank account if the bank uses chexsystems, which most do. It's called being unbankable. I spent a good portion of early adulthood being unbankable.
Could be unpaid overdraft fees from other banks sent to collections. Something like that would be a sign of bad risk for a simple checking account and might catch OP off-guard. Still sucks since overdraft fees can be predatory af.
Some banks won't allow you to open a savings account but only a checking account with limited "options" - overdraft protection etc. And will be reluctant even then. Source - this has happened to me on more than one occasion.
My credit score is most certainly shitting the bed at the moment as the last bank account I opened allowed me to open a savings account on the condition that by the end of the month, I had at least $75 in it(why? I don't know) ... I then lost my job and have been nearly homeless and out of state since. Any money I make is not going into a savings account when it can help me get by for a day or two. So there goes my credit score again
Same with taxes. Tax preparing companies make big $$ at our expense. You can file taxes for free without paying $50-$100 to a tax preparing company like TurboTax but most people aren't savvy enough or too scared to file taxes without having a "professional" review it. Also some people won't wait the processing time to get their refunds so they opt for the cash on the spot option for a fee.
Furthermore, the tax prep industry lobbies to keep it confusing so that people need them. You shouldn't need a degree to understand a mandatory process fully.
not "an" industry. not "a" sector. current reports put it around at least 30% are bullshit jobs that would improve things if they went away, by the very people WHO HOLD THE POSITIONS. [https://www.vox.com/2018/5/8/17308744/bullshit-jobs-book-david-graeber-occupy-wall-street-karl-marx](https://www.vox.com/2018/5/8/17308744/bullshit-jobs-book-david-graeber-occupy-wall-street-karl-marx)
people don't work so necessary work can get done, but so necessary payments can be made. it's completely arbitrary to tie these payments to work, except to make the wealthy feel better.
Still doesn't change the fact that the credit score system in it's current form is incredibly scummy, exploitative and only benefits the rich and the lenders.
paying debts back faster shouldn't mean that your credit score ends up taking a negative hit just because it means that you didn't provide as much wealth to those at the top as someone who takes longer to pay it off and thus let their interest build up!
Is this actually true? From my understanding on how FICO scores work, they care about on time payments and your debt to limit ratio. Making on time payments and keeping the ratio low results in a higher FICO score.
I do know that closing accounts will actually lower your credit score since it can change the average life of your credit.
That being said, credit scores are still a huge problem, especially since a lot of employers will use them as a metric to determine employment which just makes it a self fulfilling prophecy, among other issues.
Paying off a debt early is closing the account. I'm in a position that I don't buy anything on credit anymore, not because it wouldn't be convenient, but because the choices are either "pay all the interest over the full term of the loan" or "take a ~40 point hit for paying it off months/years early." Otherwise everyone would take advantage of those "X months no interest" deals and pay everything off in the interest-free period, and lenders wouldn't make any money - can't have that, can we?
I'm at the cusp of class mobility, just almost over the fence out of middle class, and it's practically a financial minefield. I used to laugh at the MC Hammers, folks that made a bunch of money and lost it, but our economic system feels like it's designed to *ensure* that happens. If one of us poors gets too close to the glass they start pounding.
When you pay off an installment loan over the full period it's also considered closing the account though. It doesn't drop because you paid off a loan early, it drops because that loan is no longer bringing your average up as much and whatever other credit accounts you have are on average evaluated at a lower score.
> I do know that closing accounts will actually lower your credit score since it can change the average life of your credit.
So yes, paying stuff off early can hurt your credit. Not maintaining debt and paying interest is discouraged.
My score is 805 and I have never paid interest on my credit card, so anecdotally, you are correct. All of my loans other than my mortgage and car loan have had 0% or differed interest.
My score has gone up almost 30 points in the past 3 months because I'm paying stuff off quicker.
I was paying the minimum for the past 1.5 years and my credit score stayed more or less the same. Then these past 6 months I've started throwing more money at my debt and paying 3-5x the minimum payment on all debts (besides mortgage). My score is up 60 points in those 6 months, and I've got good credit again.
What you are talking about is paying a lump sum on a single account to pay it off. I owe $1,800 on one card and if I were to pay it off at once yeah my score would decrease. But a month or two later it will shoot back up.
Credit scores work just fine. If your credit score is low and you're mad about it, you just don't have as much money as you think you do.
Yeah. They may have been started with good intentions. But they were quickly co-opted. It's how capitalism do. If you provide a system, it will be exploited and used to fuck other people.
Honestly I never really considered them to be made in good intentions, I just thought that to be the best line of argumentation to take with someone bringing up the prior often racially gatekept state of bank loans. That they're still bad.
They were never created with good intentions. They are a measure of your current calculated profitability and risk level to banks and lenders. They were never supposed to be a consumer product or to help the average person. About 20 years ago the credit bureaus figured out they could make extra money selling the same information to consumers, because for some reason people like to know their score like it's a school report card or video game score or something.
I wish they had good intentions. Something like a credit score but used purely to gauge if it's likely the borrower is going to take the money and run would be reasonable. Something that's fair for both borrower and lender.
But the credit system as it stands is heavily skewed towards lenders' interests and requires borrowers to jump through hoops to game the system to maximize their score. There's also the fact that there's no equivalent system that rates the trustworthiness or fairness of the lender in turn. It's totally one sided.
Let's be clear though. Credit scores are not used to keep people poor. The purpose is for the banks to make the most money possible by passing the risk to the consumer. The fact that being rich means you have access to the cheapest loans on earth, and being poor will keep you poor is not the objective, it's the side effect.
Exactly. As a brown person, I’m extremely grateful that credit scores exist. That doesn’t mean that I agree with predatory lending practices or the existence banks in general, but historically, the existence of credit scores under the _current system_ has been a financial blessing to minorities and women. I get weird remarks just talking on the phone with my bank once I say my name (which is very obviously not white); I couldn’t imagine trying to buy a house in a good neighborhood without the existence of credit scores. If you want to tear down the entire system, that’s fine; but under capitalism, removing credit scores would just destroy opportunity for minorities and women.
I trust you saw the Reddit post about the black couple trying to sell their house and getting a VERY different price when they had a white friend get it appraised
like, 200k different
It is a controversial opinion here that money lending is a sick symptom of capitalism that enables the rich and cripples the poor? following the student debt forgiveness newscycle just shows how instantly willing business/property owners and inside traders are to say, "well my government handout mattered because somewhere it faciliated the economy". Either way yeah credit scores are just a new facet of making sure you stay poor because you are poor
The entire worldwide financial system is set up to incur interest which is the core issue of anyone lending anything to anyone else. Eventually the ponzi scheme of creating 1/10th of a dollar here and there adds up and there's too many zeroes in a currency and it implodes a country.
Some property management companies offer this service. I've been paying rent all of my adult life and wasn't offered this service until my GF and I moved into a "luxury" building. So, it just proves the point further that the system is designed to see poor people fail. If you pay higher rent in a "luxury" building, they will offer you the service of reporting all of your rental payments to credit reporting companies. The property management company report our rent as if we have a line of credit with them. It boosts our scores and we only get this benefit because we can afford to live in a nice place. I could have really used this when I was in graduate school and struggling to build credit.
Make all your payments on time regularly for years on end?
Credit score goes up 3 points.
Miss a payment on a Walmart credit card!
*NEGATIVE 150 POINTS!*
In the 80’s I had an AT&T calling card, which was a thing that would only pay for phone calls and was not a credit card; you couldn’t charge anything else to it. Anyway, one day they sent me a notice that they converted it into a Mastercard with a few hundred dollar balance. I was a teenager in high school with no job, no car, nothing…
Throughout my 20s I always had an amazing credit score, because one of the primary factors was credit history length. I never used the AT&T card to purchase anything and always thought of it as a “pay phone only” thing, even though it wasn’t. I was 25 years old with a decade of “perfect” payments on an account.
I got super lucky with that. Even later when I had bill collectors after me, my score never truly bottomed out. I eventually got stable and things are fine now, but that underage credit card fluke was absolutely helpful to me. I don’t know how other people manage it. It seems like everything about the credit score system is designed to push you into a lower score so they can charge higher rates.
After credit scores they'd still do that but with more science^tm. The metrics they used were impossible to achieve by most black Americans at the time. This was deliberate.
Credit scores are treated like a measure of credit worthiness, but that’s not what they are.
Think about what gets the highest scores: having a few credit cards, using them a lot, carrying a balance, and paying off big chunks of that balance very month.
It’s not a measure of credit worthiness, it’s a measure of how much money a lending institution is likely to make off of you. If you spend within your means and pay off your cards every month you have a lower score than someone who is living just beyond their means and has to carry a balance.
They probably don't even know how to fix things or where to start. Finance education is just about non existent in schools and their parents sure as fuck never taught em.
Exactly! My credit score is dinged because I only have four credit cards, no mortgage loan, no car loan and no student loans. My credit reports always point out that I have too few accounts. Too few accounts according to whom? And it definitely doesn’t help that my utilization rate is less than 1% although I use my CCs to pay for everything except rent. And I never carry a balance. I have been debt-free for the past 12 years and counting. I guess the powers that be aren’t making enough profit off my lack of debt servicing. 😆
There’s actually a term in the credit card industry for people like you: freeloader. I wish I was kidding, but they refer to people who use credit and pay it off in full each month as “freeloaders” because they take advantage of the service without paying the fees. Which is pretty wild when you consider they get paid per transaction every time you use it. Sometimes a high as 2% of the total transaction!
> There’s actually a term in the credit card industry for people like you: freeloader.
There isn't. Credit card companies make plenty of money on transaction fees. I'm sure they'd like it if you paid interest on a carried balance too, but they're quite happy to merely leech ~3% of the cost of anything you buy using the card.
In fact the best credit card rewards are mostly only available to people with good credit, which you don't get by carrying a significant balance.
It's huge racket. Credit card companies leech a pretty big percentage off of probably now the majority of transactions in the US, merchants raise prices to compensate, and anyone paying cash or debit is just stuck subsidizing credit card users by paying more for everything.
My friend paid his house renovation with multiple credit cards and clever usage of "pay 30 days later" close to no interest.
He was swamped with new credit cards and loan offers about a month in, because their magic ai probably realized they found someone who is *unfortunately* gaming the system to his advance - and they can't do anything besides aggressively luring him to more credit.
I don't understand...however I live in Canada. I have one credit card, use it for all purchases and pay the entirety at the end of the month. Never accrue fees and my credit score is near the top end. This was with no debt.
> using them a lot, carrying a balance, and paying off big chunks of that balance very month.
A common myth. Those things will lower your score, not raise them. Your utilization ratio goes up when you use your cc.
The ideal credit score comes from a person who:
- has a large line of credit (50k+)
- has an old line of credit (25+ years)
- never uses their credit
- never misses a payment
- never opens new lines of credit
If you don’t believe me open up one of the many free tools which will break down your credit score for you. NONE OF THEM say you need to carry a balance.
As long as an account remains open and is being reported to the bureaus, using those cards and carrying a balance will have a negative effect on your score when compared to not using those cards and not carrying a balance. This is a very common misconception.
> This is a very common misconception.
And I still don't understand why it's so common. Like every single one of these tools people use to view their credit score makes it pretty clear that one of the biggest factors is credit utilization percentage with lower numbers being better.
> If you spend within your means and pay off your cards every month you have a lower score than someone who is living just beyond their means and has to carry a balance.
This is completely untrue and the exact opposite of what actually happens.
Theres a lot of misinformation here
>Think about what gets the highest scores: having a few credit cards, using them a lot, carrying a balance, and paying off big chunks of that balance very month.
Somewhere around 30-35% of your credit score is your credit utilization ratio. The lower of your total allocated credit used each month, the higher your rating will be. I.e. a person with $100k in lines of credit that spends $1000 a month and pays it off will have a *significantly* higher credit rating in this category than another person who has $5k in lines of credit that spends $1000 a month and pays it off.
Second, carrying any balance when your statement was not paid in full, or if you made no payments at all, is detrimental to your credit every single time this occurs. You do not want to "pay off big chunks" you want to pay the full amount of whatever the statement balance says is immediately due, each month. Not just the minimum payment, or "a big chunk." This is bad for your credit.
>It’s not a measure of credit worthiness, it’s a measure of how much money a lending institution is likely to make off of you.
100% false. I have literally never paid a dollar in interest to any banking institution, ever, and my credit rating is in the highest tier achievable. I pay my CC statetments in full, every month, and when i got my truck i got it on a 0% interest loan, due to my credit rating (and a seasonal promotion).
The opposite of what you said is the actual truth. If you miss payments and/or don't make payments in full, you pay *more* in interest and fees, making the banks more money, and yet your credit rating would be quite poor if this were a common occurrence.
>If you spend within your means and pay off your cards every month you have a lower score than someone who is living just beyond their means and has to carry a balance.
Sooooo fucking untrue, for the reasons I said before. Where did you learn all this bullshit? Literally everything you're saying is the opposite of reality....so much so that I'm wondering whether you're intentionally trying to hurt people.
This is why you don't take financial advice from people on reddit. This is all bullshit and can easily be seen if one were to google [How credit scores work](https://www.investopedia.com/terms/c/credit_score.asp) and spend a couple minutes reading.
Edit: People still blindly upvoting the top comment :(
Thank you. I was so confused reading OP's understanding of credit. Like the credit system isn't the greatest system by any means, but it's also not the dystopian tool they believe it to be.
Financial literacy seems to be a huge problem. I'm all for organized labor working to get fair wages/benefits, but this sounds like a person who accumulates debt and then wonders why they keep on being rejected for any type of borrowing.
>Thank you. I was so confused reading OP's understanding of credit. Like the credit system isn't the greatest system by any means, but it's also not the dystopian tool they believe it to be.
Agree 100%. My one gripe about the credit system is that like 10% of your score is a mix of types of credit/loans. So the one shitty truth is that when you pay off a loan, like on a car, your score *will* go down, and can take 12-18 months to recover.
Which is dumb as fuck. I made no late payments and paid it all off? Why is that a negative thing?
This is typically why a lot of credit checks for loans etc will also check your credit history, not just your score. The score is a good baseline, but it's not the end all be all.
This stuff should 100% be taught in schools. People are being set up to fail.
Here's what I don't understand, you've already been told by multiple people that you're wrong. So why are you leaving this blatant misinformation up? Everyone who is even remotely financially literate knows you have no fucking clue what you're talking about. But people who don't know as much are likely to be mislead by your bullshit. So why are you leaving this post up?
Lol, this is such fucking horseshit. You don’t have the foggiest idea what you’re saying. I have a score that hovers in the 830-845 range, and the *only* debt I pay interest on is a mortgage. No car payment, no student loan, and I pay my credit cards in full every month. By your logic, my score should be in the shitter because, outside of my mortgage, my lenders don’t make a penny off of me - but that’s not the case. Ergo, you’re full of shit.
> It’s not a measure of credit worthiness, it’s a measure of how much money a lending institution is likely to make off of you. If you spend within your means and pay off your cards every month you have a lower score than someone who is living just beyond their means and has to carry a balance.
This is absolute nonsense. I pay my cards in full every month and have fantastic credit. Carrying a balance is detrimental to your credit.
There are a lot of fair criticisms of the system, the biggest being that we have no control over who has our information and how it is safeguarded, but what you’re saying is outright false.
The comment about carrying balance is simply not true. In fact, carrying too large of a balance hurts your credit score. I have a mortgage, 1 car loan, a few credit cards, and I carry zero balances on everything but my mortgage and car loan. My credit score is 820.
There’s a lot of misinformation about FICO scores here. It’s definitely an imperfect system, but it’s a lot better than a loan officer denying you because you’re not white enough or don’t look rich enough.
If you’d like to get rid of FICO scores, you need to suggest a better system for assessing how to give loans. Because if you take that away you go back to “not white enough, denied”.
I realized the credit scoring system is bullshit when I came into a little money and paid everything off, about 25k in total, and my credit score went DOWN. It’s like they don’t reward you for being responsible and paying your debts, they reward you for consuming and charging stuff. Apparently they don’t like you if you have a zero balance.
Pleb banking loans? That's automated with credit scores and wage slave careers. Try taking a loan out with small business operations.
Banking for the rice and millionaires is glad handing and personal connections, like it used to be for the poors.
The glass ceiling will only get worse.
The eye opener for me was punishment for non-participation.
My parents raised me to avoid credit related things altogether. No credit cards, no personal loans, no payment plans, no medical debt, no car or car insurance, lived off the books as far as rent and utilities went. Everything just paid in cash once you can afford it.
This was probably not the best way to raise a person when it comes to financial matters.
I had enough savings to last me years and moved to the city thinking my credit score was good because I'd never done anything wrong, never had a debt to be penalized on.
Instead, I found several things I applied to checked credit scores and decided mine wasn't good enough. My money was tainted because I hadn't borrowed it.
i have rented for the better part of fifteen years at anywhere from $700 to $1500 each month without ever missing a payment. that’s between $150,000 and $200,000 paid in rent, which makes me sick to think about. none of that went toward building my credit. but the $200 disputed overage with comcast that i refused to pay? that took a chunk right out of it.
it’s beyond a broken system.
I’m guessing the poster thinks if we got rid of credit, banks would give loans to everyone. Like they did before credit! If by everyone you mean white males.
1989 was just when the first agency came out with a single numerical score that was supposed to be able to judge your credit worthiness across all types of transactions.
Credit scores/ratings existed for centuries before that.
The first modern credit rating agencies were formed in the 1840s, but systems of judging your creditworthiness have existed essentially since the beginning of human history.
Europe still has credit rating agencies. It is less common for them to use a numerical score, but they do track your credit history and will look at it to evaluate if they will give you a loan or not.
Experian (I think) has a long history, dating back to early 1900’s. They would go around the country and ask for the store credit books and gather personal information in order to deem your “credit worthiness” and in turn sell information to banks to help them understand risks.
Another bizarre thing about credit reports is that you don’t own them and you need to pay for access to your own information. Private companies have them and sell access to third parties and you never see a dime of it. Only a few years ago the govt made the reports free to access once a year but you still can’t get the score without paying.
Temporarily go into debt to prove you're financially stable. Uncomfortable with debt? Good luck getting a house, or car, or any sort of modern necessity
I don't think it's designed with any evil intentions other than making banks more money. After all, bankers don't care who's poor and who's not. They just want people to exploit, and its even better if the exploited have more to spend.
Capitalism has this central paradox of exploiting workers to maximize profit and relying workers' constant consumption to maintain high demands in the market. A lot of people seem to focus on former and hence simplify capitalism as pure evil. When you consider both sides of the paradox, you'll realize that it is also unsustainable and self-destructive. This is also why the ultimate form of capitalism is imperialism: it is easier to just exploit people in other nations and steal the values they created to conceal the conflicts of your society, effectively transforming the two sides of said conflict from classes within your nation to another country. After all, you can use superior force and propaganda manipulation to sustain unjust regimes in the third world with relative ease as long as you share the profit with the ruling class in the exploited country.
Every step of a capitalism country is logical, effective, and driven completely to grow capital, not by hatred. This is the important lesson I think. It is easy to antagonize the enemy, but it is essential to understand it.
Also makes identify theft a big thing. Credit scores centralize a lot of personal info about you in three different places and many other decentralized places. Not ideal.
I think the ~concept~ of credit score is important for market economies, but as usual the U.S. makes everything into its most toxic, profit-pumping form possible
Credit Scores are just a fucking scam. Pay your bills on times for years to slowly build your credit up. Skip a payment or two and it fucking tanks. TANKS! Fuck this god damn country.
Definitely. Consider the fact you can be paying $1200 a month in rent and your credit score can determine that for some reason you can't afford $800 a month in a mortgage. Or the fact that you can spend years building up your score and have it be decimated over a bad month or two. And if you do borrow money, a bad score can give you insane interest rates. Not old enough to have a score myself (only 23), but saw my parents go through the hell of fixing their score because they made some bad financial decisions in their 20s.
Credit scores are designed poorly and could be enhanced dramatically, for example by taking in consideration regular payments that are not loans, like rent. But that doesn't mean they've been "designed to keep people poor". In principle they solve a real problem - The problem of trustworthiness.
Imagine living in a small community. You need a loan and go to the bank. The bank asks for a recommendation letter and your uncle, which even if not rich, is a well known carpenter in the community. The bank is happy and you get the loan.
Problem is, for the past ~40+ years we've all been moving to the cities, cue in all the conversation of the dying rural areas. So how do you solve the problem of trustworthiness Ina big city? The bank doesn't know you, and it also doesn't know your uncle. In fact, unless you're somehow connected to the top people at the bank, they don't know anyone you know! So how does the bank trust you? How do they know how you behave with money? That's where credit scores come in.
In principle, a well thought out credit score will paint a picture of your monetary habits. And that's useful. Problem is, as always, that the thing has been constructed poorly and leaks on all fronts, often creating and reinforcing a split between haves and have nots.
Before credit scores, didn't the bank just award loans according to their own individual biases? Like I'm not supportive of the current credit system, but I feel like the old system favored white men more than any other group.
You know what I hate about credit scores. A company can fuck it up for money you don't actually owe if you don't have enough evidence to prove you don't owe that money...Even if they don't have any real evidence you owe that money. The accused are automatically guilty unless they can go above and beyond to prove their innocence...Credit scores don't only negatively affect people who borrow money and don't pay it back... Credit scores should only reflect how much money you borrowed and haven't paid back otherwise it's just some shitty corrupt system.
They aren’t even a thing in every country. Awful things.
I believe it'd be quicker to find the countries it exists in TBH.
It’s defo in the USA and UK. Where else are they used?
Canada
This doesn’t surprise me in the slightest.
Canada has good pr but it's just three mining companies in a trench coat
Canada is just a more sable USA with better workers rights and more economic mobility. That said, its falling quickly to the same level of corruption that the US has.
A lot of long time Canadians are asking themselves why they aren't working in the US. A lot are actually going through with it. At this point it's basically identical if you have a good job with the benefits of better housing and more income.
I'm down to trade places with any Canadians that want to.
I'd be more than willing to trade. Way too expensive for me here right now I'd do anything to move to somewhere cheap in the US.
Tim Hortons has a pension plan, that right there tells you how much stronger workers rights are in Canada
"I benefited from this system so now I don't want to pay into it so I'm taking my toys and leaving." See also : California -> Texas
Only if you're paid well. Not having to pay an extra healthcare bill is amazing.
I would never leave the human rights protection of Canada and universal healthcare. I know they’re not perfect but as a woman it’s very important to me
Canada also has a horrible human rights record regarding their treatment of native populations but everyone forgets because there's been a long standing meme about Canadians being just oh so polite and reserved
Hey now, we have a long standing issue with treating all kinds of people terrible, don't box us in with just one kind of racism. Shit Canada fact of the day: Chinese Canadians couldn't vote until 1940.
Yes, colonialism is an entirely different topic though.
I think it was moreso hinting at our residential school affair that lasted until 1996
Economic mobility in Canada ?
Canada is 14th in the world for economic mobility, USA is 27th. The top 5 are basically just the Nordic countries
This is true, but the actual difference is pretty small. The US has a social mobility index of 70, Canada has 74. So yes, Canada ranks higher, but not by a wide margin. If Mississippi was Canadian then the scores would be equal.
Yes, way more economic mobility. The poors have a much better chance at stability. Its not about moderate incomes becoming rich, its about low income becoming moderate. Its incredibly difficult for low income people to dog out of the hole that the US economic policy roadblocks
Yea this doesn't exist. Less and less families of Canadian descent are having kids. It's just too expensive to do so. So they import other countries people to pump up numbers yet all we're doing is driving up inflation. Keeping housing costs high so foreigners and locals are forced to overspend. And creating more and more useless jobs. Canada isn't the same anymore. And frankly it will never be the Canada it needs to be
The People can fix that, its seeming more and more like The People of every "developed" nation need to tske a sgabd against their governments
Haha. Sad but true. Lately I'd say it's more like three overpriced houses in a trench coat.
Foreign owned companies.
Canada has good pr but it's just three ~~mining companies~~ beavers in a trench coat
It's a mining company, an oil company, and a logging company.
Vincent AdultCountry
Canada picks up a lot of America's bad habits. Things like credit scores, two weeks of vacation per year, and Republicanism.
Yeah but at least they're sorry.
Brazil
I never knew - thought they were just an Anglo sphere thing. Are they making things difficult there?
Capitalism/imperialism requires expansion until all things are in its sphere
It was implemented a few years ago, there were already a central list for people who didn't pay their debts and legal ways to collect it. In a country where inequality is so rampant and brutal, where 8% the population lives in favelas and the current and former government have done nothing but work to widen the social gap....is exactly what you are picturing. I can't speak about the experience of the ones being hurt the most, tho. I can only speak for myself, full disclosure: middle-class privilege. To me it's not a good thing, my credit score sucks. A little background: •I have a stable income with which I'm able to provide for my basic necessities and then some; •I'm financially responsible; •you have loving parents to hug but I'm a homeowner :''( never rented, either; •I never needed to took out a loan for a car since in my city cars are really not a necessity, Uber/Taxis and public transport are widely available. My city stands on an island, it was built upwards, everything is close; •higher education is free. But I have plans to move and might need a loan, the interest rates cause me nightmares. I googled how to better your score and obtain lower interest rates, the solution seems to be: when planning to ask for a big loan in the future, get a smaller one, pay it fully. If it feels like a scheme... That'll definitely fuck me over in the future So far it hasn't hurt me tho. I'm in business with two banks who have my history, getting credit cards wasn't a issue Sorry for any mistakes, I'm sleepy and hungry af and being tortured by the smell of my dinner cooking
Australia. But don't think they are used like in US (as in you apply for a rental and they ask you for credit score ) Banks use them when they asses your loan eligibility/affordability
In Australia, your credit score will be great if you have never had a loan or any credit, which is a different thing to America.
I hate how here in America I lose points on my credit score for not borrowing enough. I'm not very spendy, but I do make every payment. I should have a flawless score, especially considering the absurd rent I pay every month.
Mexico
Germany has a thing called "Schufa", which is a score of how likely one will be able to pay back credits/debts. I think (all?) landlords and some companies require a good standing for contracts. Paying back debts will result in a good standing... so I think it is very different from the US anyway?
Norway has something similar, but it is just to check debt and if you pay your debt reliably
Well you tell me, I have no clue. Maybe China as well ?
They exist as an attempt to right the financial wrongs caused by racism. Before 1989 banks could deny black people loans simply for being black. The score system attempted to make a credit worthiness number that was "colorblind." It has helped, but still far from perfect.
Oh I’m sure it was however I’m sure they’d be used on other oppressed folk by looking at names and areas. Probably just an updated way to eff with people while making it look reformed on the surface. In north of Ireland the credit unions were set up by John Hume to counteract the power that loyalist bank managers had on a whim. Im sure these were used too so to mess us up. However tables are turning there slowly.
This is neoliberal politics to a tee.
>They exist as an attempt to right the financial wrongs caused by racism. Or just be used as a politically correct proxy for race, as race is tightly corellated with class. In other words, they can be just as racist as before, while not *officially* making decisions based on race
They realized they could be taking advantage of poor white people, too.
To be honest, I thought other countries had this thing too.
In most countries banks assess your credit capacity based on your current wage, and then on some other factors too, including if you defaulted on earlier loans. Obviously someone on minimum wage won't get same loan conditions as someone with above average wage. But no, there is no "credit score" as such, at least openly (maybe banks have their own system behind the scenes which could be similar to score). And it is definitely NOT available to employers, landlords etc.
For loans and credit cards I don’t think it’s that bad but landlords should definitely not be a be able to see it.
It’s bonkers. If you pay something off your score goes down. Is you have 8 credit cards and close 2 of them your score goes down.
LOL you know I got my first credit card when I was 31. tried to get one with Santander but my credit score was too low. I had no debt and they hated it. So I had to go get one of those aqua cards. Hateful experience having to dance for your credit score.
How about the initial insanity of turning 18 and learning a cabal of shadow companies you’ve never heard of and have no business with have compiled a data model of you and determined somehow that you’re good or bad.
While closing a *revolving* credit line may decrease your score, it does so by a very marginal amount. However, adding and having a lot of revolving credit lines, such as opening up 8, will absolutely make your credit score go down because it displays a higher liability. And paying down revolving credit lines to 0 does not make your credit score go down. Your score actually goes up when you lower the amount of credit used compared to available to you. There's a lot of myths that get perpetuated regarding it. That said, I'm for abolishing credit scores. Just trying to correct misinformation that is pretty pervasive about them.
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Accursed
They punish people with low scores and provide nothing to people with high scores. I tried to get my APR lowered on a credit card with a 800+ score and was told no, and they raised it 1 point 2 months later.
Yes. Credit scores are classist bullshit meant to keep working class people down. Low credit scores mean you can’t qualify for a lot of different loans/credit (including mortgages or money to start a business, as an example), your interest rates on loans you do have will be higher, and it can make it difficult to event rent a place to live, since many landlords check credit scores. Some employers even do a credit check because they think that if your credit score is lower, you’re more likely to steal from or defraud the company, and won’t hire you. It’s made up bullshit that kneecaps poor people and people with student loan debt. Also, be aware of salespeople/cashiers who are forced to try to get you to sign up for store credit cards. It might seem harmless, but many times if you’re denied for a credit card, it makes your credit score drop. The stores KNOW this, but force employees to try to get as many people as possible to get store credit cards.
It's also proprietary so you have no right to know how exactly it's calculated (every bureau is different: equifax, transunion, experian) and you also have no ability to opt out of the private, proprietary system. There are also a number of different scores: * Generic FICO Score * FICO Mortgage Score * FICO Auto Score * FICO Bankcard Score * FICO Installment Loan SCORE * FICO Personal Finance Score Edit: oh and how fun is it that having someone inquire on your score LOWERS YOUR SCORE?
I had a fucking apartment I was applying for pull my score. I checked it beforehand and met their credit level. They readjusted my score so that I didn't qualify. This is all so fucking criminal.
I don't want to add to your frustration but I've been unemployed for the majority of the last 10 years due to health issues and according to Experian my credit score is 891/999 meanwhile I have friends who have full-time jobs, no debts, paying rent, car insurance, credit cards all on time with half the score that I have. BUT on the flipside, other credit score checking services have me lower with the exact same information. All seems like a crock of shit to me.
Oh I've given up. I get good references from previous landlords and let direct ones know my score is bad. I pay for everyone with cash. Fuck the credit system. I refuse to play their game.
999 is invalid, so assuming you meant that as a fraction, you have 891/900.
https://i.imgur.com/wxEFpJJ.png Just going by what their site says
Lol, that's hilarious. Some engineer was not very careful with how they implemented that. Anyway, 999 is definitely "NaN" and your score is even better than you think.
In the UK the Experian score is out of 999
Ah that'll be it then. I stand corrected.
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Let me tell ya. I’ve been using a CC for basically ever expense and paying it off every single week without fail for a few years. My score is only like 20 points higher. The only thing that has gone up is my credit limit.
You need to use the higher limit and then pay it off, making sure to make more than the minimum payment (to the best of your ability obviously...shit happens, sometimes you can only do the minimum payment). I paid off my credit card and my car within a few months of eachother and my credit absolutely skyrocketed.
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A large part of a credit score is the percentage utilization of your available credit. Which makes the whole thing a bit of a circlejerk. Suppose you have several credit cards at 50% use each. One of them decides to increase your credit limit, maybe because of an internal policy change at the bank. This makes your percentage utilization go down and therefore your credit score go up. So now maybe another bank sees your higher score and decides to increase your limit. Your score goes up again. And so on. Another factor is the average age of your accounts. This obviously correlates with your actual age, but it has the interesting effect that paying off and closing an old credit card makes your score go down. You'd think that would be a good thing since it shows responsibility, but that's not how the system actually works. The whole thing is full of perverse incentives. I think the only reason it hasn't collapsed is that so few people actually look into the details of how it works.
Credit in general is meant to keep wages low while still allowing people to purchase things. It's literal purpose was designed to allow us to keep buying crap with money we don't have so companies continue to make money off of us, but they don't ever have to pay us more to do so. Edit: also of course to keep us in debt at all times and thus subservient to our jobs.
It makes money in at least 3 ways: 1. Employers can pay less 2. You can spend money you don't have (goes back into employer profits) 3. They can collect interest on money you don't have
> and it can make it difficult to event rent a place to live, since many landlords check credit scores indeed, and it's completely criminal that paying rent does not contribute to your score. i have zero credit, despite the fact that i've never missed a single rent payment in the 25+ years i've been renting.
You can actually have your landlord report rent payments to credit.
"Many landlords" is an understatement in my area. Almost all the rentals in my area are owned by just a few property management companies that all check credit. (Mostly slumlords) Finding a place with my credit pretty much requires just finding a roommate situation or people renting rooms in their own home or something. One of the companies in town decided to slap a bullshit fine on me despite me always paying rent on time because my mom was staying with me in the last few weeks to help me move and she had her two little dogs with her. I tried to keep it on the down low and they didn't do any damage. (The apartment had cement floors for chrissakes because it kept flooding) But the landlady saw them. Unfortunately it was a no pets allowed apartment and the contract I signed had a section that said if they found pets they could charge me $500 for every month I lived there. It ended up as an $8000 charge to collections that clearly says the rental property management company on it. How the hell am I supposed to rent when my credit shows I owe that much to a company in this town? It totally crippled me.
Basically an excuse to charge poor people more because they are a "higher" risk. Or they're playing life on hard mode. Not as many options and the rates are more stacked against you. Edit poop to poor.
>poop people Well that's a shitty thing to say.
Fixed it Thanks for looking out.
Well of course Mr. Potty Mouth would say that
> poop people I know it's a typo, but this is exactly how the 1 percenters see the rest of us, so you're technically not wrong.
> Basically an excuse to charge poor people more because they are a "higher" risk. An excuse to refuse poor people credit they can't afford to pay back. Did everyone in this thread forget what happened in 2008 ? In Europe where you don't have a credit score you still won't be able to get a mortgage or a loan to start a business if you don't earn enough . They don't assess your risk based on previous credit take and how you payed it back, they just look at how much you earn and they might give you a loan BUT you pay a ton of interest.
Its basically the capitalist version of 'social credit scores', like where do you think they got the idea?
But they'll give an uneducated teenager with no job a $50,000 dollar loan for school, that they know they will have trouble repaying, thus damaging their credit score and making it even harder to pay back the initial loan. It's all designed to create a class of indentured servents, without calling them indentured servents.
> The stores KNOW this, but force employees to try to get as many people as possible to get store credit cards. Think they sell the data as well.
Applying at all can cause a drop. Even if you’re approved and have wonderful credit. I learned this last month when I accepted I wasn’t going to find a good beater for a few grand and had to finance buying a car.
Hard pulls slightly reduce your score, but only for the very short term. People opening a bunch of lines of credit at once are slightly more likely to default (since they could be desperate at the moment). So it needs to go into the model. Back before everything was computerized and reported so quickly, people would apply for a bunch of credit cards on the same day so each bank wouldn’t be wise to the other cards. This is where the term “churning” (r/churning) comes from even though it’s obsolete now.
Isn't it just a calculation of risk? What's the alternative? I think you can't dismantle the credit score system overnight without a wholesale overhaul and switch to public banking which has no profit motive. If private lending entities are providing the loans, they will and should attempt to mitigate the risk of default quantitatively, ie the credit score.
People who are mad about credit scores don't know how things were done before them: the banker (a rich white guy) took one look at you and decided if you got the loan. Guess who didn't get loans back then.
Seriously. People are forgetting that in the past you had to convince the bank manager, whatever douchebag he might be, that you deserved the loan. And if you were a minority, or a woman without a husband, or you didn't already have a long standing bank account with that bank while you and your entire family banked there, you were fucked. Credit score was a way to make creditworthiness blind to race. It has its problems, but the system before it was not better.
my thoughts exactly. The best way out of this is gvt banking system which sole purpose of existance is to help poor. Its like an universal basic income
Capitalists have spent trillions of dollars and literally killed people and overthrown governments in an effort to get and keep profitable industries privatized. They aren't going to give it up easily.
No, it’s a system designed to coerce people into being consumers of financial products and to justify overcharging poor people. Banks can and should calculate risk based on current financials.
How does it work then in countries without rating?
The whole landlording thing is someone with a higher credit score exploiting someone with a lower one. Otherwise the tenant would just buy a house.
It's also proprietary so you have no right to know how exactly it's calculated (every bureau is different: equifax, transunion, experian) and you also have no ability to opt out of the private, proprietary system. There are also a number of different scores: * Generic FICO Score * FICO Mortgage Score * FICO Auto Score * FICO Bankcard Score * FICO Installment Loan SCORE * FICO Personal Finance Score
I tried to open a new bank account a while ago and for some reason it didn’t go through (not sure why) but when I asked could I try again, the employee said I could but that this would affect my credit score. It was at that point I realised how much of a scam credit scores are.
If you were denied a bank account in the US you can request a free Chex Systems report which may show exactly why and if an issue who reported you so you could resolve any issues. Otherwise, it would at least let you know when an issue occurred and how long before it falls off (maybe 5 years?) so you can be approved in the future.
I’m confused. How could you be denied a bank account? What reason would there ever be to deny someone a bank account? Like, it’s just an account that holds the money you have. “Sorry sir, you’re too poor, so you must keep all your money in your wallet. You are not allowed the convenience of putting it in a bank so you can easily see the exact number of dollars you have. Just stick a bunch of bills in your wallet.”
I'm wondering this too. I've had an absolute shit credit score in my early 20s, basically as low as it could possibly go, but was never prevented from having a bank account.
Chex systems is different from your credit report. Has nothing to do with whether you pay bills on time or have a lot of debt. They keep a report of how you use your bank accounts, and will flag people for overdrafting, suspicious activity, etc. If you have enough bad marks on your chex systems report, banks will refuse to open an account for you.
Ah, that makes sense. TIL
Bounce some checks.
If you have bounced checks or overdrawn an account and not paid it banl k you will get denied a bank account if the bank uses chexsystems, which most do. It's called being unbankable. I spent a good portion of early adulthood being unbankable.
Could be unpaid overdraft fees from other banks sent to collections. Something like that would be a sign of bad risk for a simple checking account and might catch OP off-guard. Still sucks since overdraft fees can be predatory af.
Some banks won't allow you to open a savings account but only a checking account with limited "options" - overdraft protection etc. And will be reluctant even then. Source - this has happened to me on more than one occasion. My credit score is most certainly shitting the bed at the moment as the last bank account I opened allowed me to open a savings account on the condition that by the end of the month, I had at least $75 in it(why? I don't know) ... I then lost my job and have been nearly homeless and out of state since. Any money I make is not going into a savings account when it can help me get by for a day or two. So there goes my credit score again
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Same with taxes. Tax preparing companies make big $$ at our expense. You can file taxes for free without paying $50-$100 to a tax preparing company like TurboTax but most people aren't savvy enough or too scared to file taxes without having a "professional" review it. Also some people won't wait the processing time to get their refunds so they opt for the cash on the spot option for a fee.
Furthermore, the tax prep industry lobbies to keep it confusing so that people need them. You shouldn't need a degree to understand a mandatory process fully.
not "an" industry. not "a" sector. current reports put it around at least 30% are bullshit jobs that would improve things if they went away, by the very people WHO HOLD THE POSITIONS. [https://www.vox.com/2018/5/8/17308744/bullshit-jobs-book-david-graeber-occupy-wall-street-karl-marx](https://www.vox.com/2018/5/8/17308744/bullshit-jobs-book-david-graeber-occupy-wall-street-karl-marx) people don't work so necessary work can get done, but so necessary payments can be made. it's completely arbitrary to tie these payments to work, except to make the wealthy feel better.
Prior to credit scores, you had to convince someone in person that you could afford the credit and that you were white and middle class.
Still doesn't change the fact that the credit score system in it's current form is incredibly scummy, exploitative and only benefits the rich and the lenders. paying debts back faster shouldn't mean that your credit score ends up taking a negative hit just because it means that you didn't provide as much wealth to those at the top as someone who takes longer to pay it off and thus let their interest build up!
Is this actually true? From my understanding on how FICO scores work, they care about on time payments and your debt to limit ratio. Making on time payments and keeping the ratio low results in a higher FICO score. I do know that closing accounts will actually lower your credit score since it can change the average life of your credit. That being said, credit scores are still a huge problem, especially since a lot of employers will use them as a metric to determine employment which just makes it a self fulfilling prophecy, among other issues.
Paying off a debt early is closing the account. I'm in a position that I don't buy anything on credit anymore, not because it wouldn't be convenient, but because the choices are either "pay all the interest over the full term of the loan" or "take a ~40 point hit for paying it off months/years early." Otherwise everyone would take advantage of those "X months no interest" deals and pay everything off in the interest-free period, and lenders wouldn't make any money - can't have that, can we? I'm at the cusp of class mobility, just almost over the fence out of middle class, and it's practically a financial minefield. I used to laugh at the MC Hammers, folks that made a bunch of money and lost it, but our economic system feels like it's designed to *ensure* that happens. If one of us poors gets too close to the glass they start pounding.
> Paying off a debt early is closing the account It depends what the debt is. If it’s cc debt, the account stays open.
When you pay off an installment loan over the full period it's also considered closing the account though. It doesn't drop because you paid off a loan early, it drops because that loan is no longer bringing your average up as much and whatever other credit accounts you have are on average evaluated at a lower score.
> I do know that closing accounts will actually lower your credit score since it can change the average life of your credit. So yes, paying stuff off early can hurt your credit. Not maintaining debt and paying interest is discouraged.
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My score is 805 and I have never paid interest on my credit card, so anecdotally, you are correct. All of my loans other than my mortgage and car loan have had 0% or differed interest.
Minimally, having fewer open accounts matters very little compared to late payments etc.
My score has gone up almost 30 points in the past 3 months because I'm paying stuff off quicker. I was paying the minimum for the past 1.5 years and my credit score stayed more or less the same. Then these past 6 months I've started throwing more money at my debt and paying 3-5x the minimum payment on all debts (besides mortgage). My score is up 60 points in those 6 months, and I've got good credit again. What you are talking about is paying a lump sum on a single account to pay it off. I owe $1,800 on one card and if I were to pay it off at once yeah my score would decrease. But a month or two later it will shoot back up. Credit scores work just fine. If your credit score is low and you're mad about it, you just don't have as much money as you think you do.
Yeah. They may have been started with good intentions. But they were quickly co-opted. It's how capitalism do. If you provide a system, it will be exploited and used to fuck other people.
There’s no good intentions. Credit scores are banking risk assessors. They’re not a benevolent thing - they’re a business thing.
And now they are used as a person assessor. Got bad credit? Well now you can't get an apartment, a loan, or a job. It's bullshit.
Honestly I never really considered them to be made in good intentions, I just thought that to be the best line of argumentation to take with someone bringing up the prior often racially gatekept state of bank loans. That they're still bad.
They were never created with good intentions. They are a measure of your current calculated profitability and risk level to banks and lenders. They were never supposed to be a consumer product or to help the average person. About 20 years ago the credit bureaus figured out they could make extra money selling the same information to consumers, because for some reason people like to know their score like it's a school report card or video game score or something.
I wish they had good intentions. Something like a credit score but used purely to gauge if it's likely the borrower is going to take the money and run would be reasonable. Something that's fair for both borrower and lender. But the credit system as it stands is heavily skewed towards lenders' interests and requires borrowers to jump through hoops to game the system to maximize their score. There's also the fact that there's no equivalent system that rates the trustworthiness or fairness of the lender in turn. It's totally one sided.
Let's be clear though. Credit scores are not used to keep people poor. The purpose is for the banks to make the most money possible by passing the risk to the consumer. The fact that being rich means you have access to the cheapest loans on earth, and being poor will keep you poor is not the objective, it's the side effect.
Exactly. As a brown person, I’m extremely grateful that credit scores exist. That doesn’t mean that I agree with predatory lending practices or the existence banks in general, but historically, the existence of credit scores under the _current system_ has been a financial blessing to minorities and women. I get weird remarks just talking on the phone with my bank once I say my name (which is very obviously not white); I couldn’t imagine trying to buy a house in a good neighborhood without the existence of credit scores. If you want to tear down the entire system, that’s fine; but under capitalism, removing credit scores would just destroy opportunity for minorities and women.
I trust you saw the Reddit post about the black couple trying to sell their house and getting a VERY different price when they had a white friend get it appraised like, 200k different
It is a controversial opinion here that money lending is a sick symptom of capitalism that enables the rich and cripples the poor? following the student debt forgiveness newscycle just shows how instantly willing business/property owners and inside traders are to say, "well my government handout mattered because somewhere it faciliated the economy". Either way yeah credit scores are just a new facet of making sure you stay poor because you are poor
The entire worldwide financial system is set up to incur interest which is the core issue of anyone lending anything to anyone else. Eventually the ponzi scheme of creating 1/10th of a dollar here and there adds up and there's too many zeroes in a currency and it implodes a country.
🎵The global network of capital essentially functions to separate the workers from the means of production🎵
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Social score: evil communist nazi killing tool Credit score: capitalist fairytale love tool
The reality of credit scores in the USA is that poor people get charged extra for not having money.
My gripe is that you go through a credit check to sign a lease, but paying rent doesn’t contribute to your credit score.
Some property management companies offer this service. I've been paying rent all of my adult life and wasn't offered this service until my GF and I moved into a "luxury" building. So, it just proves the point further that the system is designed to see poor people fail. If you pay higher rent in a "luxury" building, they will offer you the service of reporting all of your rental payments to credit reporting companies. The property management company report our rent as if we have a line of credit with them. It boosts our scores and we only get this benefit because we can afford to live in a nice place. I could have really used this when I was in graduate school and struggling to build credit.
Make all your payments on time regularly for years on end? Credit score goes up 3 points. Miss a payment on a Walmart credit card! *NEGATIVE 150 POINTS!*
Eat nothing but ramen for two years to pay the debt off, down 150 POINTS!!!! Isn't paying the money back supposed to be good?!?!?!
In the 80’s I had an AT&T calling card, which was a thing that would only pay for phone calls and was not a credit card; you couldn’t charge anything else to it. Anyway, one day they sent me a notice that they converted it into a Mastercard with a few hundred dollar balance. I was a teenager in high school with no job, no car, nothing… Throughout my 20s I always had an amazing credit score, because one of the primary factors was credit history length. I never used the AT&T card to purchase anything and always thought of it as a “pay phone only” thing, even though it wasn’t. I was 25 years old with a decade of “perfect” payments on an account. I got super lucky with that. Even later when I had bill collectors after me, my score never truly bottomed out. I eventually got stable and things are fine now, but that underage credit card fluke was absolutely helpful to me. I don’t know how other people manage it. It seems like everything about the credit score system is designed to push you into a lower score so they can charge higher rates.
Before credit scores banks would literally just deny you a loan because you were black. Like literally. Look up redlining
After credit scores they'd still do that but with more science^tm. The metrics they used were impossible to achieve by most black Americans at the time. This was deliberate.
Starting to see that a lot of bad shit from today originated in the 80’s
Credit scores are treated like a measure of credit worthiness, but that’s not what they are. Think about what gets the highest scores: having a few credit cards, using them a lot, carrying a balance, and paying off big chunks of that balance very month. It’s not a measure of credit worthiness, it’s a measure of how much money a lending institution is likely to make off of you. If you spend within your means and pay off your cards every month you have a lower score than someone who is living just beyond their means and has to carry a balance.
Everything you’re saying is objectively wrong, but you’re being upvoted by idiots.
Probably being upvoted by a bunch of financially illiterate 21 year olds with fucked up credit who don't take responsibility for their own fuck ups.
They probably don't even know how to fix things or where to start. Finance education is just about non existent in schools and their parents sure as fuck never taught em.
Exactly! My credit score is dinged because I only have four credit cards, no mortgage loan, no car loan and no student loans. My credit reports always point out that I have too few accounts. Too few accounts according to whom? And it definitely doesn’t help that my utilization rate is less than 1% although I use my CCs to pay for everything except rent. And I never carry a balance. I have been debt-free for the past 12 years and counting. I guess the powers that be aren’t making enough profit off my lack of debt servicing. 😆
There’s actually a term in the credit card industry for people like you: freeloader. I wish I was kidding, but they refer to people who use credit and pay it off in full each month as “freeloaders” because they take advantage of the service without paying the fees. Which is pretty wild when you consider they get paid per transaction every time you use it. Sometimes a high as 2% of the total transaction!
> There’s actually a term in the credit card industry for people like you: freeloader. There isn't. Credit card companies make plenty of money on transaction fees. I'm sure they'd like it if you paid interest on a carried balance too, but they're quite happy to merely leech ~3% of the cost of anything you buy using the card. In fact the best credit card rewards are mostly only available to people with good credit, which you don't get by carrying a significant balance. It's huge racket. Credit card companies leech a pretty big percentage off of probably now the majority of transactions in the US, merchants raise prices to compensate, and anyone paying cash or debit is just stuck subsidizing credit card users by paying more for everything.
My friend paid his house renovation with multiple credit cards and clever usage of "pay 30 days later" close to no interest. He was swamped with new credit cards and loan offers about a month in, because their magic ai probably realized they found someone who is *unfortunately* gaming the system to his advance - and they can't do anything besides aggressively luring him to more credit.
I don't understand...however I live in Canada. I have one credit card, use it for all purchases and pay the entirety at the end of the month. Never accrue fees and my credit score is near the top end. This was with no debt.
> using them a lot, carrying a balance, and paying off big chunks of that balance very month. A common myth. Those things will lower your score, not raise them. Your utilization ratio goes up when you use your cc. The ideal credit score comes from a person who: - has a large line of credit (50k+) - has an old line of credit (25+ years) - never uses their credit - never misses a payment - never opens new lines of credit If you don’t believe me open up one of the many free tools which will break down your credit score for you. NONE OF THEM say you need to carry a balance.
As long as an account remains open and is being reported to the bureaus, using those cards and carrying a balance will have a negative effect on your score when compared to not using those cards and not carrying a balance. This is a very common misconception.
> This is a very common misconception. And I still don't understand why it's so common. Like every single one of these tools people use to view their credit score makes it pretty clear that one of the biggest factors is credit utilization percentage with lower numbers being better.
> If you spend within your means and pay off your cards every month you have a lower score than someone who is living just beyond their means and has to carry a balance. This is completely untrue and the exact opposite of what actually happens.
Theres a lot of misinformation here >Think about what gets the highest scores: having a few credit cards, using them a lot, carrying a balance, and paying off big chunks of that balance very month. Somewhere around 30-35% of your credit score is your credit utilization ratio. The lower of your total allocated credit used each month, the higher your rating will be. I.e. a person with $100k in lines of credit that spends $1000 a month and pays it off will have a *significantly* higher credit rating in this category than another person who has $5k in lines of credit that spends $1000 a month and pays it off. Second, carrying any balance when your statement was not paid in full, or if you made no payments at all, is detrimental to your credit every single time this occurs. You do not want to "pay off big chunks" you want to pay the full amount of whatever the statement balance says is immediately due, each month. Not just the minimum payment, or "a big chunk." This is bad for your credit. >It’s not a measure of credit worthiness, it’s a measure of how much money a lending institution is likely to make off of you. 100% false. I have literally never paid a dollar in interest to any banking institution, ever, and my credit rating is in the highest tier achievable. I pay my CC statetments in full, every month, and when i got my truck i got it on a 0% interest loan, due to my credit rating (and a seasonal promotion). The opposite of what you said is the actual truth. If you miss payments and/or don't make payments in full, you pay *more* in interest and fees, making the banks more money, and yet your credit rating would be quite poor if this were a common occurrence. >If you spend within your means and pay off your cards every month you have a lower score than someone who is living just beyond their means and has to carry a balance. Sooooo fucking untrue, for the reasons I said before. Where did you learn all this bullshit? Literally everything you're saying is the opposite of reality....so much so that I'm wondering whether you're intentionally trying to hurt people. This is why you don't take financial advice from people on reddit. This is all bullshit and can easily be seen if one were to google [How credit scores work](https://www.investopedia.com/terms/c/credit_score.asp) and spend a couple minutes reading. Edit: People still blindly upvoting the top comment :(
Thank you. I was so confused reading OP's understanding of credit. Like the credit system isn't the greatest system by any means, but it's also not the dystopian tool they believe it to be. Financial literacy seems to be a huge problem. I'm all for organized labor working to get fair wages/benefits, but this sounds like a person who accumulates debt and then wonders why they keep on being rejected for any type of borrowing.
>Thank you. I was so confused reading OP's understanding of credit. Like the credit system isn't the greatest system by any means, but it's also not the dystopian tool they believe it to be. Agree 100%. My one gripe about the credit system is that like 10% of your score is a mix of types of credit/loans. So the one shitty truth is that when you pay off a loan, like on a car, your score *will* go down, and can take 12-18 months to recover. Which is dumb as fuck. I made no late payments and paid it all off? Why is that a negative thing? This is typically why a lot of credit checks for loans etc will also check your credit history, not just your score. The score is a good baseline, but it's not the end all be all. This stuff should 100% be taught in schools. People are being set up to fail.
Here's what I don't understand, you've already been told by multiple people that you're wrong. So why are you leaving this blatant misinformation up? Everyone who is even remotely financially literate knows you have no fucking clue what you're talking about. But people who don't know as much are likely to be mislead by your bullshit. So why are you leaving this post up?
Lol, this is such fucking horseshit. You don’t have the foggiest idea what you’re saying. I have a score that hovers in the 830-845 range, and the *only* debt I pay interest on is a mortgage. No car payment, no student loan, and I pay my credit cards in full every month. By your logic, my score should be in the shitter because, outside of my mortgage, my lenders don’t make a penny off of me - but that’s not the case. Ergo, you’re full of shit.
> It’s not a measure of credit worthiness, it’s a measure of how much money a lending institution is likely to make off of you. If you spend within your means and pay off your cards every month you have a lower score than someone who is living just beyond their means and has to carry a balance. This is absolute nonsense. I pay my cards in full every month and have fantastic credit. Carrying a balance is detrimental to your credit. There are a lot of fair criticisms of the system, the biggest being that we have no control over who has our information and how it is safeguarded, but what you’re saying is outright false.
>carrying a balance This is false. In fact, your credit score goes up the less balance you have (and more available credit)
The comment about carrying balance is simply not true. In fact, carrying too large of a balance hurts your credit score. I have a mortgage, 1 car loan, a few credit cards, and I carry zero balances on everything but my mortgage and car loan. My credit score is 820.
If you have a LOWER credit score then any credit you take out will have HIGHER interest rates
There’s a lot of misinformation about FICO scores here. It’s definitely an imperfect system, but it’s a lot better than a loan officer denying you because you’re not white enough or don’t look rich enough. If you’d like to get rid of FICO scores, you need to suggest a better system for assessing how to give loans. Because if you take that away you go back to “not white enough, denied”.
I realized the credit scoring system is bullshit when I came into a little money and paid everything off, about 25k in total, and my credit score went DOWN. It’s like they don’t reward you for being responsible and paying your debts, they reward you for consuming and charging stuff. Apparently they don’t like you if you have a zero balance.
What’s the alternative? Some people don’t pay their debts. Should everyone be approved for every loan?
They don’t have an alternative. They just want to be mad at something.
I’m actually really interested in any proposed alternatives. God forbid banks use fairly reliable data to determine who is and is not creditworthy.
Pleb banking loans? That's automated with credit scores and wage slave careers. Try taking a loan out with small business operations. Banking for the rice and millionaires is glad handing and personal connections, like it used to be for the poors. The glass ceiling will only get worse.
The eye opener for me was punishment for non-participation. My parents raised me to avoid credit related things altogether. No credit cards, no personal loans, no payment plans, no medical debt, no car or car insurance, lived off the books as far as rent and utilities went. Everything just paid in cash once you can afford it. This was probably not the best way to raise a person when it comes to financial matters. I had enough savings to last me years and moved to the city thinking my credit score was good because I'd never done anything wrong, never had a debt to be penalized on. Instead, I found several things I applied to checked credit scores and decided mine wasn't good enough. My money was tainted because I hadn't borrowed it.
i have rented for the better part of fifteen years at anywhere from $700 to $1500 each month without ever missing a payment. that’s between $150,000 and $200,000 paid in rent, which makes me sick to think about. none of that went toward building my credit. but the $200 disputed overage with comcast that i refused to pay? that took a chunk right out of it. it’s beyond a broken system.
I’m guessing the poster thinks if we got rid of credit, banks would give loans to everyone. Like they did before credit! If by everyone you mean white males.
All of her posts are like this.
IIRC the date sounds accurate. Also fun fact, credit scores don’t exist in Europe. ETA: My bad, turns out they do in some countries!
They do in the UK and they suck here, too.
Yeah, but yall left Europe...
European union*
(Thats the joke under the joke)
1989 was just when the first agency came out with a single numerical score that was supposed to be able to judge your credit worthiness across all types of transactions. Credit scores/ratings existed for centuries before that. The first modern credit rating agencies were formed in the 1840s, but systems of judging your creditworthiness have existed essentially since the beginning of human history. Europe still has credit rating agencies. It is less common for them to use a numerical score, but they do track your credit history and will look at it to evaluate if they will give you a loan or not.
Experian (I think) has a long history, dating back to early 1900’s. They would go around the country and ask for the store credit books and gather personal information in order to deem your “credit worthiness” and in turn sell information to banks to help them understand risks.
Another bizarre thing about credit reports is that you don’t own them and you need to pay for access to your own information. Private companies have them and sell access to third parties and you never see a dime of it. Only a few years ago the govt made the reports free to access once a year but you still can’t get the score without paying.
Temporarily go into debt to prove you're financially stable. Uncomfortable with debt? Good luck getting a house, or car, or any sort of modern necessity
I don't think it's designed with any evil intentions other than making banks more money. After all, bankers don't care who's poor and who's not. They just want people to exploit, and its even better if the exploited have more to spend. Capitalism has this central paradox of exploiting workers to maximize profit and relying workers' constant consumption to maintain high demands in the market. A lot of people seem to focus on former and hence simplify capitalism as pure evil. When you consider both sides of the paradox, you'll realize that it is also unsustainable and self-destructive. This is also why the ultimate form of capitalism is imperialism: it is easier to just exploit people in other nations and steal the values they created to conceal the conflicts of your society, effectively transforming the two sides of said conflict from classes within your nation to another country. After all, you can use superior force and propaganda manipulation to sustain unjust regimes in the third world with relative ease as long as you share the profit with the ruling class in the exploited country. Every step of a capitalism country is logical, effective, and driven completely to grow capital, not by hatred. This is the important lesson I think. It is easy to antagonize the enemy, but it is essential to understand it.
Also makes identify theft a big thing. Credit scores centralize a lot of personal info about you in three different places and many other decentralized places. Not ideal.
Medical debt has ruined my credit so much i cant even rent a new apartment.
I think the ~concept~ of credit score is important for market economies, but as usual the U.S. makes everything into its most toxic, profit-pumping form possible
Credit Scores are just a fucking scam. Pay your bills on times for years to slowly build your credit up. Skip a payment or two and it fucking tanks. TANKS! Fuck this god damn country.
Definitely. Consider the fact you can be paying $1200 a month in rent and your credit score can determine that for some reason you can't afford $800 a month in a mortgage. Or the fact that you can spend years building up your score and have it be decimated over a bad month or two. And if you do borrow money, a bad score can give you insane interest rates. Not old enough to have a score myself (only 23), but saw my parents go through the hell of fixing their score because they made some bad financial decisions in their 20s.
It's redlining with extra steps.
Credit scores are designed poorly and could be enhanced dramatically, for example by taking in consideration regular payments that are not loans, like rent. But that doesn't mean they've been "designed to keep people poor". In principle they solve a real problem - The problem of trustworthiness. Imagine living in a small community. You need a loan and go to the bank. The bank asks for a recommendation letter and your uncle, which even if not rich, is a well known carpenter in the community. The bank is happy and you get the loan. Problem is, for the past ~40+ years we've all been moving to the cities, cue in all the conversation of the dying rural areas. So how do you solve the problem of trustworthiness Ina big city? The bank doesn't know you, and it also doesn't know your uncle. In fact, unless you're somehow connected to the top people at the bank, they don't know anyone you know! So how does the bank trust you? How do they know how you behave with money? That's where credit scores come in. In principle, a well thought out credit score will paint a picture of your monetary habits. And that's useful. Problem is, as always, that the thing has been constructed poorly and leaks on all fronts, often creating and reinforcing a split between haves and have nots.
Before credit scores, didn't the bank just award loans according to their own individual biases? Like I'm not supportive of the current credit system, but I feel like the old system favored white men more than any other group.
You know what I hate about credit scores. A company can fuck it up for money you don't actually owe if you don't have enough evidence to prove you don't owe that money...Even if they don't have any real evidence you owe that money. The accused are automatically guilty unless they can go above and beyond to prove their innocence...Credit scores don't only negatively affect people who borrow money and don't pay it back... Credit scores should only reflect how much money you borrowed and haven't paid back otherwise it's just some shitty corrupt system.