I always assumed credit scores were an integral and historic part of the American financial system.
They were not, they are very recent，most of your parents didn’t have credit scores growing up, and as you can probably tell or at least intuit, it’s mostly just a b******* scheme for those with capital to accrue more capital by invading your privacy.
It sucks but things were worse before, especially if you were black.
Came here to say this. Credit scores are meant to remove some of the racial and social bias from the decision making. That was the idea anyway.
Doesn’t mean this is how it has to be. It can be improved further.
While true, don’t let perfect be the enemy of the good.
Yes, and I’m only making the opposite counter-point: Don’t stop doing a good thing, like fixing broken systems.
I love it how everyone enjoys pointing out the negative interpretation when it’s in response to something that makes it utterly clear I mean the positive interpretation.
You may as well be saying, “if it ain’t broke, don’t fix it”, which I’m sure is not what you mean, but that’s exactly what responding with a counter-view implies at this point.
How can it be improved further. If you’re going to say stuff, give us a “such as,” otherwise it comes off as a negative, it’s not good enough. Gotta be constructive with the criticism. I’m reading a lot of negative reactions and I want some actual rationale for it, because I guess I’m uneducated on the topic and I fail to see what the issue is. Credit is people giving you money. There’s a system that keeps track of your credit history. Don’t want it? Don’t get credit, that’s it. Have 0 credit and then reap the rewards of that if you want.
Such as if you’ve been paying rent for years you should be allowed to pay an equal amount for a home you may actually own one day. That’s my main one.
I don’t understand what you mean or how that relates at all. And I’m not trying to be obtuse, I just don’t see a rational nexus between what you’re paying in rent now versus what you may pay as a mortgage on some completely different piece of property. Owning a piece of property and renting one are two different things.
Now, should paying rent be reflected on your credit score? I believe so, for better and for worse. If you are a good tenant, always pay rent on time, to me that reflects well on your fiscal health. I think the only reason it’s not is because who is there to report it? Only way it would be is if you could put it on your credit card, and I’m not sure any landlords take credit cards.
Or an immigrant. Or a woman (especially if you’re pregnant). Or if you lived near black people or immigrants. Or if you had long hair. Or maybe the local bank manager just didn’t like you. These were all acceptable reasons to deny your loan application prior to credit scores.
They literally made decisions based on things you can’t control. Banks are now legally prohibited from even asking these things. If you notice, people working at a bank will never ask “where are you from?”
Fuck I sound like a bootlicker but the net result was that it took away some control of the rich to influence social mobility.
But rich people are living organisms and their think tanks are the smartest. They’ve already found ways around it.
As time moves on, a lot of things containing racial bias have gotten more abstract. For example, we don’t segregate schools by law anymore, but African-Americans do tend to live in neighborhoods together, those neighborhoods tend to have lower property values, and schools are funded by the taxes on property values. Segregation is still there, but you have to go a few layers deep to find it.
However, as its been forced to get more abstract, it’s also become less effective. Without absolute prohibitions against African-Americans attending the same schools as white people, there has been more upwards mobility of African-Americans to live in better neighborhoods with better schools and end cycles of poverty. Still, it would be better if we got rid of this dumb property tax system for schools altogether.
Credit scores are the same. It abstracted away the racism. It’s still there, causing unnecessary hardship, but not to the degree previous systems did. There is more room for upwards mobility, but that doesn’t mean we should leave it as it is.
I tried to open a bank account at a credit union while homeless. Had $42k on my direct express card, finally on SSI, lump sum was for the previous year while unable to work.
No debts, never used a credit card. Couldn’t open a bank account. Had to go thru a program that assigned me a fake credit card debt that I had to pay off for 6 months to get my credit score high enough.
Credit scores are a scam.
To be fair I wouldn’t loan money to a homeless person either.
What they’re describing is a pretty common financial product. They process a small unsecured loan which is placed straight into a escrow account with autopay so as far as the credit calculation goes they have a loan for which they are making consistent payments on until it’s paid off. It’s basically a hack to get some positive line items on the credit report to to try drag the score up a little
Back in the seventies/early eighties, I remember my grandmother getting financial privilege by showing the check numbers in her checkbook, which were in the high thousands.
If you ran around bouncing checks, you would get cut off long before that and have to start over at the dreaded check number 101.
Such simpler times.
ahhhh so thats why in the late 80s you could start your checks at 1000+
Imagine someone handed you check #001 for $1000…would you really trust it?
Knowing that you can order checks with any number you want printed in them. I would trust it as much as i would trust a check with any other number. Maybe actually a little more than check #69420 or #58008.
Credit scores didn’t exist but credit bureaus date back to the mid 1800s in the USA. Also, as others have mentioned creditors would do their due diligence and try to assert that you would be able to pay back your loans by doing many of the same things they do now.
This really isn’t some new, crazy concept like you’re making it out to be. The score has only simplified the process.
I am not on our mortgage on the house that I own with my husband. I am employed, full time. At the time I had no debt, and the car loan was in my husband’s name.
They told me I couldn’t be on the mortgage because I had no credit score.
that’s how it works. you have no credit history you can’t be trusted wiht a major loan like a mortgage.
you need credit history.
My response was to someone who claimed that the system has not fundamentally changed due to credit scores being introduced.
Yes, it is true this is how it works now, it is not how it used to work.
The score simplified the process for creditors of pre-assessing your risk as a debtor so that they don’t have to put in the work to actually assess your rush a debtor, leading to an irresponsible and imbalanced credit system that you can’t benefit from unless you are born on the right side of the tracks.
I didn’t say the concept was new or crazy.
This is a way for operators of capital to accrue more capital and more easily distance themselves from everybody else, whose information they profit from, rather than creating opportunities.
Tbf personal credit cards have only been around since a couple decades before that.
But they primarily use credit scores to deny mortgages to people. Getting a CC with a bad credit score is very easy. The rates will just suck. And we’ve had mortgages, car loans and business loans a lot longer.
Just wait till you learn what they used to deny people mortgages before the invention of credit scores.
It was their eyeballs and racism!
Can you expand on the eyeballs part? I swear I remember something about that which I can’t remember and I’m getting nothing of use on Google
You used to go to the bank and they could see the color of your skin with their eyeballs.
Hmm I feel like I remember something about eye shape that was used for discrimination, probably related to frenology
So we invented social score just before the 90s, and everyone just shrugged and said okay. I guess that’s cool. But we freaked out when china did the same thing a decade or two later, not realizing we’ve had it the whole time.
This is a good point, although you can still legally buy plane tickets and attend public events or go to school regardless of your or your family’s credit score in the states, which is not possible in China
Yeah, theirs is more intense, I agree. But we definitely have one. It’s your good little capitalist score, and if you don’t have a good score you can end up homeless bcz nobody will rent to you or sell you a house.
Chinese social credit can be deducted for associating with people who shares opinions the state disapproves of. Thereby weaponizing social ostricism for control.
So can credit, and especially the lesser talked about insurance scores.
Or your medical score. That one’s a real hidden bitch
Gonna need a source for that one. I’ve said some pretty awful things about the government but my credit score is all me.
I didn’t say anything about the government, credit scores are private. It’s irrelevant though who the boot belongs to.
It’s difficult to know just how much data is aggregated through these as they are completely private and only traded via data brokers.
I think it’s naive at best, willfully ignorant at worst, to deny that these scoring systems are in place and use a vast array of data including very detailed spending habits.
You’re telling me your insurance score will go down if you like a post on Facebook that is critical if the US government?
sure. it likely puts that person in a riskier category than someone unwilling to protest in any form.
I will just leave this here. Your employers can snitch on you as well and just give all of your paystubs to…Equifax. It was shocking to see which ones did and which ones did not.
So we have this massive quasi-public organization that gathers tons of personal data and then protects it with lousy security. Great.
The first time I saw this I was shocked. Every single paycheck of mine is there and there’s basically nothing you can do about it without having negative credit impacts for having manually disabled it. Why on earth is this opt-out rather than opt-in? Then it wouldn’t look like you’re trying to hide something if you value your privacy at all.
It’s crazy this is legal. So dystopian.
I disabled that shit the moment I found out a few years ago. As far as I know it is only potentially an issue if a landlord or something wants to see it and isn’t tied to your credit score. I don’t give a shit right now anyways as my credit is good enough. If I need to give someone access to it, and it makes sense, sure, but I would rather hand over a copy of my W2 or paystubs personally.
It is entirely messed up that it exists and most people don’t even know about it. Dystopian nightmare indeed.
deleted by creator
When you opt-out with Experian, your information is not deleted from the Experian marketing database. Experian will mark your record as “Do Not Online Target” for a period of five years. You can renew your opt-out request after this five-year period. If Experian removed your information completely, we would have no way to know your preference.
What the fuck kind of bullshit is that? No way to know my preference? How about never! Thank you for letting me know that I have to write another email today and try not to lose my shit. Maybe I will setup an automated message to go out every year or something to “remind” them.
They should write it as “you must allow targeted advertising at least once every 5 years before submitting a new opt-out request for the next 5 year period”.
So dumb this is legal, I just sent my email.
It’s a silly system but really not that hard to do well. Put everything on credit card and set everything to auto pay the statement. That alone will give you good enough credit with little effort.
You forgot the most important part: never have an unexpected expense, like going to a hospital or your car breaking down.
We got a new card, no interest for a year. Put our entire kitchen reno on it. Credit score went down 47 points altogether. Paid it all off, credit score went up 17 points. All of this inside 6 months. It doesn’t make sense lol.
Everyone has some great points about credit cards in here. Just like to point out that despite how good they are most of you missed the point completely.
If my credit score goes down 50 points for a reported balance, once that balance is paid off, not returning to the original score is simply absurd. It’s a penalty just for existing in the system.
High utilization affects your score. For example, if you have a credit limit of $1,000 and have a balance of $900 when reported to credit agency, your utilization will be 90%. This will negatively impacts your score even if you pay it off on time. It is possible to avoid this by paying off purchases immediately, since your balance is only sent to the credit agencies once per month. Also if your limit was $10,000 the same balance would only be 9% utilization which is a lot better.
Oh interesting. A friend is a financial advisor and had told me that he often just pays his card immediately after making a purchase. That must be why.
I pay mine every Thursday so it clears Friday and I’m ready for the weekend.
or it’s just because he doesn’t want to pay interest payments.
Interest or not, you should never carry a balance on a credit card. You should also never have more than 10% utilization.
Looks like you probably did three things which hurt your score… having a new account, carrying a balance, and possibly having more than 10% utilization.
I know the whole credit score thing seems stupid, but if you know how their calculations work you can get a high score in just a few years of doing everything correctly.
right, the thing that idiots do is load up their card once they get one and then make minimum payments… tanking their credit. and instead of paying it down… they open up a new one.
The hard part for me is maintaining income.
Managing money is dead easy. Acquiring money is the problem.
“High functioning” autism. Kinda like a high functioning tricycle on the freeway.
There’s plenty of people not even on the spectrum unable to acquire enough money to get by, too.
Remember you class solidarity: we’re all fucked together!
Just talking about myself here. The individualist lens, as it were. I worry about collectivist thinking because I don’t like the idea of outliers being trimmed out of the plans. Largely because I’m an outlier.
I’ve read history of what happens when class consciousness is the primary method of thinking. I don’t think I would have done well in the Soviet Union, because I have a powerful compulsion to tell the truth, and people who told the truth there got disappeared.
I had an Uber passenger yesterday who got fucked out of her organization because she told the truth, and the story sounded like something straight out of We The Living.
Consider this: collectivism views the primary moral unit as the class. The class is the body. The class has consciousness.
Well, if you see things that way, then removing a person whose presence doesn’t enhance the class success is no worse than trimming off a fingernail or removing a tumor.
I’m an individualist because I fundamentally believe people are not replaceable, not fungible, and that they should merge their consciousness with others only with the understanding that this erases their individual consciousness.
Sorry to rant. I appreciate the support, but it kinda comes across as recruitment. People find meaning in the military, which is the epitome of collectivist effort. A centrally-controlled structure where nobody owns anything, people go through intense brainwashing to remove their sense of individuality, and typical operations involve determining a person’s capacity to extract as much as possible, and then providing that person according to their need.
And what is the product of this way of organizing humans? Why it’s death, destruction, and generational trauma of course. What else could it be?
Really appreciate it, brother. I know people struggle, for all sorts of reasons. Just please don’t use the word class to entice me. I’m an individual, not an instantiation.
It’s not like they didn’t look through your financial history before then - they just didn’t have to show their working publicly, which meant you could ne discriminated against for any number of things
So the same now, except now all personal data is located in one place according to the rules they set, from which they can sell your data and preemptively block you or refuse to meet you to discuss your practical repayment capability.
All of those could be and were done before, only it wasn’t public so you had no way to also know your score.
Your hypothesis is that before computers and data centers were used in business to cross-reference, centralize, analyze and store private and public data, and before a personal credit rating system was implemented, businesses were using cross referenced, centralized, analyzed mountains of paper files on all potential consumers nationwide, directly related to their business or not, to calculate 300+ million personal credit scores that didn’t exist yet?
You’re taking more than a leap, you’re jumping right off the cliff.
uh… that’s exactly how it worked. The Wikipedia page you linked mentions credit bureaus. If you go to that page you can see they were established in the USA by the mid 1800s. Yes, it was all done on paper. That’s how the world used to work.
No, that is not how it was done. Before, The time was put in to assess the relevant data your creditworthiness.
Today if you break a leg and have a hospital bill, your chances of receiving credit are automatically lowered.
There’s a huge difference between being investigated for credit worthiness and automatically being assigned a score filled with arbitrary private data irrelevant to debt or credit.
Are you a racial minority? Your credit score probably isn’t as good as a white guy’s credit score.
https://www.federalreserve.gov/econres/feds/files/2022067pap.pdf
Assessing relevant data on an individual’s debt risk makes sense.
Collecting everybody’s private information so that three companies can determine, without ever meeting you or knowing anything about you, teally, the amount you are allowed to succeed or take advantage opportunities is b*******.
The 19th century credit bureaus and today’s credit ratings are completely different.
Credit scores have existed for decades, as the article states. It’s specifically the FICO system that was started in 1989.
Yes, credit scores have existed for 150 years.
But the system of predetermining how deserving you are based on your race or other circumstances beyond your control centralized within a few firms making money off of that data? That’s new and that’s b*******.
Did you mean bullshit? Are you 5?
Shut up mom i HATE you
bAnANas
It’s our version of China’s social credit score.
There’s no such thing as “China’s social credit score”. All of thar came from small local projects and miss translating articles.
Edit: https://youtu.be/Kqov6F00KMc for the 10000 people whose just today are learning about it.
Are you sure it’s 10,000? That sounds like a lot.
The 10,000 part is a reference to this XKCD comic
Not even close 🤣 what an absurd thing to say. You really think following social rules is the same thing as participating and having a financial history of posting back lent money is the same thing?
Edit you know what, never mind I see you all trying to compare imaginary insurance Facebook scenarios and pretending like that’s how a FICO works. 👌👍.
When I was younger, I was denied housing because I had no credit rating. Not a bad rating mind you, but no rating at all, because I did not use credit cards or anything else that would get me in Experian’s system. I was penalized for never accruing debt. The system is absurd.
If you ask someone to loan you some money (a line of credit), they might reply:
“Hmm, has anyone else loaned you money before, and you paid it back, showing you can be responsible with a loan?”
Even if it’s just a friend asking for you to spot them $50, you might ask a mutual friend if that person actually pays them back.
It makes sense that not having a credit history is negative for them.
In Europe this still doesn’t even really exists. You just bring your proof of capital/value/timely payment stubs to the bank.
Oh, in America you still have to provide those things too, AND have a decent credit score.
The last few times I’ve applied for credit I’ve only had to self-report my income and not dig out paystubs. I’m honestly not sure if I should be worried or happy
Omg…
Yes it’s really the same thing. A basic number to reflect how good of a citizen you are. The metrics used are irrelevant
Except we don’t get the free housing and tuition, the cheap and efficient mass transit, or the retirement at age 55.
They are new in the rest of the world. But we don’t Need them. Thanks please.
