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.
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.
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.
It’s our version of China’s social credit score.
Except we don’t get the free housing and tuition, the cheap and efficient mass transit, or the retirement at age 55.
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.
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.
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.
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.
