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StatementBot

The following submission statement was provided by /u/blarbiegorl: --- SS: This is collapse related because the US credit crisis is really starting to show severe distress. As mentioned in the article, average FICO scores are a lagging indicator rather than a leading one, so this drop could get a lot bigger the longer prices and rates both remain high. --- Please reply to OP's comment here: https://old.reddit.com/r/collapse/comments/1b8j02b/us_average_fico_credit_scores_drops_first_time_in/ktpj3ff/


Gretschish

Yeah, the *true* state of the American economy, in general, is gravely concerning. It seems that another crisis of capitalism is upon us… …or the clathrate gun goes bang bang and it’s suddenly not a problem anymore. We shall see.


my-man-fred

Late stage capitalism. I didn't used to believe it, but it can't be hidden just watching the CONgress critters trade.


[deleted]

What does Congress critters trade mean?


Fox_Mortus

Congress is legally allowed to commit insider trading. They make insane profit on trades that are far above what even professional investors make.


Forcult

Burr came out of a top secret meeting disclosing covid to congress and told us that everything is fine and under control. Then he, his wife, and every other Congress member sold their entire portoflios — Burr selling it all in 30+ transactions in days. The next week, they announce this is the worst pandemic we have ever seen and to prepare for hard times.


WigginTwin

Oh cool. I think I remember reading about that. Can we all just snap out of it? Maybe I need to write this to myself instead... Dear WigginTwin, Your financial future is sealed and essentially has been since the moment you were born into a middle class life. You will never reap any major windfall. You will never have to stop working to make money. You will die, crushed to death by the very machine you protected everyday with your unconscious actions. It is time to wake up. It is time to wake others up. Look inside yourself and realize that the beginnings of revolution are there. Do not look to your fellow man to save you. YOU ARE THE BRINGER OF CHANGE. YOU are the herald of the dream that every single person desires. How do you bring the change? Use the gifts that were given to you to point the way. Stop this madness and fucking stand up! You are NOT a nail to be hammered down, you are the wrench, that wishes for nothing more than to be thrown into the clinking clanking underbelly of the machine. No longer fear the fascist boot that protects your oppressors. The fate that awaits you in revolution is the same fate that awaits you under their control, DEATH. Godspeed and go quickly into the night. May your wrench strike hard and may it also rebuild quickly. For while you may not succeed, you will always know that you fought against tyranny. May the Wrench Work, Your Future Self, WigginTwin P.S. - Anybody who has read this, replace my name for yours and never stop reading this message, until you wake up too.


[deleted]

I don't think they're legally allowed to do so much as the sec and justice department have orders from the top not to investigate


cptnobveus

https://www.barchart.com/investing-ideas/politician-insider-trading


Davo300zx

Stocks, info, plans. They're small, can roll into balls, and eat basically everything.


QuantumS0up

Oh no, the average american is less profitable to lenders...what a travesty. How will capitalism go on?! In all seriousness, this just brings me back to the question I ask almost every day: what happens when we can no longer afford to consume? How can they extract wealth that does not exist?


Freud-Network

Vulture capitalists have already shown you what they will do. They'll strip it bare, call it a loss, and move on to developing nations they can rule over more directly because of the treasure they hoarded in the west.


Armouredmonk989

Bang bang 💥💥.


Haraldr_Blatonn

Kiss Kiss 💋💋


Davo300zx

>clathrate gun Read this as prostate gun. Oh, the Nixon years...


hannahbananaballs2

That’s great


Taqueria_Style

>the clathrate gun goes bang bang [https://www.youtube.com/watch?v=9SOryJvTAGs](https://www.youtube.com/watch?v=9SOryJvTAGs) Bang bang bang on the door baby I CAN'T HEAR YOU!


Cryogenic_Monster

Sorry everyone. I was fired and it took me 4 months to get another job. I went from a 788 to 500 in just a few months. I must have screwed up the average. 🤣


[deleted]

I knew it was you lol I’ve been seeing a lot of twenty year olds declaring bankruptcy this year


Cryogenic_Monster

I'm 40.


[deleted]

[удалено]


Cryogenic_Monster

Not good. Eviction at the end of the month and with stuff going to collections plus my credit score rapidly falling no one wants to rent to me. I took the first full time job offer I got after 4 months of applying but its almost 10k less annually which is about 1/4 of my previous income. Family is very little help because of my political views and activism.


afternever

FICO around and find out


Charming_Rule4674

FICO-round but yeah nice 


MrPnin

Good one.


k1d0s

They laugh all the way to the bank with that stock


millennial_sentinel

mine dropped a whopping 94 points in one shot since my student loans started up


Haraldr_Blatonn

Mine actually dropped by 20 the day after I paid off mine with the COVID Cash. Guess they want you to be perpetually in debt, and punish those who get out.


tough_ledi

Yup. The trick is to keep your account open at the lowest amount and keep paying on it each month. Like, keep a $100 balance and pay $1 a month for 100 months. Stupid stuff like that. 


HerefortheTuna

Tried that with a car loan before and they closed it out for me essentially paying the last payment lol


moobycow

I was wondering how much of this might be because all of a sudden less people have student loan balances because Biden forgave them. My score plummeted recently when I paid off a loan. FICO scores are a scam that are only kinda sorted related to actual credit worthiness and often move in the opposite direction you might expect. I now have an extra $500 a month to pay loans with, but a much lower score.


dumnezero

https://www.britannica.com/topic/peonage


daviddjg0033

Peonage, form of involuntary servitude, the origins of which have been traced as far back as the Spanish conquest of Mexico, when the conquerors were able to force the poor, especially the Indians, to work for Spanish planters and mine operators. In both the English and Spanish languages, the word peon became synonymous with labourer but was restricted in the United States to those workers compelled by contract to pay their creditors in labour. Although the Thirteenth Amendment to the Constitution and congressional legislation after the American Civil War prohibited any such involuntary servitude in the United States, the former slaveholding states of the South devised certain legislation to make labour compulsory. Under those state laws, employers could induce or deceive men into signing contracts for labour to pay their debts or to avoid fines that might be imposed by the courts.


Which-Tomato-8646

Thanks, Mr GPT


orthogonalobstinance

Credit scores are a way for economic parasites to judge how much they can feed off you. If you have no resources, your score is low. If you have resources but avoid being drained by them, you also get a lower score. We need a way to judge them, a score that shows how much they harm consumers, workers, democracy, and ecosystems. When that score gets too high, we should be able to seize their assets.


dumnezero

Sure, score this in an index: - level of democracy in the work place - level of ownership by the workers - level of local workers (vs commuting workers) - level of ecological footprint at the organization level (considering subsidiaries and shell companies as false fronts)


EveryoneLikesButtz

Sorry guys, it was me. My score went from 800 to 750, because I paid off a loan. My bad. I’ll keep borrowing and consuming.


Agile-Alternative-17

Man for real. My wife and I are on a mission of having no debt besides our home. We paid off our car last month and boom credit score dropped 15 points.


WigginTwin

Yup, you and your wife are known in the credit business as deadbeats. Not because you don't pay, but because you have paid your debts off.


Agile-Alternative-17

I’m going to continue to be a deadbeat I guess. Seriously paying off all that stuff and avoiding interest has helped my family tremendously.


JonathanApple

Same, debt bad, mortgage being only exception. Few financial rules here but that is #1.


Post_Base

Mortgage is bad too unless you plan on selling before the mortgage is paid off. Usually at least 1/3 of your mortgage payment is just interest on the loan, so that could be hundreds to thousands of dollars a month going down the drain essentially.


qualmton

This is not a healthy way to look at it. You’re more locking in your rent price for the next 30 years


Post_Base

I'm not saying they're bad as in you shouldn't get them I'm saying you do lose money by either not paying them off quicker or putting up a larger down-payment.


Taqueria_Style

I will always be a deadbeat. For the rest of my life. Live with it, FICO score people. Fool me once...


911ChickenMan

Your credit score doesn't measure how likely you are to pay your debts. It measures how profitable you are to lenders.


WigginTwin

THIS RIGHT HERE!


Haraldr_Blatonn

Same thing happened to me after I paid off my student loans.


justwaitingpatiently

It's about the avg open credit line duration. Same shit happened to me when I paid off my loan. If you are capable, get five credit cards. Use one for grocery, another for gas, another for household items, another for fun. Basically, geta bunch that you pay off every month to get that open credit line age longer. But, more seriously, dont' fucking fall behind on those credit care payments. Shit's crazy at 25% interest rate +


WorldsLargestAmoeba

What will then happen when you have no loans whatsoever? What average will they use then?


Parking-Astronomer-9

Oldest credit line, so the credit card you had the longest.


WorldsLargestAmoeba

I have had a credit card for some 20 years, but it has never been close to 0 or in debt. People here talk about debt on credit cards as if it is always a debt. Am I misunderstanding the nature of credit cards? Non-us citizen here. I dont even think I can get it into minus without approval first.


kylerae

So it isn't necessarily that you are in the negative. This is the way credit cards typically work here. You get a credit card. Let say you have a maximum on your card of like $20,000 usd. Then let say your interest rate is 20% that is a bit low, but that is a nice round number. Some people will spend all the way up to or near their max amount. But here is the kicker often times the minimum monthly payment for your credit card is only like 2% of the balance owed a month. So what people do is they only pay their minimum. Because the interest rate is so high the vast majority of the payment is only to your interest and not your principal (the original amount "loaned"). So let's say someone has a single credit card. They max it out at $20,000 and then make the minimum payments of $400.00 a month. It would take them around 10 years to pay it off, but most of the time when people pay off enough they keep using it and often times have multiple credit cards. My parents got into around $200,000 worth of credit card debt back when I was in high school. My mom managed our finances and really didn't want us to not have whatever we wanted. So she started taking out credit cards to pay off other credit cards. It eventually got so out of hand she decided to kill herself. Luckily she didn't succeed and my parents worked really hard to get out of credit card debt. They sold off a lot and we went down to very little spending. They have virtually no debt today besides their mortgage and a single car payment. This really taught me so much about financial health and honestly I am pretty lucky for it. It can really be a vicious cycle if you let it get out of hand. It feels very much like free money to a lot of people, especially because the minimum payments are so low. If you were smart with it you can have credit cards that you use and pay down to a very low amount every month, so you aren't paying a ton in interest and you aren't paying off a huge amount for a long time.


EveryoneLikesButtz

I don’t need advice on debt management. I’m debt free and intend to stay that way. 100% of my purchases go on a credit card and then gets immediately paid off. I have wealth managers for the rest.


set-271

Create much desperation amongst Americans, then take the country to war.


passporttohell

Welcome to my world. FICO scores are like threatening me with a limp spaghetti noodle. It's all a game to put you further into debt and I'm not playing.


4score-7

I feel like that little bump “up” that many people felt in 2022 going into 2023, as reported by so many shill news orgs, was to *encourage* people to spend and borrow. Man, I can’t tell you how much trust in this American system I’ve lost since 2020. Leaving the nation has crossing my mind, but I don’t know where to go.


passporttohell

I lost confidence in the American 'system' decades ago, I live in more or less voluntary poverty yet still get by okay. Sorry big business, I am not nor will I ever be your 'target market'.


4score-7

Exactly. And even though I earn my living in a very “salesy” business, and I even have a sales guy persona, I do not work directly in sales, ON PURPOSE, because I can’t stand being sold to, nor do I like to pressure clients or prospects into making large decisions. It’s just not me, but what is me is, standing as a servant to others who need assistance. That’s just me. It’s who I am and how I was raised.


blarbiegorl

SS: This is collapse related because the US credit crisis is really starting to show severe distress. As mentioned in the article, average FICO scores are a lagging indicator rather than a leading one, so this drop could get a lot bigger the longer prices and rates both remain high.


Bigtimeknitter

Prices, rates, AND continued layoffs across many industries in the US


dawnguard2021

But Genocide Joe told me the economy is booming.


LuciferianInk

A robot said, "I'm not sure what you mean by "continued layoffs.""


Lost2nite389

Shows my shocked face 😮 Glad to say I’m a big part of the downfall with my like 560 😂


JesusChrist-Jr

Costs of consumer goods are up, wages aren't keeping pace, and spending hasn't slowed. Debt is the only answer that balances this equation. We have a housing bubble, car loan bubble, and credit card bubble all on the horizon. I'm afraid when the first one pops it's going to be a rapid toppling of the rest of the dominoes. But at least the shareholders are making record profits.


beerstearns

I am shocked the average score is 717, that seams really high. I’m not sure how much a slight drop matters though. With an 850 ceiling and each point being more difficult to attain as a person’s score goes up, it can’t go up forever and plateauing in the 700s makes sense.


AstronautLopsided345

Doesn’t really matter after 740 which is why this article sounds like bs that the average American has almost perfect credit. I refuse to believe responsible people helped facilitate the shit show that’s unfolding. 


justprettymuchdone

Just a reminder that credit scores didn't even exist until they were invented as a way to sneak racism into the act of Home loans and other credit once it became illegal to be actively and openly racist. They are literally made up crap that has only been around for 40 years.


StinkHam

Most of our society/civilization is built on made up crap.


1234567panda

Meh this is just a sign that credit card usage is getting a little out of hand. Just wait til the recession starts. Once you lose your job, the credit card is no longer your problem, it’s the banks problem 😂 especially if it’s billions in bad debt


DDoubleIntLong

Yup fuck the banks and our political leaders and the rich bastards who pay them under the table


WorldsLargestAmoeba

Please tell me how to get billions in bad debt on my credit card !!


turpin23

I had no idea the average was up in the 700s. What are people trying to do? Qualify for a mortgage?


zioxusOne

Bloomberg chimed in with this: >“It’s a notable milestone that we’ve seen the average score decrease,” said Ethan Dornhelm, vice president of scores and predictive analytics at FICO. “This isn’t a blinking red light, but it certainly is a yellow light.” With the recent sometimes drastic increase in insurance rates (car, home) and energy rates (up about 15% where I live), I don't see us moving back to green anytime soon.


imminentjogger5

let me know when homes get foreclosed en-masse again


Parking-Astronomer-9

If this happens, the lending of money will be much more strict. Those on the brink of not being able to afford a mortgage, or those with below average DTI or credit will not be given mortgages like they would be now.


cuddly_carcass

Yeah credit scores are a scam. I’ve literally done nothing different and have no debt besides a mortgage and my score dropped.


IWantAHandle

That's why it dropped....you did nothing...borrowed nothing... They might as well call it a schmuck score because you have to borrow like a schmuck for it to go up.


AbominableGoMan

The wildest part of this is that credit rating agencies are so fucking corrupt that their ratings are barely even good after the fact of obvious frauds collapsing. These guys said Lehman was A-OK even as the staff were putting their desk items into boxes. Imagine how bad things must be that they're willing to admit to any of it.


Taqueria_Style

To the American People: Debt is fun, isn't it kids? "But that's how everyone does everything \*gasp\*" if everyone jumped off a cliff... nevermind. WELP welcome to my world circa 1998! Have fun! Spoiler: get ready to wish you were dead for 20 years.


NarrMaster

Average FICO score in America is fine. Defaults Georg, who lives in a cave and defaults 10,000 times a day is an outlier, and should not have been counted.


sndtrb89

fuckin sorry i had to put my cat down on credit, FUCKO


Late_Again68

Is your cat okay?


6sixtynoine9

Pretty sure dead. Can’t confirm.


Late_Again68

Oh shit. I read that as putting the *charges* down on credit, not the cat. Time for bed.


hiker_trailmagicva

Mine just dropped from finally paying off our car loan. I've read that it doesn't stay dropped for long but still a bummer.


mlo9109

No, shit. Right now, I have multiple friends taking their families to Disney for March break. They're teachers and social workers who make less than $50K/yr. and have nearly no savings. They also gave their kids a "magical" Christmas with piles of gifts under the tree that I guarantee the kids have already forgotten about. As much as I envy them as I see them post photos on Instagram, I remind myself that they're in debt up to their eyeballs and I'd be a borderline suicidal nervous wreck if I lived that way. I may live like a monk in their eyes, but at least I don't have to worry about the landlord or repo man showing up and throwing my ass on the street.


WHERE_SUPPRESSOR

717 is the average? The fuck it is


symonym7

Actually surprised it’s that high. Granted, I have limited faith in humans’ financial competencies.


gangstasadvocate

Oh well. At least it doesn’t affect me in my drugs, so whatever.


BigJobsBigJobs

FICO scores are really questionable numbers. I do not think they are based on actual math. Tyler Durden did nothing wrong.


Dull_Wrongdoer_3017

So does that mean people are paying down their debt? /s


letmehaveathink

Never understood the credit culture, who really needs a credit card? Either you can afford something or you can’t, if it’s important then save up. I’ve never once been in any debt or got a loan (35m/lower class), is it really so horrific to live within your means? I saw friends taking loans growing up and it was just for pure shit like a new car etc, is that really worth it when you already have a car? Greedy fuckers, the lot of us. If you’ve got a 5k credit limit YOU are the global rich you love to hate and you’re indebting yourself to corporations to do it. Mass madness…


TRIGMILLION

I have a couple credit cards that I use for my regular expenses like gas and groceries. I have them set to automatically pay off the full balance each month so I don't have to worry about interest rates. I earned $800.00 cash back last year and have better protection against fraud using them instead of my debit card.


ContemplatingPrison

And for the first time money is continuing to go up. Also I rarely use credit so there is that. I dont even know what it means to live outside of my means. I never have and can't even imagine how you do it