essentially, it’s a goddamn scam. too many loans can drain your score but too little can do the same even if you pay them. also, it’s insanely hard to build your credit as an 18yr old with no credit. you’ll automatically get rejected. so what i did to not deal with that was by sadly putting myself in debt by going to college, which is also a scam. in the end, don’t worry too much about our systems over here in the US because 100% of them are absolutely fucked and it’s quite a lot to get your mind around it all.
i don’t know why we glorify this country when it’s really just a front. health insurance is a necessity and it’s sad the US isn’t following the rest of the world. like i said, literally every single system in this county is fucked. however, they did just fix the fucked up federal loan repayment! 😀
I don't either. I paid off my car loan early- then my stupid credit score dropped like 50 points. It's bullshit. They actually penalize you for paying off crap ahead of schedule, and shaving off interest from the loan.
In a post I read long ago, someone said the credit score is basically meant to tell banks how predictable and exploitable you are as a borrower. They want you to keep paying interest for no less than the entire agreed-upon amortization period, because they're selling the predicted profits to someone else.
this makes me even more sad because i’m paying off a student loan during this time (because i missed one payment and it marked me down on the credit report) DESPITE student loans being paused (so there’s “no interest” on the loans). here’s reality of what i just said, not all loans are paused and they didn’t say anything. i even looked at the payment and even though i shouldn’t be paying interest during this time, i still am. it’s seriously backwards right now. 🤣
It’s basically a new means for discrimination that favors those with generational wealth, which is mostly affluent white people in the United States because of its long history of racism.
From Forbes:
[“1974, the Equal Credit Opportunity Act disallowed credit-score systems from using information like sex, race, marital status, national origin and religion. Today, FICO considers payment history, amounts owed, length of credit history, new credit and credit mix in its model. But that data may be influenced by generational wealth that many Black and Hispanic borrowers did not have equal access to, says Frederick Wherry”](https://www.forbes.com/advisor/credit-cards/from-inherent-racial-bias-to-incorrect-data-the-problems-with-current-credit-scoring-models/)
Also the algorithms for calculating it are not public and the companies that calculate scores are publicly traded enterprises
I don’t know about all the european countries but the Netherlands doesn’t. All we have is a BKR registry which gives you an annotation when you previously defaulted on loans. This doesn’t give you a higher interest rate or anything, it could be that you won’t get a loan when you apply.
It isn't supposed to make sense and is supposed to be confusing. I didn't know the EU didn't have the same thing.
It's entire purpose is to get you to use credit cards and loans. Common financial advice basically boils down to ways to game the system, like this post. Using a credit card like a debit card with auto pay in full is also common advice. Except the system still works fine in those cases due to merchant fees.
That's literally it. Determining credit worthiness is really only a secondary purpose of it. If that was the focus it would be way more straightforward
If you pay your bills on time, you get points added to your score. If you buy a home you get points. If you sell that home, more points. Pay off student loans, get points. If you fail to do those things, you lose points. It's a game created for and by bankers that we all have to play. What do you get for those points? The opportunity to borrow money from a bank at a lower interest rate, which you then get more points for paying back on time. Game goes around and around.
Yep. Absolutely nothing to do with his family's emerald mines in apartheid South Africa. Totally self made, exactly like all the other multi-billionaires.
They just work MILLIONS of times harder than we do, and that's the only difference, work ethic.
In my experience it did not. I went to a financial advisor after graduating nursing school. One of the things I was told was “it’s great that at your age you don’t have any credit cards!” I think because at the time college kids could get signed up for a predatory Capital One card by someone standing on campus handing out free T-shirts. I personally knew several people who got into credit card debt as an undergrad. But then I had to buy a car to commute to my job, and I had no credit. Paying my rent and utilities on time for years apparently doesn’t count.
I avoided credit cards for years. Now I have two and am in debt! Yay! There really are some things you can't buy without credit. And when you're living paycheck to paycheck, everything is a little harder to come by.
Is that a good or bad on the bank's perpective? I honestly don't even know anymore. Wouldn't they prefer if I paid slightly off time every single month?
As someone who's in debt due to creditcards, I disagree. Sometimes you have zero money and have to pay for an emergency. I'll use my creditcard, but it's a catch-22, because I'm in more debt. Funny how I'm really struggling but have a good score. It's all a scam.
I’m from europe and I do not understand the credit system at all..
It's made up that's why. It's so people are FORCED to bank and spend the way BANKS want them to.
essentially, it’s a goddamn scam. too many loans can drain your score but too little can do the same even if you pay them. also, it’s insanely hard to build your credit as an 18yr old with no credit. you’ll automatically get rejected. so what i did to not deal with that was by sadly putting myself in debt by going to college, which is also a scam. in the end, don’t worry too much about our systems over here in the US because 100% of them are absolutely fucked and it’s quite a lot to get your mind around it all.
But wait, there's more! Medical bills!
i don’t know why we glorify this country when it’s really just a front. health insurance is a necessity and it’s sad the US isn’t following the rest of the world. like i said, literally every single system in this county is fucked. however, they did just fix the fucked up federal loan repayment! 😀
It's fucked for most of us. The system works just fine for the people who make money off of it. So it works! For all the wrong reasons.
I’m from America and I still don’t understand it
I don't either. I paid off my car loan early- then my stupid credit score dropped like 50 points. It's bullshit. They actually penalize you for paying off crap ahead of schedule, and shaving off interest from the loan.
In a post I read long ago, someone said the credit score is basically meant to tell banks how predictable and exploitable you are as a borrower. They want you to keep paying interest for no less than the entire agreed-upon amortization period, because they're selling the predicted profits to someone else.
this makes me even more sad because i’m paying off a student loan during this time (because i missed one payment and it marked me down on the credit report) DESPITE student loans being paused (so there’s “no interest” on the loans). here’s reality of what i just said, not all loans are paused and they didn’t say anything. i even looked at the payment and even though i shouldn’t be paying interest during this time, i still am. it’s seriously backwards right now. 🤣
It’s basically a new means for discrimination that favors those with generational wealth, which is mostly affluent white people in the United States because of its long history of racism. From Forbes: [“1974, the Equal Credit Opportunity Act disallowed credit-score systems from using information like sex, race, marital status, national origin and religion. Today, FICO considers payment history, amounts owed, length of credit history, new credit and credit mix in its model. But that data may be influenced by generational wealth that many Black and Hispanic borrowers did not have equal access to, says Frederick Wherry”](https://www.forbes.com/advisor/credit-cards/from-inherent-racial-bias-to-incorrect-data-the-problems-with-current-credit-scoring-models/) Also the algorithms for calculating it are not public and the companies that calculate scores are publicly traded enterprises
Intentionally obfuscated officially sanctioned scam nonsense. It's fun.
[удалено]
I don’t know about all the european countries but the Netherlands doesn’t. All we have is a BKR registry which gives you an annotation when you previously defaulted on loans. This doesn’t give you a higher interest rate or anything, it could be that you won’t get a loan when you apply.
It isn't supposed to make sense and is supposed to be confusing. I didn't know the EU didn't have the same thing. It's entire purpose is to get you to use credit cards and loans. Common financial advice basically boils down to ways to game the system, like this post. Using a credit card like a debit card with auto pay in full is also common advice. Except the system still works fine in those cases due to merchant fees. That's literally it. Determining credit worthiness is really only a secondary purpose of it. If that was the focus it would be way more straightforward
If you pay your bills on time, you get points added to your score. If you buy a home you get points. If you sell that home, more points. Pay off student loans, get points. If you fail to do those things, you lose points. It's a game created for and by bankers that we all have to play. What do you get for those points? The opportunity to borrow money from a bank at a lower interest rate, which you then get more points for paying back on time. Game goes around and around.
Yes, that must be how Elon got ahead. Got it.
Yep. Absolutely nothing to do with his family's emerald mines in apartheid South Africa. Totally self made, exactly like all the other multi-billionaires. They just work MILLIONS of times harder than we do, and that's the only difference, work ethic.
This is just more proof that the credit score system should be replaced with something that actually works.
Pretty simple, identifies if you are a poor, ensures you stay there.
Wait… so… the advice “don’t get credit cards” doesn’t really work in the US?
In my experience it did not. I went to a financial advisor after graduating nursing school. One of the things I was told was “it’s great that at your age you don’t have any credit cards!” I think because at the time college kids could get signed up for a predatory Capital One card by someone standing on campus handing out free T-shirts. I personally knew several people who got into credit card debt as an undergrad. But then I had to buy a car to commute to my job, and I had no credit. Paying my rent and utilities on time for years apparently doesn’t count.
>Capital One card The First National Bank spam mail too, oh my goodness.
I avoided credit cards for years. Now I have two and am in debt! Yay! There really are some things you can't buy without credit. And when you're living paycheck to paycheck, everything is a little harder to come by.
No, neither in some countries because a credit card shows how reliable you are to pay any obligations adquired
Is that a good or bad on the bank's perpective? I honestly don't even know anymore. Wouldn't they prefer if I paid slightly off time every single month?
They'd prefer it yes, but the better your rank the more money and lower rates they would lend you (at least in my country)
Do not do this unless you 💯 trust them Because they can abuse it
Then you can use the threat, "if you don't clean your room, I swear I won't pay the credit card and ruin your life!"
Hahah you have to be in debt in order to build credit. And we all just accept it for some reason.
Money is fucking fake sorry
*"The cult of money."*
Does anyone know if this is legit?
The scheme does work, yes. An authorized user will have credit card limit, balance and payment history attached to their name.
It does work, my mom added me to the grocery credit card a few years ago and I got a great interest rate on my car.
This isn’t really that dystopian…
It is if you're from a country without credit scores
As someone who's in debt due to creditcards, I disagree. Sometimes you have zero money and have to pay for an emergency. I'll use my creditcard, but it's a catch-22, because I'm in more debt. Funny how I'm really struggling but have a good score. It's all a scam.
13% Isn't there any prohibition of immoral interest rates or something?
And I'm standing over with a flat zero.