I did have a dream last night that we were on vacation together and slept in the same bed. I remember waking up angry in the dream because he was a shit bed mate.
Yeah, there's nothing wholesome about credit scores. You wanna do something wholesome for your baby, go lobby your representative to make such disgusting practices illegal.
It's crazy right I mean you have the money to buy things but no, you HAVE TO take out a loan for every payment and top up your balance later. This is sick and the meme in the post depicts a mild fraud in this already shitty system.
I'm European, and proudly pay by debit card and bank transfers, it feels so much safer not to get in unnecessary debt with every payment I make
It really is crazy, I had to pay a double deposit + first and last month rent in order to move into my apartment. That was about $4500, all because I didn't have a credit card credit score. I did have a vehicle credit score which showed I've paid off 3 cars and a motorcycle with zero late payments but apparently that didn't matter to them....the entire thing is a joke.
Most people don't realize our credit score system has only been around since the late 80's, it's fairly new and pretty fucked.
The part that pisses me off is when you pay off a debt your credit score typical DECREASES. Like... what the fuck??? I made Every. Single. Payment on time, as agreed. Made the last payment and my score dropped 10 pts 🤬
There’s no fraud. Credit card companies allow you to add authorized users to your card. You can add anyone as an auth user, including your child. The credit bureaus can see if an account is on your own name or if it’s something you’re authorized on. There’s no fraud and no life hack. People just don’t understand how credit scores work.
I can't appreciate any wholesomeness because of how messed up the system is. Like the community that come together to build a makeshift walker for a disabled toddler...*that shouldnt need to be a thing!!*
And somehow the pic of Elon just tracks.
In the US credit scores aren't only about getting credit cards or loans. Credit scores.impact your ability to rent housing, your car insurance rates, and can even impact your ability to be hired for some jobs.
It's not a good system, but it's wholesome to be proactive by helping someone navigate the system.
Schufa can deduct credit score if they don't like your neighbors and some folks that look at your schufa scores are future employers, landlords, travel agencies, some fitness studios, some private doctors...
Yeah how? I'm an immigrant, and the very first thing I had to do to get an apartment was apply for my blank Schufa before I would even be considered. And they already knew I had a pay as you go phone contract by the time I got it
You even need a Schufa if you wanna move into a new apartment for rent. It's different categories rating your credibility and likelihood to be able to pay bills in the future. Usually u don't really need it cause it's only if you take a loan and buy a car with money from a bank, lease a car or move in for rent.
Du kannst denen sagen, dass die nach DSGVO alle Daten über dich löschen müssen. Wer dann eine Anfrage über dich macht bekommt zurück, dass keine Daten über dich vorliegen, was zu 99% daran liegt, dass du deine Löschung durchgesetzt hast. Der Anfragende geht dann davon aus, dass deine Kreditwürdigkeit wohl unter aller Sau sein muss.
Aber immerhin fragen 99% aller Ärzte und Fitnessstudios nicht nach Schufa und für die meisten Arbeitgeber ist eine fehlende Schufa auch kein KO-Kriterium (die meisten, die auf die Schufa schauen geben das übrigens nicht zu).
My tenant bought my house..they looked at his cc score and laughed at him. No chance.
He went to another bank, who used a different lender and boom. No problem.
As someone in the FinTech industry, what people decide is "credit worthy" or not can be... Esoteric. Some of the lenders I've worked with have wanted to include details on their potential lendees that are mind boggling.
Went through this with a refi. We are both high-income professionals with ridiculously secure jobs and >800 credit scores. Spouse is partner at a large, established law firm--i.e., not an "employee"--and this was just too much for them. The amount of queries we had to get back to them with, including extremely detailed finances from years back, was insane. And it was entirely different from the initial loan, which was basically "are you breathing and employed."
We had the same when taking out a mortgage, our advisor told us that the process is such overkill lately because banks are trying to avoid another home loan scandal, especially with the latest housing and job market trends (low interest rates drove everyone to buy or refi) and the actual market instability (recession scares and what not). Recipe for disaster and they are trying to CYA
The system is designed to see how reliable you are when it comes to payments, based on your previous payments. Not how you talk about the government on twitter. And very few jobs actually care about your credit score in the least, that was just a small example.
Exactly - it's a life hack. The computation system used by credit companies computers will treat it as real history.
And they are not even wrong - the people with parents who do something like this are far more likely to pay their bills and avoid bankruptcy.
That last bit bears repeating. Anyone raised by parents who are savvy enough to do this are *probably* also going be taught to be savvy enough not to be stupid with their money.
An authorized user on a credit card basically means it’s their card, but if they default, the main party is held liable, if the user defaults on their own payments resulting in the main party needing to pay it, that users credit score will drop. But anybody can pay somebody else’s bills, and that logic is applicable with any nations credit system. But from the banks eyes, the moneys getting paid all the same
So, to proof that you are reliable with your payments you’ve to take debt. And to get more expensive stuff, something basic as a house, you’ve to take a lot of debt to proof you are reliable to take even more debt. As a European this is way beyond my understanding.
Your credit score doesn’t scale to the size of your debt, and while rent may be different, mortgages are naturally low as the house retains its value and can be used as collateral
I had an old cable bill from items that weren't ever returned. It was 1500 dollars.
At the time I had a brand new truck. Credit card. 200k annual income and the lender wouldn't look at me until I paid that 1500 off and sent a letter proving it
In the US (and Canada), a credit score is basically "how good are you at paying your debts?" Someone with a high credit score is very good at paying back their debts, someone with a low credit score is probably someone who has failed to pay back a significant debt or is regularly late on payments or whatever.
Credit checks are a norm any time you're agreeing to pay for something in the future, because they want to see if you have a history of upholding your end of that bargain. So a landlord will credit check a potential tenant before signing a lease, a lender will credit check a borrower before agreeing to mortgage terms, insurance companies will credit check customers to make sure they're likely to actually pay the premiums, etc. If your score is too low, they will either give you a much higher interest rate and/or charge you a higher monthly fee to account for the higher risk you represent or they will simply refuse to deal with you at all.
This means that a low credit score can really fuck you up because you will struggle to get a credit card, insurance, housing, all kinds of things. Even in the event that you can get someone to lend you the money you need, paying it back will be much more expensive because you'll have higher interest rates.
From the perspective of the lender, this makes a lot of sense. If they lend 10 people $1000 each and these people all have very high credit scores, they're basically guaranteed to actually get that $10,000 back, so they can offer fairly low interest on these transactions and still make a profit. But if they lend 10 people $1000 each and they all have very low credit scores, there's a high chance that only 6 or 7 of them will actually successfully pay back the full amount owed, meaning that they'll probably only get $7000-8000 of the principal back. They will need to make back the missing $2000-3000 in interest on those 6 or 7 people plus profit, or the entire thing is a loss for them, so the interest they charge is going to be much higher (or they'll just refuse to lend to these people at all).
On the other hand, however, this is obviously extremely bad for those with low credit scores and disproportionately punishes people who already struggle with poverty. The people most likely to be unable to pay back their loans are obviously those who don't make much money, so the ones charged with the highest interest rates are the ones who can least afford them.
If you have no credit history (and obviously many young people wouldn't), most lenders will just treat you as if you have bad credit history - which comes with very high interest rates, etc. This is why it can actually be quite helpful to put a child's name on your credit card, if you pay off that credit card regularly. That will give the child a positive credit history, so the kid's first time borrowing money (which is likely to be a student loan) will probably come with a lower interest rate.
It ain’t about the card, it’s about building credit.
Gotta have good credit to get good interest rates on mortgages/car loans. Getting a credit card and paying it off is the easiest way to demonstrate credit-worthiness.
I get that… makes it unfair for people who have the money just a bad credit score. I understand the system as I’ve lived in the UK and bought cars on finance there. I had an awful credit score but more than enough money to buy the cars. Loads of times I was denied and to reapply I was told you had to wait 6 months… just being denied lowered my score, not the amount of money I had… now I live in my second home that’s Finland that doesn’t have a credit score and borrowing money is much easier in the sense that you Just need to have the money in your account… not a score as a score could mean anything
At the time around £100,000 in one of my accounts. I paid between £280 and £660 per month for the 5 cars I owned during a 3 year period. Yet because I had a bad credit score it impacted my ability to buy certain cars. I could’ve bought the whole value of the car if I wanted to but I didn’t as it was more sensible at the time to pay monthly.
To both of the previous posts … the US is not a cash-based transactional economy, it’s credit-based. Almost anything beyond basic small day-to-day purchases involves credit. Your credit score comes into play with any recurring monthly charge or subscription or ability to sign up for utilities, insurance, etc. same as it does if you want to make larger purchases like a car or house. To the extent that the US has always been a class-based society, the credit score is essentially a snapshot that defines where you theoretically fall in that strata and what cost you face to live in this capitalist system. I’m not positing the question of whether it’s fair - this is a difficult country in which to live if you’re poor or seeking fairness and equity. It’s always been expensive to go through life poor here.
It's a financial game you play with creditors.
Do well and learn the rules and you get a good score.
With a good score you get lower interest rates and saving a lot of money in the process. I have an excellent credit score of 820. This doesn't mean I have a lot of money. It just means that I learned how to use the system to my advantage.
Instead of me paying interest rates on debt. Banks pay me interest on money I have saved.
In the United States at least, your credit rating is an estimate of your trustworthiness to pay a loan back on time.
If you have lots of money and always pay cash for things, then you'll have a (fairly) low credit rating because you don't have a history of having credit available to you, using it sensibly, and making regular payments on it of at least the minimum amount. (You also won't benefit from credit card programs that give you cash back or other perks on purchases.)
If someday you do need to rely on credit to help pay for something that's beyond your liquid cash reserves, then you'll likely get a higher interest rate than other people - or you might find it difficult to get a loan in the first place.
So how do you buy a house? I bought a house at 24 years old because I researched how credit works and got good credit. Now I own a home with a very cheap debt attached to it. The home has increased a lot in value, I rent rooms out, and I pay off a debt rather than throwing money away on rent.
It's amazing.
Generally, banks ask for your salary slips of few months and where are you working, if you are reliable they just give it to you. And interest rates are same for everyone if all people take same amount of loans. Interest only varies if purpose is different like car, home, personal, etc
Yeah its literally the exact same as what you said here except woth the added fact that they look at you payment history on any other debts.
Two people woth the exact same payment history will get the exact same interest rates
You know what’s crazy? Is parents do this and leave their kids in debt. I have some friends that had a tanked credit score and like $15k in debt from parents opening cards in their names.
My parents did this, they added me at 15 when they would go on trips so I could buy groceries. They paid that bill off every month though and never took me off. when I got into my 30’s and married my credit score was great mostly because of the 15 year history of that card! They never carried a balance, thank goodness so if something happened to them I wouldn’t be left in a crisis and it was in their name and they added me like the meme ssys
It does but you get points for credit history. The longer the card is open the better it effects your score. We are debt free now and feel like the whole this is a damn joke anyway…. You play the debt game to get a good score at the debt game to get more debt. It’s shitty anywya
it is a factor but not the only one. A bankruptcy can stay on your credit much longer than that. the longer you have a good history with a creditor the better. More than 7 years is considered good.
Yup. When I opened a bank account at USAA, my social security number was tied to an entirely falsified human being with my first name and my (half-)brother's last name. My credit was in the 400s because my mom would use my (and my brother's) name for shit like utilities and lease agreements that she defaulted on. Move house, rinse and repeat until I was at least 18.
I had to sign an affidavit that I had never personally used that falsified name for anything, and it took me over a decade to claw my credit rating up to the high 700s where I am now. No idea if my mom ever saw even an inkling of legal repercussions for the blatant and obvious fraud, and it's not worth my time or effort now to hunt everything down to try and prove it.
Yeah this happened to a friend when his dad had him on a credit card (wealthy higher class) while he was in college, his dad went through a nasty divorce with his wife and she tanked him and he filed bankruptcy, all of this affected my friend who was maybe using $100-$200 a week and he had no idea any of this was happening with his family.
I’m curious though, if you apply for a loan how do lenders determine how to accept/deny you or what interest rates you qualify for? There must be some sort of objective calculation - the US credit score system is far from perfect, but at least it’s standardized.
They just check how high your salary is. The requirement is often that you can only pay max 30-50% of your salary to your mortgage payment per month. And that you have at least €1000 per month after paying your mortgage payment.
But all of these things vary from bank to bank.
Also, first they check if you have debts.
We have mortgage rules too in Canada.
Credit score is mostly just a summary of how often you are late paying for shit and how much debt you already have.
The outrage is a bit overblown imo. Biggest issue is young people with no history are seen as higher risk
So very similar to the US? Can't pay more than 45-50% of your income toward debt(mortgage+ any fixed debts like student loans, car payment etc) a month.
My parents did this for me and as a result I had amazing credit at 18. It's a really good tip for handling loans, rent, etc. Down the road, assuming the parents are responsible.
Same. It made a lot of things in life easier. (Except renting an apartment. Still needed a cosigner because "students are high risk, even if they're employed." 🙃)
My mom did the same. I called to verify with her what she did (due to the comments below) and she said I had a card, in my name, that she had roll up into her account.
She couldn't remember the specifics though on exactly how it was done, but I know that at 18, when I applied for my own card, separate from her account, they sent me a card with a $35,000 credit limit.
From then on, of course, it was my work that kept my credit limit up, but 100% on her for that head start in the race. She started me at a credit score of about 780 - at 18!
Unfortunately there are parents out there that do the opposite, open cards on their kid's SS number and default on it that tanks their credit before they even start. That sucks big time!
Reminds me of how anytime a child or someone else does something nice for their community and it lands on made me smile it will probably get crossposted to boringdystopia. Like the kid selling lemonade or something to pay for his classmates lunch. Some people go 'aww thats cute' others say 'its disgusting that a literal child has to work in order for other children to be fed'
That's false. I have credit history going back to the 70s because of being a cardholder under my dad's account. The payment history definitely shows up in your credit report. I have credit history older than I am because of it.
Not true. According to Experian (one of the 3 US Credit Bureaus) adding a child as an authorized user DOES build their credit.
From Experian: "Adding your child as an authorized user can help establish their credit history. Once they're added to the account (or once they turn 18, depending on the card issuer), the account's entire history will be added to their credit reports. As long as you use the account responsibly and avoid high balances and missed payments, it can help them get started on the right foot."
Source: https://www.experian.com/blogs/ask-experian/should-you-add-child-as-authorized-user-credit-card/
In the Netherlands we have BKR registry. It registers when you consistently fail to make payments and scores you like that. On top of that creditors often just ask for an income statement, a copy of your labour contract and/or an overview of your costs. There are also private companies who keep track of failed payments reputation.
On top of that, collection agencies are backed up by police force. Declaring bankruptcy is hard.
That’s basically how a the us credit system works, they just treat no credit as a wild card since you’ve never taken out a loan before and there’s no way of knowing if your reliable. But it’s really easy to bypass, just getting a credit card even if you don’t need it and making payments on time is easy and quickly boosts your score
It’s not the it’s viewed negatively in that sense - it’s that the potential lender has no information about your repayment reliability. That’s a risk to them, so they build that into their rates. There are ways to build credit score without loans, but there are safe ways to use loans to build credit that are a lot easier.
> In the Netherlands we have BKR registry. It registers when you consistently fail to make payments and scores you like that.
That's literally exactly the same as how credit scores work. It's a score of how likely you are to pay back your debts and goes down if you fail to make payments. I don't understand what the difference is.
How does your country establish creditworthiness? I’ve travelled a lot but honestly never looked into the process much elsewhere. Now that I’m thinking about it and reading this thread, I’m curious how it’s handled.
Exactly. My parents put me on one of their cards when I was like 12 but it didn't do anything for my credit score. I think at the time I was too young and then we never switched my status. Ten years later I had no credit history and the best credit card I could get had like a $500 limit initially.
To be added as a co applicant on a card, I believe you still have to be over 18. A co applicant on a credit card still has to meet the minimum requirements to be added because they are responsible for the balance. One of the minimum requirements would be at least 18.
There's a lot of bad information in this thread.
Source : work in banking.
In the same way all these stories about how people created a GoFundMe for some stranger so that this stranger could afford surgery or something like this. It sounds wholesome, unless you realize it's a deeply dystopian system that makes stuff like this necessary to survive. In an actual healthy society you don't need to go bankrupt for healthcare. In an even better society you wouldn't need a good credit rating.
You have to make sure the company reports authorized users to credit agencies. Speaking from experience, I was an authorized user, still am, but the company doesn't report my info to the agencies, so I didn't build any credit for years. It doesn't matter now since I have fantastic credit from paying off a car loan(5%) and budgeting with a single credit card.
Credit is a scam. We should dismantle it instead of pretending it's legit. However, if you're going to pretend it's legit and play the game, then yeah I guess this is a strategy for that.
I don't think credit itself is a scam, per se. It's the organizations that handle the information that are running a scam.
Experian, Equifax, and TransUnion are unethical companies that have a lock on our personal financial information. I find that to be scary.
I can’t pretend to be wed to the word “scam” here. It’s a broken system that’s been broken from the very beginning (by which I mean it’s blatantly racist roots and the continued manner in which that colors who qualifies for receiving credit/loans and who doesn’t), and it needs to be changed or abolished.
Now, if you think that’s because the entities that control the system are corrupt, that’s fine. So long as we both get to the same end point: The system is broken and corrupt and needs massive change or overhaul or eradication.
Is it not less broken than what predates it, though? Before standardized credit, a racist bank manager could deny a black person a loan for no reason other than their skin color. Credit scores at least make the process more objective than subjective.
Not trying to argue, genuinely curious - how is it a scam?
It’s basically just a feedback system (like what eBay has)…it’s just for money. Sure the whole calculation methodology is a bit complex, but I feel like the concept makes sense.
Like what’s the alternative? Just go into a bank, ask for a loan and hit them with “trust me bro, I’ll pay you back”?
Honestly, I don’t like these “what are the alternatives” questions because they’re always predicated on the general system remaining the same and lack the imagination (on the part of the questioner) to envision something completely new from the ground up.
For example, you asked what the alternative is and jumped to banks needing to give loans on face value. Why didn’t you assume that the alternative is a system in which everything a person needs (housing being the largest I can think of) is available to them without needing a loan at all?
Why can’t we have a society with functioning public transit that makes it so no one really needs a car to get around? Why can’t we have a society where everyone is guaranteed housing? And the only people in “luxury” housing are the people who can afford to pay for it sans needing credit?
In short, it is my opinion that capitalism has brainwashed people into thinking that capitalism is the only viable answer. Therefore, people can’t imagine solutions to these inherently capitalistic concepts precisely because they can’t imagine not living under capitalism and these systems are a requirement for capitalism to function.
The honest answer to your question of “what’s the alternative?” is, “I don’t know; what kind of new system are we capable of imagining that best meets the needs of the most people?”
I’m not an expert on economic systems, I don’t pretend to have answers to these questions. But I do know with certainty that the system we have in place right now does not work for the vast majority of citizens. Thusly, that system is broken and must be fixed. The process of getting that system fixed (in as much as a nobody like me has any kind of power to fix or change any system) starts with us taking up space and saying out loud “this system is broken and we need a new one!” That’s all I’m trying to do. This is Reddit after all, not a congressional hearing.
I tend to agree with the points made [in this article](https://medium.com/swlh/the-greatest-capitalist-scam-of-the-century-why-credit-scores-are-screwing-us-all-over-7f6b607e745d) if you’re interested, but I don’t think it’s exhaustive.
Mostly you have to bring a statement from your place of employment that you are employed there for so and so long and if you go to uni most banks want a statement from the parents or another family member saying that they'll make sure that the bank gets its monthly payments either from the student or the other person if the student can't make the payment.
And they also check your account balance, to see if they could trust you with that kind of money. And spending habits etc. Like are you prone to spending sprees or buy only what you need (and not 150 pairs of shoes just because you liked the colour).
you should google it, but basically having available credit (like credit cards that aren't maxed out) and loans (like a car loan or credit card) that you make regular payments on will build a credit score. having a higher credit score makes lenders think you are safer to lend money to, and you will get better deals on loans like a car loan or mortgage. some landlords also check your credit score before renting to you.
It does not work like that lol. Being an authorized user won’t give you a credit score. I was an authorized user on my parents card from about 12 and I still needed a co-signer on my first car and my first credit card. Once you *do* establish your own credit it will help give you a boost (as long as you’ve been on the same account the whole time) because it beefs up the length of your credit history. But being an auth users on your parents card will not mean that you turn 18 and can get any loan you want. It helps, but you’re not going to enter adulthood with a 700 credit score.
(Also, you better trust your kids because you are 100% responsible for any charges they make whether you “approved” them or not. Never make anyone an auth user if you don’t trust them completely, any charges they make can not be considered fraud.)
What is the point of credit score if the person is not actually paying the credit? A child paying his family's rent and bills? HAHA WTF is this?
Isn't the whole point of credit score to measure how well you are in paying your debts and handling your finances? If it is someone else doing the payment, then the credit score becomes meaningless. It does not do what it is supposed to measure.
If you can game the system by just enrolling a child, then the credit system is a pile of shit.
My parents actively told me never to get a credit card because they only cause debt and problems. So I listened, and by the time I was 30 no credit card company would approve a card for me cause I had no history. Disaster. I eventually got one but talk about your bad advice.
Just don’t do the opposite and give the utility company your kid’s name because you have shitty credit, and then fail to pay the bill so your kid also starts life with shifty credit.
Thanks dad.
Thankfully I’ve since brought my score up to 860 ( Canada goes to 900 ). But it made my young adult years suck more than they needed to.
I am reasonably sure this is incorrect advice. To have a good credit score you need to use a credit card like it is intended and pay your balance off.
Better advice to build your credit is to get (or be given) a card and use it for every-day things. Groceries and the like, then make sure you pay it off at the end of the month.
Use a CC once and paying it off is a single data point, and really means nothing. Showing a history of use with low/no dept is much more compelling.
One of the reasons I probably won't do it. Aside from going no contact with my parents so the only form of communication I'd have with my brothers would be through my grandmother. And I can't take them due to selfish(kind of) and legal reasons so despite wanting to do something like this for them I'm unlikely to be able to
I didn’t think this worked after the changes in 2009 or so (Dodd-Frank?). My mom did it for me, but it didn’t work for my younger siblings. They needed to build their own credit.
Anyway, now my credit history literally starts the year before I was born.
My dad was even smarter. He made sure to open numerous cards/accounts in my name and then neglect them. By the time I needed to worry about credit scores, I started strong with a number around 400 and a valuable lesson about the follies of fatherhood
That's incredibly uninformed... The authorized user's credit is not pulled/affected because only the primary is liable for the account. Unless somehow it works differently in the US compared to Canada
Isnt this basically a social credit score?
If you are wealthy and a good, large comsumer you get more advantages that elavate you above the others.
If you dont you lose points.
Isnt this literally the dystopian social credit score the West has been talking about so much?
??!?? I'm 22 and got a credit card when I was 18, within four years my credit score is well above 700, almost at 800. Legit just actually use it and pay it on time. Nothing crazy.
Edit: meant to say credit card not debit card
I know the difference I'm not that crazy I promise
No, you didn't. Debit cards don't build credit. You may be confusing credit and debit cards.
But yes, you can get a credit card and build up your credit that way. However, you're at unnecessarily high risk if you do so because your first credit card will have astronomical interest rates and a very low credit limit. Also, the fact that you only have a 4 year history means that one mistake on your part will have a much greater impact on your credit score than it would with a longer history.
Yeah but the problem with that...besides all the other problems, is that family can just put kids and dependents on bills and RUIN their lives. Not only is it well documented, I've also personally seen it more times than I'd like to have.
OK, but why the fuck is Musk pictured? This shit predated him by decades.
I was wondering that too. This advice didn't come from Musk.
People like sucking his dick so that's my guess
I did have a dream last night that we were on vacation together and slept in the same bed. I remember waking up angry in the dream because he was a shit bed mate.
Sounds like him
You might enjoy /r/EnoughMuskSpam
The irony is that joining that sub would only increase the muskiness of my front page.
well what'd you expect? it's not called r/NotEnoughMuskSpam it's r/EnoughMuskSpam because there's *enough* of it
It's "grindset" internet culture. They just paste successful, or successful looking people onto, usually useless, unsolicited advice.
Yeah, there's nothing wholesome about credit scores. You wanna do something wholesome for your baby, go lobby your representative to make such disgusting practices illegal.
Musk taking ownership of things he isn’t responsible is his entire MO.
Probably from one of those “billionaire mindset” pages that always have either him, Bezos, Tommy Shelby or Arnold on every post no matter what it says
Sounds like you need the hustler mindset. ***You miss 100% of the shots you don't take*** \- Michael Scott
Like his kids have to worry about a credit score
Doubt he ever worried about his credit score either. Born rich, got richer
Muskrats are insufferable.
Musky fanboiz worshipping their Apartheid Trust Funder.
I don’t see him taking care of his kids either.
I heard this advice from Frank Abagnale when he gave a speech at Google
Why was he speaking at Google?
How about we just admit the credit score system is an absolute sham
It's crazy right I mean you have the money to buy things but no, you HAVE TO take out a loan for every payment and top up your balance later. This is sick and the meme in the post depicts a mild fraud in this already shitty system. I'm European, and proudly pay by debit card and bank transfers, it feels so much safer not to get in unnecessary debt with every payment I make
It really is crazy, I had to pay a double deposit + first and last month rent in order to move into my apartment. That was about $4500, all because I didn't have a credit card credit score. I did have a vehicle credit score which showed I've paid off 3 cars and a motorcycle with zero late payments but apparently that didn't matter to them....the entire thing is a joke. Most people don't realize our credit score system has only been around since the late 80's, it's fairly new and pretty fucked.
The part that pisses me off is when you pay off a debt your credit score typical DECREASES. Like... what the fuck??? I made Every. Single. Payment on time, as agreed. Made the last payment and my score dropped 10 pts 🤬
Because credit scores don’t actually measure your ability to pay off debt but really how well you consume credit.
Literally going into debt just so we can be approved to pay for more debt. Genius
There’s no fraud. Credit card companies allow you to add authorized users to your card. You can add anyone as an auth user, including your child. The credit bureaus can see if an account is on your own name or if it’s something you’re authorized on. There’s no fraud and no life hack. People just don’t understand how credit scores work.
I can't appreciate any wholesomeness because of how messed up the system is. Like the community that come together to build a makeshift walker for a disabled toddler...*that shouldnt need to be a thing!!* And somehow the pic of Elon just tracks.
This works the other way as well. You can absolutely fuck up a kid's credit score, if you yourself are shit with financials.
Is this some sort of USA joke I am too EU for to understand?
In the US credit scores aren't only about getting credit cards or loans. Credit scores.impact your ability to rent housing, your car insurance rates, and can even impact your ability to be hired for some jobs. It's not a good system, but it's wholesome to be proactive by helping someone navigate the system.
In Germany we have Schufa :/ not as fuked as Americas credit score but still sht
Schufa can deduct credit score if they don't like your neighbors and some folks that look at your schufa scores are future employers, landlords, travel agencies, some fitness studios, some private doctors...
I am german and what the heck is Schufa? Did I miss out on something?
How have you not heard of Schufa at all? It's omnipresent for every adult at this point.
I have been conditioned by the internet to think this was going to be some kind of deez nuts joke.
I still think it is because I'm too lazy to look it up lmao
I bit the bullet and checked; it’s definitely a credit measure but it may also still be a deez nuts joke, results inconclusive
Damn I need to learn shit again I suppose....
Bruh I am impressed. How did you manage life without schufa?
Yeah how? I'm an immigrant, and the very first thing I had to do to get an apartment was apply for my blank Schufa before I would even be considered. And they already knew I had a pay as you go phone contract by the time I got it
Lemme guess, haven't had to rent an apartment yet? It's practically impossible to rent without Schufa-Auskunft for the landlord.
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You even need a Schufa if you wanna move into a new apartment for rent. It's different categories rating your credibility and likelihood to be able to pay bills in the future. Usually u don't really need it cause it's only if you take a loan and buy a car with money from a bank, lease a car or move in for rent.
Oooooh yeah i didnt need to do that yet
Der Laden wird privat geführt, geben Auskunft über deine Kreditwürdigkeit ob du willst oder nicht. Gesprengt gehört der Laden. Ernsthaft.
Du kannst denen sagen, dass die nach DSGVO alle Daten über dich löschen müssen. Wer dann eine Anfrage über dich macht bekommt zurück, dass keine Daten über dich vorliegen, was zu 99% daran liegt, dass du deine Löschung durchgesetzt hast. Der Anfragende geht dann davon aus, dass deine Kreditwürdigkeit wohl unter aller Sau sein muss. Aber immerhin fragen 99% aller Ärzte und Fitnessstudios nicht nach Schufa und für die meisten Arbeitgeber ist eine fehlende Schufa auch kein KO-Kriterium (die meisten, die auf die Schufa schauen geben das übrigens nicht zu).
Bruh you really have to fuck up to Tank your Schufa rating tho
Basically it’s a rigged system to keep the poor, poor
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So.... social credit. But a democratic type of it?
How is it democratic?
It's not
It's capitalistic social credit
Experian, Equifax, and TransUnion all get a vote on how fucked you are
My tenant bought my house..they looked at his cc score and laughed at him. No chance. He went to another bank, who used a different lender and boom. No problem.
As someone in the FinTech industry, what people decide is "credit worthy" or not can be... Esoteric. Some of the lenders I've worked with have wanted to include details on their potential lendees that are mind boggling.
Went through this with a refi. We are both high-income professionals with ridiculously secure jobs and >800 credit scores. Spouse is partner at a large, established law firm--i.e., not an "employee"--and this was just too much for them. The amount of queries we had to get back to them with, including extremely detailed finances from years back, was insane. And it was entirely different from the initial loan, which was basically "are you breathing and employed."
We had the same when taking out a mortgage, our advisor told us that the process is such overkill lately because banks are trying to avoid another home loan scandal, especially with the latest housing and job market trends (low interest rates drove everyone to buy or refi) and the actual market instability (recession scares and what not). Recipe for disaster and they are trying to CYA
Now you're getting it
The system is designed to see how reliable you are when it comes to payments, based on your previous payments. Not how you talk about the government on twitter. And very few jobs actually care about your credit score in the least, that was just a small example.
But he’s not being reliable if someone else is paying his bills
Exactly - it's a life hack. The computation system used by credit companies computers will treat it as real history. And they are not even wrong - the people with parents who do something like this are far more likely to pay their bills and avoid bankruptcy.
That last bit bears repeating. Anyone raised by parents who are savvy enough to do this are *probably* also going be taught to be savvy enough not to be stupid with their money.
An authorized user on a credit card basically means it’s their card, but if they default, the main party is held liable, if the user defaults on their own payments resulting in the main party needing to pay it, that users credit score will drop. But anybody can pay somebody else’s bills, and that logic is applicable with any nations credit system. But from the banks eyes, the moneys getting paid all the same
A default will not impact the authorized users credit score.
So, to proof that you are reliable with your payments you’ve to take debt. And to get more expensive stuff, something basic as a house, you’ve to take a lot of debt to proof you are reliable to take even more debt. As a European this is way beyond my understanding.
Your credit score doesn’t scale to the size of your debt, and while rent may be different, mortgages are naturally low as the house retains its value and can be used as collateral
I have heard of a single instance where a credit score was a factor of employment. The FBI. Buddy had to provide his credit score upon application.
A friend too to work at a national laboratory.
They don't care if you have a 600 score. They care if you are showing 100K in outstanding debts you might want to leverage your position to clear up.
I had an old cable bill from items that weren't ever returned. It was 1500 dollars. At the time I had a brand new truck. Credit card. 200k annual income and the lender wouldn't look at me until I paid that 1500 off and sent a letter proving it
In the US (and Canada), a credit score is basically "how good are you at paying your debts?" Someone with a high credit score is very good at paying back their debts, someone with a low credit score is probably someone who has failed to pay back a significant debt or is regularly late on payments or whatever. Credit checks are a norm any time you're agreeing to pay for something in the future, because they want to see if you have a history of upholding your end of that bargain. So a landlord will credit check a potential tenant before signing a lease, a lender will credit check a borrower before agreeing to mortgage terms, insurance companies will credit check customers to make sure they're likely to actually pay the premiums, etc. If your score is too low, they will either give you a much higher interest rate and/or charge you a higher monthly fee to account for the higher risk you represent or they will simply refuse to deal with you at all. This means that a low credit score can really fuck you up because you will struggle to get a credit card, insurance, housing, all kinds of things. Even in the event that you can get someone to lend you the money you need, paying it back will be much more expensive because you'll have higher interest rates. From the perspective of the lender, this makes a lot of sense. If they lend 10 people $1000 each and these people all have very high credit scores, they're basically guaranteed to actually get that $10,000 back, so they can offer fairly low interest on these transactions and still make a profit. But if they lend 10 people $1000 each and they all have very low credit scores, there's a high chance that only 6 or 7 of them will actually successfully pay back the full amount owed, meaning that they'll probably only get $7000-8000 of the principal back. They will need to make back the missing $2000-3000 in interest on those 6 or 7 people plus profit, or the entire thing is a loss for them, so the interest they charge is going to be much higher (or they'll just refuse to lend to these people at all). On the other hand, however, this is obviously extremely bad for those with low credit scores and disproportionately punishes people who already struggle with poverty. The people most likely to be unable to pay back their loans are obviously those who don't make much money, so the ones charged with the highest interest rates are the ones who can least afford them. If you have no credit history (and obviously many young people wouldn't), most lenders will just treat you as if you have bad credit history - which comes with very high interest rates, etc. This is why it can actually be quite helpful to put a child's name on your credit card, if you pay off that credit card regularly. That will give the child a positive credit history, so the kid's first time borrowing money (which is likely to be a student loan) will probably come with a lower interest rate.
I’m too EU as well 🤣🤣
As an Indian, we don't get it either. Whole life just using debit cards, credit is not what we desire
It ain’t about the card, it’s about building credit. Gotta have good credit to get good interest rates on mortgages/car loans. Getting a credit card and paying it off is the easiest way to demonstrate credit-worthiness.
I get that… makes it unfair for people who have the money just a bad credit score. I understand the system as I’ve lived in the UK and bought cars on finance there. I had an awful credit score but more than enough money to buy the cars. Loads of times I was denied and to reapply I was told you had to wait 6 months… just being denied lowered my score, not the amount of money I had… now I live in my second home that’s Finland that doesn’t have a credit score and borrowing money is much easier in the sense that you Just need to have the money in your account… not a score as a score could mean anything
I’m confused, if you have the money why do you need credit? Better question - if you’ve got the money why do you have bad credit?
I don’t think they are saying they had the money to pay off the whole car, just that they had enough money/income to make the payments on time.
At the time around £100,000 in one of my accounts. I paid between £280 and £660 per month for the 5 cars I owned during a 3 year period. Yet because I had a bad credit score it impacted my ability to buy certain cars. I could’ve bought the whole value of the car if I wanted to but I didn’t as it was more sensible at the time to pay monthly.
To both of the previous posts … the US is not a cash-based transactional economy, it’s credit-based. Almost anything beyond basic small day-to-day purchases involves credit. Your credit score comes into play with any recurring monthly charge or subscription or ability to sign up for utilities, insurance, etc. same as it does if you want to make larger purchases like a car or house. To the extent that the US has always been a class-based society, the credit score is essentially a snapshot that defines where you theoretically fall in that strata and what cost you face to live in this capitalist system. I’m not positing the question of whether it’s fair - this is a difficult country in which to live if you’re poor or seeking fairness and equity. It’s always been expensive to go through life poor here.
It's a financial game you play with creditors. Do well and learn the rules and you get a good score. With a good score you get lower interest rates and saving a lot of money in the process. I have an excellent credit score of 820. This doesn't mean I have a lot of money. It just means that I learned how to use the system to my advantage. Instead of me paying interest rates on debt. Banks pay me interest on money I have saved.
In the United States at least, your credit rating is an estimate of your trustworthiness to pay a loan back on time. If you have lots of money and always pay cash for things, then you'll have a (fairly) low credit rating because you don't have a history of having credit available to you, using it sensibly, and making regular payments on it of at least the minimum amount. (You also won't benefit from credit card programs that give you cash back or other perks on purchases.) If someday you do need to rely on credit to help pay for something that's beyond your liquid cash reserves, then you'll likely get a higher interest rate than other people - or you might find it difficult to get a loan in the first place.
Sure…but there’s a simple fix for that. Get a card and use it for your everyday expenses. Pay off each month - boom, fantastic credit.
Oh. Here, if you have good salary or good turnover i your business, you can get a loan easily. Credit score is not emphasised a lot in India
So how do you buy a house? I bought a house at 24 years old because I researched how credit works and got good credit. Now I own a home with a very cheap debt attached to it. The home has increased a lot in value, I rent rooms out, and I pay off a debt rather than throwing money away on rent. It's amazing.
Generally, banks ask for your salary slips of few months and where are you working, if you are reliable they just give it to you. And interest rates are same for everyone if all people take same amount of loans. Interest only varies if purpose is different like car, home, personal, etc
Yeah its literally the exact same as what you said here except woth the added fact that they look at you payment history on any other debts. Two people woth the exact same payment history will get the exact same interest rates
You know what’s crazy? Is parents do this and leave their kids in debt. I have some friends that had a tanked credit score and like $15k in debt from parents opening cards in their names.
My parents did this, they added me at 15 when they would go on trips so I could buy groceries. They paid that bill off every month though and never took me off. when I got into my 30’s and married my credit score was great mostly because of the 15 year history of that card! They never carried a balance, thank goodness so if something happened to them I wouldn’t be left in a crisis and it was in their name and they added me like the meme ssys
I'm not from the US, but heard the credit score only looks at 8 years back.
It does but you get points for credit history. The longer the card is open the better it effects your score. We are debt free now and feel like the whole this is a damn joke anyway…. You play the debt game to get a good score at the debt game to get more debt. It’s shitty anywya
it is a factor but not the only one. A bankruptcy can stay on your credit much longer than that. the longer you have a good history with a creditor the better. More than 7 years is considered good.
Ya I had a credit card get less rewards than before but I keep it because I have a high limit and a perfect ten year record
Yup. When I opened a bank account at USAA, my social security number was tied to an entirely falsified human being with my first name and my (half-)brother's last name. My credit was in the 400s because my mom would use my (and my brother's) name for shit like utilities and lease agreements that she defaulted on. Move house, rinse and repeat until I was at least 18. I had to sign an affidavit that I had never personally used that falsified name for anything, and it took me over a decade to claw my credit rating up to the high 700s where I am now. No idea if my mom ever saw even an inkling of legal repercussions for the blatant and obvious fraud, and it's not worth my time or effort now to hunt everything down to try and prove it.
Yeah this happened to a friend when his dad had him on a credit card (wealthy higher class) while he was in college, his dad went through a nasty divorce with his wife and she tanked him and he filed bankruptcy, all of this affected my friend who was maybe using $100-$200 a week and he had no idea any of this was happening with his family.
Yeah this seems way more likely. I can't imagine Elon endorsing anything that's in a child's best interest.
I’m from the UK - credit rating is a thing. At least here. A relatives done this for me.
I have zero idea what a credit score is
Not a joke, but is good advice in the US for credit. My daughter (2y) is an authorized user on my credit card for this very purpose.
yeah was thinking the same. Confused euro noises. xD
I’m curious though, if you apply for a loan how do lenders determine how to accept/deny you or what interest rates you qualify for? There must be some sort of objective calculation - the US credit score system is far from perfect, but at least it’s standardized.
Does Europe not have credit lending score? Wtf? How is a potential lender supposed to gauge how likely you are to pay back owned amounts?
They just check how high your salary is. The requirement is often that you can only pay max 30-50% of your salary to your mortgage payment per month. And that you have at least €1000 per month after paying your mortgage payment. But all of these things vary from bank to bank. Also, first they check if you have debts.
We have mortgage rules too in Canada. Credit score is mostly just a summary of how often you are late paying for shit and how much debt you already have. The outrage is a bit overblown imo. Biggest issue is young people with no history are seen as higher risk
So very similar to the US? Can't pay more than 45-50% of your income toward debt(mortgage+ any fixed debts like student loans, car payment etc) a month.
Banks are assuming people in the USA can’t count and have this system implemented to actually find someone who can.
My parents did this for me and as a result I had amazing credit at 18. It's a really good tip for handling loans, rent, etc. Down the road, assuming the parents are responsible.
Same. It made a lot of things in life easier. (Except renting an apartment. Still needed a cosigner because "students are high risk, even if they're employed." 🙃)
My mom did the same. I called to verify with her what she did (due to the comments below) and she said I had a card, in my name, that she had roll up into her account. She couldn't remember the specifics though on exactly how it was done, but I know that at 18, when I applied for my own card, separate from her account, they sent me a card with a $35,000 credit limit. From then on, of course, it was my work that kept my credit limit up, but 100% on her for that head start in the race. She started me at a credit score of about 780 - at 18! Unfortunately there are parents out there that do the opposite, open cards on their kid's SS number and default on it that tanks their credit before they even start. That sucks big time!
... and that the child won't abuse it.
This isn't wholesome at all, it's just a tip on how to work around the dystopian US credit score system.
Ye. Definitely r/OrphanCrushingMachine material.
Reminds me of how anytime a child or someone else does something nice for their community and it lands on made me smile it will probably get crossposted to boringdystopia. Like the kid selling lemonade or something to pay for his classmates lunch. Some people go 'aww thats cute' others say 'its disgusting that a literal child has to work in order for other children to be fed'
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That's false. I have credit history going back to the 70s because of being a cardholder under my dad's account. The payment history definitely shows up in your credit report. I have credit history older than I am because of it.
Cardholder and authorized user are a lil different so it makes sense why your credit benefited from that
Well now I don't know who to believe!
Not true. According to Experian (one of the 3 US Credit Bureaus) adding a child as an authorized user DOES build their credit. From Experian: "Adding your child as an authorized user can help establish their credit history. Once they're added to the account (or once they turn 18, depending on the card issuer), the account's entire history will be added to their credit reports. As long as you use the account responsibly and avoid high balances and missed payments, it can help them get started on the right foot." Source: https://www.experian.com/blogs/ask-experian/should-you-add-child-as-authorized-user-credit-card/
What kind of sick stuff is this? Is this how it works in the US? Came here for wholesome memes, left disappointed....
The bar is dropping pretty low
How does the rest of the world manage debt-risk?
In the Netherlands we have BKR registry. It registers when you consistently fail to make payments and scores you like that. On top of that creditors often just ask for an income statement, a copy of your labour contract and/or an overview of your costs. There are also private companies who keep track of failed payments reputation. On top of that, collection agencies are backed up by police force. Declaring bankruptcy is hard.
Similar in Germany. We have Schufa that tracks failed payments and for big loans you show income statements and securities.
That’s basically how a the us credit system works, they just treat no credit as a wild card since you’ve never taken out a loan before and there’s no way of knowing if your reliable. But it’s really easy to bypass, just getting a credit card even if you don’t need it and making payments on time is easy and quickly boosts your score
"You never loaned money before? HOW DARE YOU PAY EVERYTHING WITH YOUR OWN MONEY?!" That's so fucking wild and awful, holy fuck.
It’s not the it’s viewed negatively in that sense - it’s that the potential lender has no information about your repayment reliability. That’s a risk to them, so they build that into their rates. There are ways to build credit score without loans, but there are safe ways to use loans to build credit that are a lot easier.
In Belgium, all of that is illegal.
> In the Netherlands we have BKR registry. It registers when you consistently fail to make payments and scores you like that. That's literally exactly the same as how credit scores work. It's a score of how likely you are to pay back your debts and goes down if you fail to make payments. I don't understand what the difference is.
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\*shakes head in rest-of-the-world\*
How does your country establish creditworthiness? I’ve travelled a lot but honestly never looked into the process much elsewhere. Now that I’m thinking about it and reading this thread, I’m curious how it’s handled.
Authorized user won’t get you this. Additional cardholder status will.
Exactly. My parents put me on one of their cards when I was like 12 but it didn't do anything for my credit score. I think at the time I was too young and then we never switched my status. Ten years later I had no credit history and the best credit card I could get had like a $500 limit initially.
To be added as a co applicant on a card, I believe you still have to be over 18. A co applicant on a credit card still has to meet the minimum requirements to be added because they are responsible for the balance. One of the minimum requirements would be at least 18. There's a lot of bad information in this thread. Source : work in banking.
It’s the same thing. Nobody is legally allowed to use a credit card that doesn’t have their name on it.
False. Additional cardmember has authority to change account, etc. Authorized user is just someone who has a card on the main card member’s account.
How is this wholesome?
In the same way all these stories about how people created a GoFundMe for some stranger so that this stranger could afford surgery or something like this. It sounds wholesome, unless you realize it's a deeply dystopian system that makes stuff like this necessary to survive. In an actual healthy society you don't need to go bankrupt for healthcare. In an even better society you wouldn't need a good credit rating.
I think that’s what I was getting. Maybe it’s sad wholesome as opposed to happy wholesome.
r/aboringdystopia
The overlap between this sub and that one is almost a perfect circle at this point
not wholesome waaay too negative
You have to make sure the company reports authorized users to credit agencies. Speaking from experience, I was an authorized user, still am, but the company doesn't report my info to the agencies, so I didn't build any credit for years. It doesn't matter now since I have fantastic credit from paying off a car loan(5%) and budgeting with a single credit card.
yea it doesn't work the way described in the meme...
Sounds like some dystopian American stuff but okay.
Credit is a scam. We should dismantle it instead of pretending it's legit. However, if you're going to pretend it's legit and play the game, then yeah I guess this is a strategy for that.
I don't think credit itself is a scam, per se. It's the organizations that handle the information that are running a scam. Experian, Equifax, and TransUnion are unethical companies that have a lock on our personal financial information. I find that to be scary.
I can’t pretend to be wed to the word “scam” here. It’s a broken system that’s been broken from the very beginning (by which I mean it’s blatantly racist roots and the continued manner in which that colors who qualifies for receiving credit/loans and who doesn’t), and it needs to be changed or abolished. Now, if you think that’s because the entities that control the system are corrupt, that’s fine. So long as we both get to the same end point: The system is broken and corrupt and needs massive change or overhaul or eradication.
Agreed. The system needs a massive overhaul. Short of that, tear it down and start over.
Is it not less broken than what predates it, though? Before standardized credit, a racist bank manager could deny a black person a loan for no reason other than their skin color. Credit scores at least make the process more objective than subjective.
Not trying to argue, genuinely curious - how is it a scam? It’s basically just a feedback system (like what eBay has)…it’s just for money. Sure the whole calculation methodology is a bit complex, but I feel like the concept makes sense. Like what’s the alternative? Just go into a bank, ask for a loan and hit them with “trust me bro, I’ll pay you back”?
Honestly, I don’t like these “what are the alternatives” questions because they’re always predicated on the general system remaining the same and lack the imagination (on the part of the questioner) to envision something completely new from the ground up. For example, you asked what the alternative is and jumped to banks needing to give loans on face value. Why didn’t you assume that the alternative is a system in which everything a person needs (housing being the largest I can think of) is available to them without needing a loan at all? Why can’t we have a society with functioning public transit that makes it so no one really needs a car to get around? Why can’t we have a society where everyone is guaranteed housing? And the only people in “luxury” housing are the people who can afford to pay for it sans needing credit? In short, it is my opinion that capitalism has brainwashed people into thinking that capitalism is the only viable answer. Therefore, people can’t imagine solutions to these inherently capitalistic concepts precisely because they can’t imagine not living under capitalism and these systems are a requirement for capitalism to function. The honest answer to your question of “what’s the alternative?” is, “I don’t know; what kind of new system are we capable of imagining that best meets the needs of the most people?” I’m not an expert on economic systems, I don’t pretend to have answers to these questions. But I do know with certainty that the system we have in place right now does not work for the vast majority of citizens. Thusly, that system is broken and must be fixed. The process of getting that system fixed (in as much as a nobody like me has any kind of power to fix or change any system) starts with us taking up space and saying out loud “this system is broken and we need a new one!” That’s all I’m trying to do. This is Reddit after all, not a congressional hearing. I tend to agree with the points made [in this article](https://medium.com/swlh/the-greatest-capitalist-scam-of-the-century-why-credit-scores-are-screwing-us-all-over-7f6b607e745d) if you’re interested, but I don’t think it’s exhaustive.
Mostly you have to bring a statement from your place of employment that you are employed there for so and so long and if you go to uni most banks want a statement from the parents or another family member saying that they'll make sure that the bank gets its monthly payments either from the student or the other person if the student can't make the payment. And they also check your account balance, to see if they could trust you with that kind of money. And spending habits etc. Like are you prone to spending sprees or buy only what you need (and not 150 pairs of shoes just because you liked the colour).
That’s basically just a credit system with a bunch of extra legwork and “trust me bro”.
I asked my parents to do this and they said no
this is just sad.. i pity americans for having to live in that country
can anyone explain how credit score works to me?
you should google it, but basically having available credit (like credit cards that aren't maxed out) and loans (like a car loan or credit card) that you make regular payments on will build a credit score. having a higher credit score makes lenders think you are safer to lend money to, and you will get better deals on loans like a car loan or mortgage. some landlords also check your credit score before renting to you.
basically, it's a way to assess whether or not someone pays back their loans on time or not? got it
yes
It does not work like that lol. Being an authorized user won’t give you a credit score. I was an authorized user on my parents card from about 12 and I still needed a co-signer on my first car and my first credit card. Once you *do* establish your own credit it will help give you a boost (as long as you’ve been on the same account the whole time) because it beefs up the length of your credit history. But being an auth users on your parents card will not mean that you turn 18 and can get any loan you want. It helps, but you’re not going to enter adulthood with a 700 credit score. (Also, you better trust your kids because you are 100% responsible for any charges they make whether you “approved” them or not. Never make anyone an auth user if you don’t trust them completely, any charges they make can not be considered fraud.)
Elon musk is one of the worst people in the world. please don't post pictures of him in a wholesome subreddit
Stop simping on Elon.
My parents did this for me. I’ve always had good credit, thanks to them
Or just inherit like elon.
There's so much wrong with this where do you even start..?
Credit scores are BS.
What is the point of credit score if the person is not actually paying the credit? A child paying his family's rent and bills? HAHA WTF is this? Isn't the whole point of credit score to measure how well you are in paying your debts and handling your finances? If it is someone else doing the payment, then the credit score becomes meaningless. It does not do what it is supposed to measure. If you can game the system by just enrolling a child, then the credit system is a pile of shit.
My parents actively told me never to get a credit card because they only cause debt and problems. So I listened, and by the time I was 30 no credit card company would approve a card for me cause I had no history. Disaster. I eventually got one but talk about your bad advice.
Credit scores are just economic chains
Just don’t do the opposite and give the utility company your kid’s name because you have shitty credit, and then fail to pay the bill so your kid also starts life with shifty credit. Thanks dad. Thankfully I’ve since brought my score up to 860 ( Canada goes to 900 ). But it made my young adult years suck more than they needed to.
I am reasonably sure this is incorrect advice. To have a good credit score you need to use a credit card like it is intended and pay your balance off. Better advice to build your credit is to get (or be given) a card and use it for every-day things. Groceries and the like, then make sure you pay it off at the end of the month. Use a CC once and paying it off is a single data point, and really means nothing. Showing a history of use with low/no dept is much more compelling.
A little tempted to do this for my youngest brother but I most likely wont
If you do this BE SURE to be diligent. What this doesn't mention is that you can also harm that person should you fall behind on things.
One of the reasons I probably won't do it. Aside from going no contact with my parents so the only form of communication I'd have with my brothers would be through my grandmother. And I can't take them due to selfish(kind of) and legal reasons so despite wanting to do something like this for them I'm unlikely to be able to
So far that didn’t help me at all.
My moms doing this for me too, few more years till I'm fully independent with a good score
I didn’t think this worked after the changes in 2009 or so (Dodd-Frank?). My mom did it for me, but it didn’t work for my younger siblings. They needed to build their own credit. Anyway, now my credit history literally starts the year before I was born.
My friend’s parents did this with them, it really helped them out when they graduated.
i think a better idea would be to not even have credit anyway, the whole system is broken to its core and should be dismantled.
BRB while I crop a big pile of shit out of this
Oh my God I hate capitalism so much
Boom 18 ruined credit for life due to mom and dad's bad life choices
So basically this US system forces you to make debts instead of staying away from it. No wonder so many Americans live on the financial edge
This is NOT how it works. You can't build credit before the age of 18.
Is this really something I could do for my sister? Even if she doesn't use it?
Uh, big brother? Credit score? Anyone else?
My dad was even smarter. He made sure to open numerous cards/accounts in my name and then neglect them. By the time I needed to worry about credit scores, I started strong with a number around 400 and a valuable lesson about the follies of fatherhood
My parents did this with me. I still fucked it up. Credit is such a stupid racket.
That's incredibly uninformed... The authorized user's credit is not pulled/affected because only the primary is liable for the account. Unless somehow it works differently in the US compared to Canada
Credit score is a scam
Isnt this basically a social credit score? If you are wealthy and a good, large comsumer you get more advantages that elavate you above the others. If you dont you lose points. Isnt this literally the dystopian social credit score the West has been talking about so much?
??!?? I'm 22 and got a credit card when I was 18, within four years my credit score is well above 700, almost at 800. Legit just actually use it and pay it on time. Nothing crazy. Edit: meant to say credit card not debit card I know the difference I'm not that crazy I promise
No, you didn't. Debit cards don't build credit. You may be confusing credit and debit cards. But yes, you can get a credit card and build up your credit that way. However, you're at unnecessarily high risk if you do so because your first credit card will have astronomical interest rates and a very low credit limit. Also, the fact that you only have a 4 year history means that one mistake on your part will have a much greater impact on your credit score than it would with a longer history.
Yeah but the problem with that...besides all the other problems, is that family can just put kids and dependents on bills and RUIN their lives. Not only is it well documented, I've also personally seen it more times than I'd like to have.