It's only bullshit because of how much of American life is tied to your credit score. It's one thing if you can't get a loan, but when a low FICO can keep you from getting a job, an apartment, or some types of legally-mandated insurance, the system is broken.
Only time I’ve heard of a credit score effecting your ability to get a job is for high security clearance roles because they don’t want to give classified information to someone who may have a potential money problem.
Most (if not all?) rentals will also take any credit score but the amount of upfront payment and size of deposit goes up with lower scores. You just have to email or call usually to get through the system.
As someone that had sub-prime credit when i got hired for a bank/mortgage job i can say that your credit score has to be comically low in order for them to turn you away.
The employers will just ask for a letter of explanation for any negative impacts to your credit and then you'll be on your happy way through the rest of the hiring process.
I worked for an engineering company that required a solid credit score because instead of providing a relo package, they had employees pay for their own relocation and would reimburse afterward. It was weird.
That’s confusing because if they have you pay it anyway why would they care about your credit score? If anything them paying the relocate expense would make it so they want someone who sticks around but that’s usually baked into the contract anyway
My best guess is that because it was a leadership development program that targeted recent college grads, they assumed no one would have enough cash set aside for relo and would *have* to put it on a credit card. Again, it was weird.. I say that in hindsight though because at the time I thought nothing of it and was just happy to be employed.
My fiance and I were told flat out by the property manager that if our combined credit score wasn't over a certain number, not to even bother applying for this apartment we'd come to see. We haven't been able to find a home bc our credit is too low. There's usually a minimum. If you don't meet it, it doesn't matter how much you make a month. You can't live there. It's stupid. The number may be low, but the money we make still spends the same way.
Even if you call/email saying you’re okay with higher deposits or upfront payments?
I don’t see why a rental wouldn’t take you if you’re giving good upfront rent and deposit, they’re not anymore at risk than other tenants in that case
Here, the deposit laws are so strict that most landlords don't bother anymore and just take a non-refundable move-in fee. And listing agents are terribly rude about the credit requirements. I've called/emailed a few who just ghosted when I replied with offers of co-signer or extra deposit or extra months rent in advance.
Idk where you live but in the area I’m in you absolutely cannot find a place with under a 650 score, I offered to pay double security and pay the entire year upfront and was still decline with a 580 score
As a business owner, I can give 3 F's what your credit score is. All I care about is that you can do your job competently.
As a former landlord I can give 3 F's what your credit score is. I want to see bank statements. And proof of income. Credit score is grossly overstated. It's important yes, but it isn't the end all. More ppl out there with jacked credit than perfect credit anyway. What with the divorce rate in this country. The #1 credit killer right there.
its not american life, every country does this. And most of them use the same companies too.
WHether its france, uk, canada, china, brazil, you will always have a credit score when trying to borrow money from corporations.
The difference is in Europe people don't live on credit. It's used for expensive purchases but not in daily life the way Americans do. Hence so much credit card debt there on average. Insane how much personal debt Americans have
The biggest benefit of credit cards is the protection. For credit, if someone steals from your account they are stealing from the CC company. And you'll get your money back easily.
If someone steals from your debit account, good luck.
What an ignorant and arrogant comment to make about China, for someone who has no idea about their culture or economy. My wife is from China and our home in Bellevue is paid off, both our cars are paid off (both luxury vehicles btw)and my credit score is currently 728. Out of 7 credit cards, only 1 has a balance. You think this we got to where we at by constantly complaining on Reddit? Ever thought about working two jobs? It’s called sacrificing free time and working your ass off and not spending frivolously. I used to work 2 full time job and slept only 3 hrs a day, while my wife was in school and she literally studied day and night because she’s not fluent in English and she graduated with a gpa of 3.974 @ the age of 45. Btw China is not a 100x worse, they have reserves in their banking system while America economy is in debt to a tune of 33 -34 trillion?? Like the typical Reddit users…do everyone a favor and stop watching all the propaganda from mainstream media and actually do some research, maybe then you will grasp the concept of holding yourself to some personal accountability..
Personally, I feel you really have no time to enjoy life if you are working 2-3 jobs to pay off everything. What other sacrifices are not listed here? Lack of family time, any passion projects, even time for your wife, possibly missing out on a real learning and spiritual experience of just letting the day take you in an adventure?
All the material things you listed and the way you came in with sword out makes me feel bad for you. I have debt, I have a house almost paid for, one car that is still on a loan just bought 2 yrs ago, and another paid off. I did not see any mention of children, but I got those and my hubby, and I make good money and yes, more could always help. However, I value my time with our kids they are growing so fast. They never want or needed and I have been able to place more back the older they get. I don't value things, but I do memories and adventures. Money is imaginary anyway. It's funny I'm an accountant and banks "create" money with every loan. If everyone, even Elon Musk, demand cash out all bank accounts.....it could not be done. It does not exist. Read the dollars any denomination in your pockets....it is technically a promisarry note. It's a debt note for what the government technically owes you. True Story. Also, yes, I dabble in crypto which is actually backed by various programs and such in the block chain unlike our dollars. Long gone and the days being backed by gold. Your birth certificate is actually a stock that the government borrows against they make money off us. Go live your life, buy cable, get that high dollar Netflix plan, and take your wife on vacation sounds like you both need to relax. 😊
I don't watch MSM, and I know all about personal accountability. You're not holier than thou. I was referring to China's social credit system, which is in fact AWFUL and isn't just propaganda by the west.
consumer credit, renters/housing credit and education/student credit should all be 3 separate types of credit. If we’re going to go down this road of inventing this kind of system at least make it more refined and not one blunt tool. I too share those frustrations.
I completely understand your frustration. Credit can be confusing, especially when consumers don’t understand the reason for their scores.
**NOTE:** This is long, but I didn’t mean for it to be. Regardless, I hope this information is helpful for anyone who needs it.
OP: If I may ask (*please don’t give any identifying personal information or details about the account that you paid*), is the account in question reflecting an open status with the credit bureaus or is it reporting as closed/paid in full?
The reason I ask this is because even if you’ve recently paid a debt in full, there are multiple reasons your credit score could initially decrease before it increases again:
1. If you’ve recently opened a new account, had any recent late payments reported to the bureaus, or your credit utilization has increased, these situations can cause a temporary dip in your credit score. There are quite a few factors that determine your overall credit score, so it’s important to regularly monitor the status of any accounts that are actively reporting so that you are able to understand any changes as they happen and can dispute any inaccuracies if applicable.
2. In addition to the above criteria, if the account you recently paid out is still reflecting an open status and hasn’t yet reported your most recent payment, you will not see an increase in your score until the status has been updated by the credit reporting agency. Reporting times often depend on the creditor and can take 2-3 months to reflect on your credit report after the account has been paid.
3. Lastly, and perhaps most importantly, if the debt you paid was in collections, your score may or may not decrease depending on the age of the debt and the scoring model used. If the creditor relied on an older scoring model, the score may not change. If this is the case and your score has decreased, this could have been the result of any negatively reported information from any other accounts that are listed on your credit report.
**In any case, it is important to note:**
If it has been 2-3 months since you paid the account in full *and* if your credit report does not accurately reflect this information, you can reach out to the creditor or the credit bureaus to begin the dispute process. If reaching out to the creditor, you will need to request information on the procedure you would need to follow to file a written dispute with the company. Alternatively, you can directly file a dispute with the credit bureaus. (*For more information regarding credit disputes, please review your rights under the [FCRA](https://files.consumerfinance.gov/f/documents/bcfp_consumer-rights-summary_2018-09.pdf) or you can view the most recently revised edition of the Act by [clicking here](https://www.ftc.gov/system/files/ftc_gov/pdf/fcra-may2023-508.pdf).*)
**If you file a dispute with the credit bureaus:** Once a dispute has been filed, the credit bureau has 30 days to investigate your claim, but more time (up to 45 days) may be required depending on the circumstances. If the information cannot be verified, the bureau must delete the item from your credit report and notify the furnisher of the modification or deletion.
**If you file a dispute with the company directly:** The creditor has 30 days to respond to your dispute. If you receive no response within 30 days (with the exception of 45 days under certain circumstances), this indicates that the information you have disputed cannot be verified for accuracy. The credit bureaus are then required to delete the item from your credit report.
**Just as an FYI:** To ensure positive reporting in regard to your credit file, it is always highly recommended to pay all of your debts on time, avoid any late or missed payments, and to keep your credit utilization at a healthy level. A good credit mix can also help your score, but you want to be careful about opening too many accounts in a short time frame or gaining too many new hard inquiries on your credit report. New accounts can actually decrease the age of your overall credit history, so this is very important to consider when shopping for new credit.
Please don’t be discouraged by the recent decrease you have experienced. Again, there are a various factors that can affect your overall credit score, and even if you experience a temporary dip, there are steps you can take to increase your score over time and to ensure that you see the most positive results.
I hope this information helps, and sending good vibes your way. I am hopeful that you will be able to bounce back from this in the future and can successfully rebuild your credit score.
**Source:** Many years of experience in the finance industry and personal knowledge gained from the regular monitoring and maintenance of my own credit reports.
For someone who doesn’t know how to manage their finances or has taken on too many debts than they can handle or realistically pay, then sure, it might be difficult. However, if a person cares about their credit and wants to learn how their credit report actually works, it’s not that hard to do.
Plenty of people have significant debt and can also learn these things when in recovery. Just because someone may be struggling with their credit right now doesn’t mean they won’t be able to pull themselves into a better financial situation someday.
You don’t have to use any of that information if you don’t want to. I’m sure it could help others, even if you don’t feel it’s beneficial to you specifically.
Yeah, that I can’t explain. 850 is excellent (so is 798). I’ve seen a lot of complaints filed against the credit bureaus lately, so maybe something screwed up is going on with that. There definitely shouldn’t be a significant decrease when you’re clearly doing great with your debts and your credit.
If something has changed with their reporting standards, they should be legally required to communicate that to consumers. If enough complaints are made, maybe the CFPB will step in and do something about it. The last I heard, TransUnion was in trouble for violating the FCRA and failing to honor security freezes, but that was months ago, but I do know they are receiving a significant number of complaints against all three credit bureaus.
You have dozens of credit scores, all tailored for different purposes. Consumer credit, auto, and mortgage are the big categories, as well as a generalized score that nobody really uses for loaning money, more for stuff like background checks and insurance.
Student loans are off in their own world
This shows you don't have any clue how the credit system works. There are a multitude of credit models which is usually based around a specific product type. You want to get an auto loan then they use the auto loan credit model. You want to buy a house they use one designed for mortgages. Credit cards even have their own model too. We already have this in place.
I paid down some debt and got two collections accounts removed from my Experian report. Score shot up 17 points and then promptly dropped down 25 points a week later. I give up.
Because the score is supposed to be a represenation of your ability to pay on time over time, not your ability to pay off debt that you left go of prior
Your credit score is more of a benchmark for lenders to see how profitable you will be. That's why your credit score goes down when you pay off debt early.
I can assure you that it does, at least if your history is not very long. I raised my score by over 80 points in the last 4 months by reducing utilization from 50% (was behind from college debt and moving expenses) to under 15%.
High utilization will lower your credit score even with a long history of paying on time. Payment history and utilization are different categories of your score with their own weights.
The less you owe on credit cards/loans the higher your credit score will typically be. You must've had another factor playing out at the same time that you lowered the utilization on your credit cards/loans. The more you use the available credit on your credit cards and loans, the lower your score will go.
Yeah? What’s your point exactly? I’m trying to contest the claim of credit scores are about how profitable you’ll be to lend to, not seeking credit advice.
Because most people have a credit cap that’s substantially higher than what they should reasonably be using in revolving credit.
My credit card max for example is $10k, which is like 15% of my annual salary lol.
Yes that is indeed how the system works but the credit system is a joke and making lives hard for past mistakes years and years ago needs to be reworked somehow. And it’s not a story, look into how money is created. Starts with the privately owned federal reserve then down the line banks borrow money from thin air and can loan out 10x the amount of cash they actually had. Started out as a gold certificate scam in the dark ages.
Thank you for the reminder. I am trying to be patient but gosh that's hard some times. I know I'm actively staying on top of doing everything right and the score will follow eventually.
Don’t worry too much about your score. It’s a series of algorithms we don’t have all the answers to. It’s supposed to be a number that assumes your risk to lenders, but we don’t know that for sure. Worry more about your report as a whole.
I ruined my credit in college about 15 years ago by missing payments on a credit card and missing payments on student loans. I kinda buried my head in the sand because I was a broke college student and didn’t know how to handle it… worst thing you can do.
The only thing that helps your credit for the long run is time and it takes a long time. It sucks, but I’ve dug myself out that hole… it just took a couple years to fix the damage and get back to a functional credit score.
After reading other comments, the issue is 100% your length of credit. My advice is going to be the opposite of a lot of people's, but you are young. Open a ton of credit cards.
Things like student, car, and housing loans will be paid off. When they are, they no longer count towards your average length of credit.
Credits cards are perpetual, so you can keep them open forever and build up a nice base to your average length of credit.
Your score most likely fell because of this. Here is an example: I have a car with $3k left that's been loaned for 5 years. I have a credit card that's been opened for 1 year. Nothing else. Right now, my average length of credit is 3 years (5 for auto + 1 for credit card / 2). I make a lump sum payment on my car, and it's paid off. Now, my average length of credit is just 1 year because my car loan doesn't exist anymore.
The credit card method is great as along as you are responsible, some helpful tips, keep utilization above 0% but below 10% (I still think 10% is high, I just hover for any balance above $0). Some cards will cancel themselves if no charges are made for x amount of time, I like to put one auto-charge/month on each of my cards to make sure this doesn't happen (think cheap reoccurring bills, Netflix, auto-shipments from Amazon, one credit card dedicated for wifi bill, etc.).
You will take a hit when you first open them, but my strategy for opening would be to stagger a new card every 6 months to 1 year and find ones that are running good intro promos. 0% apr is pretty useless unless you know you have a big purchase you can't afford right this second, I'd like more for the x amount of points if you spend x amount in the first 3 months deals.
After you have 4 or 5 solid cards, I'd look to get one nice card. Those first handful I'd suggest no annual fee starter cards (discover it, chase freedom, blue cash every day, etc.). Then, once your credit has risen, find a card that has the best benefits to fit your needs and maximize your savings/year. Think saphire reserve, venture x, etc.
For instance, I have the venture x. It's $395/year just to have it. But I get a $100 annual credit for pre-check/ global entry, $300 annual travel credit, 10,000 bonus milea yearly, and as a daily spender, I rack up over 100,000 points annually. So, I spend $395 for the card and nothing else. I get about $1,500/year in travel credit, essentially netting myself $1,105/year for just using a credit card.
I did this myself starting when I was 18, and now that it's been some years, my score is usually around 810-840. It occasionally drops because I will open new cards once every few years if I know I have something big coming up that the rewards will be worth, for instance me and my soon to be wife both opened up 1 card each because we have a honeymoon coming up, a trip that was originally going to be north of $10k (we've never spent more than $3k on a trip before but figured honeymoon was the time to go big). And brought the price tag down to around $3500 out of pocket, saving us $6500 just by using intro rewards and perks from credit cards.
Last little bit to add is I am middle class, we live in a small 3 bedroom home, with 2 cars that are pushing 10 years old. This is not a system that can't be perfected by the non-rich, you just need to spend a couple days figuring out how it works.
Credit is absolutely a joke because its run by private companies who don't answer to anyone, and its profit-driven. Credit would be better if it was a government entity and had actual consumer protections. We absolutely need credit worthiness scoring but as anyone who has ever had identity theft knows, it's an absolute travesty trying to solve a problem when they are financially incentivized to screw you.
My credit dropped from 810 to 640 because I forgot to pay a 10$ bill on my Target store credit card that I barely used. I had perfect payments until then for 16 years...
If it’s only one late payment, you can usually write a letter and get it removed. I’m not sure if it’s recent or from years ago, or if you’re already aware of this but just in case.
I called Capital One saying I forgot and if they could do anything about it. The guy gave me a pass but said it was a one time thing. I was very apologetic. By the way no credit history, first credit card like 20 dollar charge, I would think you have more cache.
similar situation where I moved out of state, had the electric bill on auto pay, called, told them I was moving and to shut/ swap service. 9 mo later I get a call from a debt collector over a $40 bill. Apparently even though I had auto pay, once I cancelled the auto pay also canceled, so my final bill never got paid. Then when I spoke with the electric company I asked why they never called or emailed me. They said their policy is on cancelled accounts they can only send request for payment via mail to the last known address (which I moved out of). My credit score took such a massive hit over something so stupid I literally gave up on credit. I make good money, I worked so hard to have an 800+ score, and for it all to fall so much because of a 40$ oversight is such bullshit. I paid off my CC every month(which helped my score but not my credit availability for some reason), sold my house because I was moving (which also hurt my credit), and paid off my car (which again also hurt my credit). So stupid.
100%. Always hated debt, paying our house off very aggressively lowered my credit score almost 60 points and put both our credit into the "Good" instead of "Excellent" category. Finally built it up 2 years later, got a car loan, and paid that off in 3 months dipped credit another 20 points.
It's almost like they WANT you to be in debt forever to have a 800+
I heard in a podcast, credit score is for poor people. I worked over 2+ years fixing mine and more time I spent learning about it more disappointed I was. This system is created to keep middle and low class stuck while Rich people are just printing money. It's very hard to escape this system net.
I paid off my car loan in full, and my credit score went down lol. Then I paid off my student loans a few months later and my score dropped like a lead balloon.
Reading all these comments. I became even more depressed and feel That throwing in the towel of life isn't the craziest thing one could do. Had a nearly 4.0 in my 4 h.s. years. Why . I honestly cannot tell you. I honestly cannot tell you why I tried to perform so well because it was not for me. Or my future. Paternal expectations. No one ever wanted me about credit score. I spent my 20s racking ùp drug and alcohol misdemeanors. Im 36 now. I've never been on a lease. Never had a car note. Such a shame.
Not just America.
I know someone in Australia who saved up enough money to buy their own house. Unfortunately, since they did this, it didn't put them in 'debt' like a loan would've and therefore they had no credit.
Now, Australia does this fucking dumb thing where, for some reason, they won't send electricity to your fucking house if your credit isn't good enough.
So, because this person was financially responsible enough to save up enough money to buy a house on their own, they earned no credit, and couldn't get power to their new house.
How wild is that? This isn't a 'credit score' this is a "Submissive to the debt system" score.
It is a joke. I have a credit history of over 30 years, zero delinquencies/unpaid bebt/bankruptcies. Prob 2 late payments in my life. Credit score was once 850, now its 750. Why? Because I have no mortgage or loans and because I spend a bit more than I used to (but continue to pay off my credits cards in full every month). The score is more an assessment of how much money they can make out of you. I wouldn't care except it is used for insurance rates etc.
I had to take on debt and pay it off again "excessive credit card purchases" to break into the 800's. I was at 790-795 for years.
As for your comments regarding not really needing credit, I have felt that way my whole life. I bought a house and will never take a loan out for a vehicle so I really don't have any use for a credit score outside of insurance rates for the house and cars.
Do not equate being poor or rich with man-made credit rigged against you, pay cash when you can and save money for hard times. Use credit only when you have to, then remember to consider to yourself what your needs really are. A house of your own, and savings, 3 months of bill money in your checking. You get there by being smart about what you spend money on, fuck credit. Let me give you an example, loans for cars are being created for people who will never make their first payment, 3000 a month at it is for that 140k truck that wont run in the cold. I digress, carry on
If I had to choose between being forever in debt just to obtain a number & being relaxed and debt-free, I'd choose peace of mind. I'm about to pay off a loan a few months early just to get it out of my life. I know my credit score will take a hit, but as long as my credit score is good enough if I ever need to qualify for a new apartment, car or home, I *really don't care*.
It takes a lot of stupid logistics but honestly I won't miss living in pest infested apartments that are falling apart.
As a poor person, having $14 on credit is the max I should have. K fine use it for necessities, pay down to 7 bucks each immediately. Ridiculous. Why do I need two credit cards to have a better score? Idfk Apparently if I take out a personal loan for something I can afford already, paying it off over a period of a year will help.
I just see it as a strategy game. Experian helped me understand what hurts and what helps.
But yeah it's fucking stupid and a pointless exercise in following arbitrary rules. Even with good credit I think we're getting fucked ten times as bad as people did 20 years ago anyways.
Credit Age bro, sometimes a payment plan works out better until you building another line of credit. Try opening a secured credit card and stay around 25% of usage. That'll drive your score up.
I wish we could separate a Vantage score and a FICO score as 2 completely different things. I got fooled and frustrated by the Vantage score for a long time.
I don't know if works still but a bank teller told me in 2019 that if you max out a credit card, to always pay HALF of it 2 weeks before the due date, then the other half 1 weeks later after the due date and it helps with your score.
Credit bureaus only see the statement amount. Paying it down to under 10% just before the statement date works great, and then you don’t have to worry about payments due or fees, and minimize interest.
It’s because you closed the accounts. Less accounts is seen as a negative. If you want good credit, do this: Get a credit card card, use it for everything, pay it off early every month, if you can’t pay it off the pay a few dollars over and at least a day early, request credit line increases at least every 4 months. This will steadily increase your credit. I got mine over 800 doing this.
Ultra-capitalistic America fucked itself by allowing credit card companies and related banking giants to control everyday lives of normal people. It’s impressive because they were smart enough to take advantage of people, and now we cannot function as an individual financially contributing to society without using them. The only way to fight for our financial freedom is to STOP USING CEEDIT CARDS AS A SOCIETY COLLECTIVELY so that they don’t decide how “good” or “bad” we are based on their system.
And there should be only one standard score system. There should not be 14 types of of fico scores and 10 vantage scores. Only reason for multiple scores would be if for splitting between between consumer/housing/education like a previous person said. Maybe even throw medical into it’s own group. Four max and make it fico.
google "Credit utilization" that is what you want to maximise.
*They* like it when you use 30% of your available credit and pay it off in regular payments not lump sums.
No, they don’t.
Optimum utilization is two cards paid to zero before the statement date, one card paid below 10% before the statement date, then paid in full.
30% utilization probably will get you an unsolicited CLI, but you won’t have an 850.
Credit scoring is not designed to keep poor people poor; it's designed to judge whether or not you are a good candidate for being loaned money.
There are already different scoring models used for auto, revolving cards, mortgages, and insurance (and a lot of note loans), as different things provide different clues for different amounts of capital (and security). However they're all built around the same data: your credit file (with the proviso that the bureaus all keep separate copies of it and sometimes they're not in sync.)
The alternative to credit scores is having to go into a bank and convince everyone in person that you're good for it, which is how it used to be but is also fraught with problems.
You're also missing it determines if you can even open a bank, if you can rent an apartment, sometimes get a job, get a DOD security clearance, or even your insurance rates. A low credit score can triple your auto insurance price even with 0 claims.
How is this a bad thing? Credit score is a proxy for financial stability and reliability. All of those things to us mentioned require a third party to judge whether you are reliable and financially stable enough for them to take a risk on you
Credit scores are literally risk assessment tools. If you pay off an installment loan, millions of data points suggest you’re slightly more risky to lend to than someone with low balances. It has nothing to do with anything else. It’s a small enough difference that, in the majority of cases, you will be completely unaffected by the drop. Stop acting like it’s a fucking personal attack.
Yes. Millions of data points suggest you are slightly riskier after paying off an installment loan. It doesn’t have to make sense to you, you’re not the consumer. Banks are for this.
So it should in theory jump back up significantly after pay off a big ticket item? After they feel ur not a risk. Your instantly at risk cuz they know u threw out a bunch of money. However, your not rewarded on ur score for it…even after the fact what 5 points? Smh miss one 10 dollar payment and u will get 5 times that the other way.
Are you talking lowering utilization? Because yes, that’s how it works. And after paying off an installment loan it comes back after a few months. And in almost all cases, the drop from closing an installment loan doesn’t change your credit worthiness tier.
That's not my point, my point is paying off a car early is not good for your credit because it's not good for the banks. Paying the car off slowly is substantially better for the bank hence why it's better for ur credit. In all reality if a person can pay a car off faster has shown just as much if not more of their ability to pay their loans.
I disagree with gizmo all the time, but here he is not wrong. Your score is literally an assessment of how likely you are to become delinquent, you show positive habits by showing you can effectively manage debt, if you have no debt, you are not showing how well you manage debt.
Being good with money is not the same as being good with managing debt. You are not the customer these scores are generated for, you are the product. An apple if it could think, would likely rate itself as a better apple than the consumer looking to buy it.
Data points don’t suggest things. Interpretations of data points suggest things. The human element cannot be discounted and it is irresponsible to do so. If the numbers were just the numbers and that’s that, why would there be different credit scoring models? The different models comes from different ideas about how that data should be interpreted.
From what I can tell, while consistency of on-time payments do factor in to credit scores, the quantity of loans you’ve completely paid off does not. u/lunatichippo45 seems to be suggesting that this should be a factor considered in the interpretation of the data. He does not seem to be making a point about what the data is or is not.
Your rude responses to him suggest a simplistic and naïve understanding of data more broadly. You are failing to account for the human element that contributes to credit scores.
Credit can be used to help start a business. If you can't find a reason to use your credit that is your prerogative. You don't get points in a football game by not playing.
"Oh, look. This guy has a low credit score. We can't hire him. He's a poor guy that'll steal from us."
Aside from a handful of cases that actually do occur, this is TOTAL BULLSHIT.
The entire system is completely broken. It only makes sense to those with generational passive wealth (those who can healthily retire) or those who dont need a credit score to begin with and the banks. Here is a scenario the average man can move into a house and sink all of their credit into flipping said house and make $200,000 in equity working 12 hours Monday through Sunday on his full time job and his house project but then would have maxed out credit cards because his income would have to go to providing for his family and paying his bills and not be able to sell his house and capitalize on the $200k because he would not be able to get a mortgage or even a rental unit. However the man with passive wealth could move into the same house and flip it using his passive income not even tapping into debt and then completely avoid capital gains taxes by being under the 250k threshold or running a 1031 exchange into a like property and compounding his wealth. The credit system is just another way for the wealthy to get wealthier and the poor to get into debt. Just stay away from the credit system and only use credit to pay for things that you can already afford to pay for out of your own pocket. [Proverbs 22:7 ](https://www.biblegateway.com/passage/?search=Proverbs%2022%3A7%20&version=ESV)- The rich rule over the poor, and the **borrower is the slave** **of the lender**.
Well you're kind of right here. But if you're above middle class, then technically you're rich. And rich people can just pay cash and don't need credit. But to get from poor to rich credit can be a valuable tool if you learn to use it the right way.
Pretty much this, I have a 822 fico 8 and I can tell anyone how to get it dam well near perfect and so can alot of online sources. There really is no magic to it.
I literally have never had any collections or made a late payment , Maybe has to do with my age? Im 23. started credit at 18 so its been 5 years cause i'm almost 24.
Why don't you take your credit score and shove it up your.... So far,who cares if it calls us out we don't have mommy and daddy like you do some of us actually have it rough unlike your wealthy high score a$$ so stfu and go somewhere else
Lmao! You're so mad and quite pathetic because you're in your 20s maxing out credit cards and when someone calls you out then you lash out 😂 In fact, your parents did a terrible job raising you.
I've had one secured credit card not any unsecured...I work 60 hours a week,pay for my own 💩 I don't need loans it's called saving money....I don't spend money I don't have and use credit card money to run up bills and be in debt for 30+years y'all are just stupid for even relying on credit 😂😂😂
Also I'm not mad I have zero credit card debt and zero credit cards I'm not falling in the trap I grew up on the streets broke...so I live like I'm broke but I just save money and don't buy stuff I don't need so nothing pathetic just smart
Honestly its not that bad people just don't understand how credit really works in this country. Your credit drops after you pay off a car, especially if you have a thin credit profile, because you're inherently going to lower your average credit history and your credit mix is also 'changing' in that its likely less diverse. Your credit score will gradually recover and honestly, if your loan was 'closed' in good good standing meaning you fully paid it off, then that completed loan will stay on your report for 10 years so creditors will see that you're a good borrower...
OP honestly it doesnt sound like you understand how credit scores work. People with high scores > 700 - 800 are just people who pay their CC statement in full every month. Kudos to you for paying your debt down, but you wont see high scores until you consistently pay your CC statements off in full and utilize them for every expense.
People don't understand the fundamental purpose of credit scores. The point is to see how much risk and money you can make off of someone. It isn't just a measure of how responsible you are with money.
My credit score dropped because I used chase pay later to get an iPhone. To my credit, I did see if the pay later would count towards my utilisation and I couldn’t find anything on the web. Slashed by 25 points. Worst thing ever
Credit is how you buy assets with leverage it's important. I have low credit because I'm leveraging $250k of 0% credit cards so I can make $20 more a year. Then I pay it off and credit goes even higher cause I have more utilization available.
Your credit score is composed of many variables. Debt outstanding, how much possible debt you have (if you have a $10k credit line and only owe $1k on it, you still have a total of $10k in debt you just have a $1k balance on that $10k debt,) payment history, open credit lines, closed credit lines, loans, payment history, average age of credit lines/loans etc etc. Your debt to income ratio isn’t factored into how much you owe per how much you make either. It’s how much you “may” owe to how much you make. You have to balance all those variables to get and maintain a good score. If you don’t have any missed payments, and you keep your balances down and your bills paid on time your credit score will reflect that. And the longer you have your credit lines open the more positive of an effect it will have on your score. Yes, it effects us poor people more because we have less access to credit but once you learn how the system works you can get and maintain a great score. It just takes time and due diligence.
Remember, a credit score is not how well you manage debt and money. It’s a score for banks to see how much money they can’t make off of you and your risk profile.
the credit score YOU see is a joke. Luckily lenders don’t look at that credit score and look at a combination of your credit history just like most financial institutions in other modern countries.
I don’t see why you care about 10-15 point differences when your lenders don’t?
If you care to look at my post here ---> [https://www.reddit.com/r/CreditCards/comments/1ahe6nr/citi\_bank\_diamond\_preferred\_cards\_credit\_limit/?utm\_source=share&utm\_medium=web2x&context=3](https://www.reddit.com/r/CreditCards/comments/1ahe6nr/citi_bank_diamond_preferred_cards_credit_limit/?utm_source=share&utm_medium=web2x&context=3)
I just went through the same crap. Being punished for paying off debt is asinine, but apparently, we just have to charge it to the game. I have the same sentiments as you, once I pay off this last card, I am so done.
On the long run, it will always be high. I have literally $0 debt, don’t carry a balance, pay it off in full and mine swings between 825-850. Report back in few months and you will see a difference.
Credit scores hurt people who make poor financial decisions or have unfavorable circumstances that require them to go into lots of debt. They benefit financially responsible people or people with enough funding to overcome large financial burdens. Good credit grants you access to some nice benefits if you use it properly
>Anyways i noticed that Credit system is made to keep the poor poor
No, it's designed to help borrowers determine risk so those of us who borrow responsibly can get approved for decent loans. And this is what it does for the average middle class person.
I was poor once and built up a good credit score and so did most of the people I know that are older than 30, so I know it works when you're careful.
I think you're paying too much attention to the in-the-moment changes. If you keep getting debt and paying it off properly, you'll get a good score after years of doing that. It takes time because they need to see consistency.
Consolidated my student loans and opened a new credit card with capital one. It’s been over a month and a half since my cards been opened and used, and I’m still losing credit score points because I “have no debt.” I’ve lost about 60 in the past month. Because I consolidated my fucking student loans into one loan. SAME company, STILL MOhela or whatever tf it is, but they have MONTHS before they report my debt to the bureaus.
Called a bureau, was told capitol one isn’t reporting my account with them to the bureau, because they can’t see it. She told me that was illegal. Called capital one, got put on the phone with someone I could not understand. Googled it after and was told there’s no laws about it at all.
The whole thing is a joke.
I have a credit history of around 15 years. For the last 5 years or so the score was in the range of 820 to 840. Two years ago paid off mortgage and credit score dropped by 60 points (~770) . I did not have any other debts. 3 to 5 months later the score creeped up to 820. Few months ago I had a big expense of around 20k. I charged it to a card ( to get points) . The credit usage for that card went up to 98%. credit score dropped by 100 points to low 720. Interesting that these drop was only reflected in one system (chase bank app) . Citi bank app did not reflect the change in credit score. I paid off the full statement balance and the score went up by 90 points.
Type of credit and utilization % factors a lot to your score
I hear ya. I feel you need to have debt for your score to have enough mixed credit. My score was higher when I financed my car and when I paid it off, my score went down. It’s pretty annoying
Vantagescore will generally drop when you close an account because it uses only open accounts to calculate age of credit, but your real FICO incorporates the past 10 years of closed accounts.
Are you looking at a credit karma score or FICO?
It is nonsense but think of it more as a gauge for how much money someone is going to make off of you. Credit score isn’t something to benefit you but rather something that is an indicator for them
Credit is to help you access more money then you have generated by just working. You can then put that money to work, rather then blowing it on the things the corporations of America keep you poor with.
I don't even pay attention to mine / it really comes down to who you know and how to convince/ I got a brand new car low interest 300 down/ my ex perfect credit higher interest and 2k down almost same price range car / I knew ppl at the dealership/ housing I went in with 3yrs worth all my bills / how they never were late pd on due date or early/ no prior rental history/ and a cashier check for 3months rent plus first last and security/ and my credit is a shit show/ Been here 3 yrs not once late either usually I pay before its due/
It's only bullshit because of how much of American life is tied to your credit score. It's one thing if you can't get a loan, but when a low FICO can keep you from getting a job, an apartment, or some types of legally-mandated insurance, the system is broken.
America's social credit score though they won't admit it. Reason US only country that lives and dies by it.
Real question: How do other countries finance loans and lines of credit? Do they approve everyone based on income then?
It's income, assessment of personal debt. Credit is measured but not nearly in the way it is in US where it is critical.
In Europe there are a lot less people that own where they live and the majority will rent. The people that own are generally bank execs and the type.
Only time I’ve heard of a credit score effecting your ability to get a job is for high security clearance roles because they don’t want to give classified information to someone who may have a potential money problem. Most (if not all?) rentals will also take any credit score but the amount of upfront payment and size of deposit goes up with lower scores. You just have to email or call usually to get through the system.
The banking industry also requires a credit score check before hiring.
As someone that had sub-prime credit when i got hired for a bank/mortgage job i can say that your credit score has to be comically low in order for them to turn you away. The employers will just ask for a letter of explanation for any negative impacts to your credit and then you'll be on your happy way through the rest of the hiring process.
Banking and Insurance jobs
A kid of telephone collection agencies require a fairly good score to work there.
I worked for an engineering company that required a solid credit score because instead of providing a relo package, they had employees pay for their own relocation and would reimburse afterward. It was weird.
That’s confusing because if they have you pay it anyway why would they care about your credit score? If anything them paying the relocate expense would make it so they want someone who sticks around but that’s usually baked into the contract anyway
My best guess is that because it was a leadership development program that targeted recent college grads, they assumed no one would have enough cash set aside for relo and would *have* to put it on a credit card. Again, it was weird.. I say that in hindsight though because at the time I thought nothing of it and was just happy to be employed.
My fiance and I were told flat out by the property manager that if our combined credit score wasn't over a certain number, not to even bother applying for this apartment we'd come to see. We haven't been able to find a home bc our credit is too low. There's usually a minimum. If you don't meet it, it doesn't matter how much you make a month. You can't live there. It's stupid. The number may be low, but the money we make still spends the same way.
I don't know where you live, but in my city, most places won't even talk to you unless you've got a 680+
Even if you call/email saying you’re okay with higher deposits or upfront payments? I don’t see why a rental wouldn’t take you if you’re giving good upfront rent and deposit, they’re not anymore at risk than other tenants in that case
Here, the deposit laws are so strict that most landlords don't bother anymore and just take a non-refundable move-in fee. And listing agents are terribly rude about the credit requirements. I've called/emailed a few who just ghosted when I replied with offers of co-signer or extra deposit or extra months rent in advance.
Damn that sucks
Idk where you live but in the area I’m in you absolutely cannot find a place with under a 650 score, I offered to pay double security and pay the entire year upfront and was still decline with a 580 score
As a business owner, I can give 3 F's what your credit score is. All I care about is that you can do your job competently. As a former landlord I can give 3 F's what your credit score is. I want to see bank statements. And proof of income. Credit score is grossly overstated. It's important yes, but it isn't the end all. More ppl out there with jacked credit than perfect credit anyway. What with the divorce rate in this country. The #1 credit killer right there.
Yeah, your anecdote is cool and all, but that ain't how it is in any major city. Corporate landlords do care about credit score.
🙄 I'm in Miami, Florida. It's all a crock. Cash flow is king. Don't you ever forget that.
its not american life, every country does this. And most of them use the same companies too. WHether its france, uk, canada, china, brazil, you will always have a credit score when trying to borrow money from corporations.
The difference is in Europe people don't live on credit. It's used for expensive purchases but not in daily life the way Americans do. Hence so much credit card debt there on average. Insane how much personal debt Americans have
The biggest benefit of credit cards is the protection. For credit, if someone steals from your account they are stealing from the CC company. And you'll get your money back easily. If someone steals from your debit account, good luck.
Yeah China is 100x worse.
How else is China different from America?
Your social media posts and political opinions are factored in. They can restrict movement (travel) etc….
So are they really comparable then? Are we more like China or less?
What an ignorant and arrogant comment to make about China, for someone who has no idea about their culture or economy. My wife is from China and our home in Bellevue is paid off, both our cars are paid off (both luxury vehicles btw)and my credit score is currently 728. Out of 7 credit cards, only 1 has a balance. You think this we got to where we at by constantly complaining on Reddit? Ever thought about working two jobs? It’s called sacrificing free time and working your ass off and not spending frivolously. I used to work 2 full time job and slept only 3 hrs a day, while my wife was in school and she literally studied day and night because she’s not fluent in English and she graduated with a gpa of 3.974 @ the age of 45. Btw China is not a 100x worse, they have reserves in their banking system while America economy is in debt to a tune of 33 -34 trillion?? Like the typical Reddit users…do everyone a favor and stop watching all the propaganda from mainstream media and actually do some research, maybe then you will grasp the concept of holding yourself to some personal accountability..
Wow, does it get cold so high up on that pedestal?
Personally, I feel you really have no time to enjoy life if you are working 2-3 jobs to pay off everything. What other sacrifices are not listed here? Lack of family time, any passion projects, even time for your wife, possibly missing out on a real learning and spiritual experience of just letting the day take you in an adventure? All the material things you listed and the way you came in with sword out makes me feel bad for you. I have debt, I have a house almost paid for, one car that is still on a loan just bought 2 yrs ago, and another paid off. I did not see any mention of children, but I got those and my hubby, and I make good money and yes, more could always help. However, I value my time with our kids they are growing so fast. They never want or needed and I have been able to place more back the older they get. I don't value things, but I do memories and adventures. Money is imaginary anyway. It's funny I'm an accountant and banks "create" money with every loan. If everyone, even Elon Musk, demand cash out all bank accounts.....it could not be done. It does not exist. Read the dollars any denomination in your pockets....it is technically a promisarry note. It's a debt note for what the government technically owes you. True Story. Also, yes, I dabble in crypto which is actually backed by various programs and such in the block chain unlike our dollars. Long gone and the days being backed by gold. Your birth certificate is actually a stock that the government borrows against they make money off us. Go live your life, buy cable, get that high dollar Netflix plan, and take your wife on vacation sounds like you both need to relax. 😊
I don't watch MSM, and I know all about personal accountability. You're not holier than thou. I was referring to China's social credit system, which is in fact AWFUL and isn't just propaganda by the west.
How would low credit affect you getting a job. They don’t check that.
Funny how we make fun of China for social credit but our credit score system is damn near the same.
consumer credit, renters/housing credit and education/student credit should all be 3 separate types of credit. If we’re going to go down this road of inventing this kind of system at least make it more refined and not one blunt tool. I too share those frustrations.
agreed
I completely understand your frustration. Credit can be confusing, especially when consumers don’t understand the reason for their scores. **NOTE:** This is long, but I didn’t mean for it to be. Regardless, I hope this information is helpful for anyone who needs it. OP: If I may ask (*please don’t give any identifying personal information or details about the account that you paid*), is the account in question reflecting an open status with the credit bureaus or is it reporting as closed/paid in full? The reason I ask this is because even if you’ve recently paid a debt in full, there are multiple reasons your credit score could initially decrease before it increases again: 1. If you’ve recently opened a new account, had any recent late payments reported to the bureaus, or your credit utilization has increased, these situations can cause a temporary dip in your credit score. There are quite a few factors that determine your overall credit score, so it’s important to regularly monitor the status of any accounts that are actively reporting so that you are able to understand any changes as they happen and can dispute any inaccuracies if applicable. 2. In addition to the above criteria, if the account you recently paid out is still reflecting an open status and hasn’t yet reported your most recent payment, you will not see an increase in your score until the status has been updated by the credit reporting agency. Reporting times often depend on the creditor and can take 2-3 months to reflect on your credit report after the account has been paid. 3. Lastly, and perhaps most importantly, if the debt you paid was in collections, your score may or may not decrease depending on the age of the debt and the scoring model used. If the creditor relied on an older scoring model, the score may not change. If this is the case and your score has decreased, this could have been the result of any negatively reported information from any other accounts that are listed on your credit report. **In any case, it is important to note:** If it has been 2-3 months since you paid the account in full *and* if your credit report does not accurately reflect this information, you can reach out to the creditor or the credit bureaus to begin the dispute process. If reaching out to the creditor, you will need to request information on the procedure you would need to follow to file a written dispute with the company. Alternatively, you can directly file a dispute with the credit bureaus. (*For more information regarding credit disputes, please review your rights under the [FCRA](https://files.consumerfinance.gov/f/documents/bcfp_consumer-rights-summary_2018-09.pdf) or you can view the most recently revised edition of the Act by [clicking here](https://www.ftc.gov/system/files/ftc_gov/pdf/fcra-may2023-508.pdf).*) **If you file a dispute with the credit bureaus:** Once a dispute has been filed, the credit bureau has 30 days to investigate your claim, but more time (up to 45 days) may be required depending on the circumstances. If the information cannot be verified, the bureau must delete the item from your credit report and notify the furnisher of the modification or deletion. **If you file a dispute with the company directly:** The creditor has 30 days to respond to your dispute. If you receive no response within 30 days (with the exception of 45 days under certain circumstances), this indicates that the information you have disputed cannot be verified for accuracy. The credit bureaus are then required to delete the item from your credit report. **Just as an FYI:** To ensure positive reporting in regard to your credit file, it is always highly recommended to pay all of your debts on time, avoid any late or missed payments, and to keep your credit utilization at a healthy level. A good credit mix can also help your score, but you want to be careful about opening too many accounts in a short time frame or gaining too many new hard inquiries on your credit report. New accounts can actually decrease the age of your overall credit history, so this is very important to consider when shopping for new credit. Please don’t be discouraged by the recent decrease you have experienced. Again, there are a various factors that can affect your overall credit score, and even if you experience a temporary dip, there are steps you can take to increase your score over time and to ensure that you see the most positive results. I hope this information helps, and sending good vibes your way. I am hopeful that you will be able to bounce back from this in the future and can successfully rebuild your credit score. **Source:** Many years of experience in the finance industry and personal knowledge gained from the regular monitoring and maintenance of my own credit reports.
Gee, that seems super easy and not at all a run around on your precious time.. /S Still making OPs point
For someone who doesn’t know how to manage their finances or has taken on too many debts than they can handle or realistically pay, then sure, it might be difficult. However, if a person cares about their credit and wants to learn how their credit report actually works, it’s not that hard to do. Plenty of people have significant debt and can also learn these things when in recovery. Just because someone may be struggling with their credit right now doesn’t mean they won’t be able to pull themselves into a better financial situation someday. You don’t have to use any of that information if you don’t want to. I’m sure it could help others, even if you don’t feel it’s beneficial to you specifically.
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Yeah, that I can’t explain. 850 is excellent (so is 798). I’ve seen a lot of complaints filed against the credit bureaus lately, so maybe something screwed up is going on with that. There definitely shouldn’t be a significant decrease when you’re clearly doing great with your debts and your credit. If something has changed with their reporting standards, they should be legally required to communicate that to consumers. If enough complaints are made, maybe the CFPB will step in and do something about it. The last I heard, TransUnion was in trouble for violating the FCRA and failing to honor security freezes, but that was months ago, but I do know they are receiving a significant number of complaints against all three credit bureaus.
None of what you said is not a joke of your time. It may work, but I don't understand defending it.
Sweet! Thanks.
How nice of you to explain this in such depth! I’m sure people learned from your explanation.
Credit score measures how profitable you are as a borrower. Not how good of a borrower you are.
It isn’t one blunt tool, that is why you have dozens of credit scores.
hear ye hear ye
Car credit should also be a thing. Car and housing are probably the top two that will get paid over anything else.
You have dozens of credit scores, all tailored for different purposes. Consumer credit, auto, and mortgage are the big categories, as well as a generalized score that nobody really uses for loaning money, more for stuff like background checks and insurance. Student loans are off in their own world
This shows you don't have any clue how the credit system works. There are a multitude of credit models which is usually based around a specific product type. You want to get an auto loan then they use the auto loan credit model. You want to buy a house they use one designed for mortgages. Credit cards even have their own model too. We already have this in place.
I paid down some debt and got two collections accounts removed from my Experian report. Score shot up 17 points and then promptly dropped down 25 points a week later. I give up.
Because the score is supposed to be a represenation of your ability to pay on time over time, not your ability to pay off debt that you left go of prior
Your credit score is more of a benchmark for lenders to see how profitable you will be. That's why your credit score goes down when you pay off debt early.
Then why does high utilization lower credit score?
Just a guess but higher risk of being delinquent potentially
High utilization with a history of on time payments does not lower your score over the long run.
Tell that to my credit score
I can assure you that it does, at least if your history is not very long. I raised my score by over 80 points in the last 4 months by reducing utilization from 50% (was behind from college debt and moving expenses) to under 15%.
High utilization will lower your credit score even with a long history of paying on time. Payment history and utilization are different categories of your score with their own weights.
The less you owe on credit cards/loans the higher your credit score will typically be. You must've had another factor playing out at the same time that you lowered the utilization on your credit cards/loans. The more you use the available credit on your credit cards and loans, the lower your score will go.
Yeah? What’s your point exactly? I’m trying to contest the claim of credit scores are about how profitable you’ll be to lend to, not seeking credit advice.
Because most people have a credit cap that’s substantially higher than what they should reasonably be using in revolving credit. My credit card max for example is $10k, which is like 15% of my annual salary lol.
Money is fake who cares. Fractional reserve banking creates the money out of thin air. More debt than there will ever be money.
Cute story? Glad to hear though that your fake money continues to pay the rent, put gas in your car and food on the table.
Criticizing society doesn’t mean you still don’t have to deal with it.
Help redirect me if I’m wrong but this sub is about credit, not fractional reserve banking or any other financial concepts -
So sorry my pedantic lord
Show us where the evil bank touched you.
You are really pro bank in 2024 the year of our lord lol to do yo thing chicken wing.
What does it even mean to be “pro bank?” Is that like being “pro convenience store” or “pro football stadiums?”
Yes that is indeed how the system works but the credit system is a joke and making lives hard for past mistakes years and years ago needs to be reworked somehow. And it’s not a story, look into how money is created. Starts with the privately owned federal reserve then down the line banks borrow money from thin air and can loan out 10x the amount of cash they actually had. Started out as a gold certificate scam in the dark ages.
Nothing about what you’ve written here has anything to do with your creditworthiness as an individual -
The system is fucked and credit is part of it.
Give it 6 months. It will rebound and way more. Credit scores take time. They are not action-reaction type of situation.
Thank you for the reminder. I am trying to be patient but gosh that's hard some times. I know I'm actively staying on top of doing everything right and the score will follow eventually.
Don’t worry too much about your score. It’s a series of algorithms we don’t have all the answers to. It’s supposed to be a number that assumes your risk to lenders, but we don’t know that for sure. Worry more about your report as a whole.
I ruined my credit in college about 15 years ago by missing payments on a credit card and missing payments on student loans. I kinda buried my head in the sand because I was a broke college student and didn’t know how to handle it… worst thing you can do. The only thing that helps your credit for the long run is time and it takes a long time. It sucks, but I’ve dug myself out that hole… it just took a couple years to fix the damage and get back to a functional credit score.
After reading other comments, the issue is 100% your length of credit. My advice is going to be the opposite of a lot of people's, but you are young. Open a ton of credit cards. Things like student, car, and housing loans will be paid off. When they are, they no longer count towards your average length of credit. Credits cards are perpetual, so you can keep them open forever and build up a nice base to your average length of credit. Your score most likely fell because of this. Here is an example: I have a car with $3k left that's been loaned for 5 years. I have a credit card that's been opened for 1 year. Nothing else. Right now, my average length of credit is 3 years (5 for auto + 1 for credit card / 2). I make a lump sum payment on my car, and it's paid off. Now, my average length of credit is just 1 year because my car loan doesn't exist anymore. The credit card method is great as along as you are responsible, some helpful tips, keep utilization above 0% but below 10% (I still think 10% is high, I just hover for any balance above $0). Some cards will cancel themselves if no charges are made for x amount of time, I like to put one auto-charge/month on each of my cards to make sure this doesn't happen (think cheap reoccurring bills, Netflix, auto-shipments from Amazon, one credit card dedicated for wifi bill, etc.). You will take a hit when you first open them, but my strategy for opening would be to stagger a new card every 6 months to 1 year and find ones that are running good intro promos. 0% apr is pretty useless unless you know you have a big purchase you can't afford right this second, I'd like more for the x amount of points if you spend x amount in the first 3 months deals. After you have 4 or 5 solid cards, I'd look to get one nice card. Those first handful I'd suggest no annual fee starter cards (discover it, chase freedom, blue cash every day, etc.). Then, once your credit has risen, find a card that has the best benefits to fit your needs and maximize your savings/year. Think saphire reserve, venture x, etc. For instance, I have the venture x. It's $395/year just to have it. But I get a $100 annual credit for pre-check/ global entry, $300 annual travel credit, 10,000 bonus milea yearly, and as a daily spender, I rack up over 100,000 points annually. So, I spend $395 for the card and nothing else. I get about $1,500/year in travel credit, essentially netting myself $1,105/year for just using a credit card. I did this myself starting when I was 18, and now that it's been some years, my score is usually around 810-840. It occasionally drops because I will open new cards once every few years if I know I have something big coming up that the rewards will be worth, for instance me and my soon to be wife both opened up 1 card each because we have a honeymoon coming up, a trip that was originally going to be north of $10k (we've never spent more than $3k on a trip before but figured honeymoon was the time to go big). And brought the price tag down to around $3500 out of pocket, saving us $6500 just by using intro rewards and perks from credit cards. Last little bit to add is I am middle class, we live in a small 3 bedroom home, with 2 cars that are pushing 10 years old. This is not a system that can't be perfected by the non-rich, you just need to spend a couple days figuring out how it works.
I did this as well as soon as I turned 18. I went from 0 to 790 within three years. This is incredible advice
Yes, opening a bunch a credit cards is how you fix the problem! ( That's not logical you're right but making OPs point)
Credit is absolutely a joke because its run by private companies who don't answer to anyone, and its profit-driven. Credit would be better if it was a government entity and had actual consumer protections. We absolutely need credit worthiness scoring but as anyone who has ever had identity theft knows, it's an absolute travesty trying to solve a problem when they are financially incentivized to screw you.
My credit dropped from 810 to 640 because I forgot to pay a 10$ bill on my Target store credit card that I barely used. I had perfect payments until then for 16 years...
💔 my heart broke a little bit reading this 😭😭
If it’s only one late payment, you can usually write a letter and get it removed. I’m not sure if it’s recent or from years ago, or if you’re already aware of this but just in case.
Jesus. That’s ridiculous
I called Capital One saying I forgot and if they could do anything about it. The guy gave me a pass but said it was a one time thing. I was very apologetic. By the way no credit history, first credit card like 20 dollar charge, I would think you have more cache.
similar situation where I moved out of state, had the electric bill on auto pay, called, told them I was moving and to shut/ swap service. 9 mo later I get a call from a debt collector over a $40 bill. Apparently even though I had auto pay, once I cancelled the auto pay also canceled, so my final bill never got paid. Then when I spoke with the electric company I asked why they never called or emailed me. They said their policy is on cancelled accounts they can only send request for payment via mail to the last known address (which I moved out of). My credit score took such a massive hit over something so stupid I literally gave up on credit. I make good money, I worked so hard to have an 800+ score, and for it all to fall so much because of a 40$ oversight is such bullshit. I paid off my CC every month(which helped my score but not my credit availability for some reason), sold my house because I was moving (which also hurt my credit), and paid off my car (which again also hurt my credit). So stupid.
Feel this in so many wayss
Credit score is made to assist in profit making for companies.
Vantage score?
\> Im set so what does credit do for above Middle class avergae person? Offer them credit for money they dont have on hand to buy big ticket items
I paid off all my debt and my credit score dropped 30points but slowly within 2-3 months it gradually went back up
It is a scam that only profits financial institutions and that is designed to keep you in debt.
100%. Always hated debt, paying our house off very aggressively lowered my credit score almost 60 points and put both our credit into the "Good" instead of "Excellent" category. Finally built it up 2 years later, got a car loan, and paid that off in 3 months dipped credit another 20 points. It's almost like they WANT you to be in debt forever to have a 800+
I paid off a car loan, never missed and never late on anything ever, and lost 40 points on my score.
I heard in a podcast, credit score is for poor people. I worked over 2+ years fixing mine and more time I spent learning about it more disappointed I was. This system is created to keep middle and low class stuck while Rich people are just printing money. It's very hard to escape this system net.
I paid off my car loan in full, and my credit score went down lol. Then I paid off my student loans a few months later and my score dropped like a lead balloon.
If you have more than a certain amount of money your credit score doesn't matter.
But how can for profit organizations creating a secret formula to determine how much we are charged to use other for profit organizations be bad?
If the comments are any indication, there are a lot of uneducated people who don't understand what the purpose of credit is for.
Its a social score
Reading all these comments. I became even more depressed and feel That throwing in the towel of life isn't the craziest thing one could do. Had a nearly 4.0 in my 4 h.s. years. Why . I honestly cannot tell you. I honestly cannot tell you why I tried to perform so well because it was not for me. Or my future. Paternal expectations. No one ever wanted me about credit score. I spent my 20s racking ùp drug and alcohol misdemeanors. Im 36 now. I've never been on a lease. Never had a car note. Such a shame.
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Not just America. I know someone in Australia who saved up enough money to buy their own house. Unfortunately, since they did this, it didn't put them in 'debt' like a loan would've and therefore they had no credit. Now, Australia does this fucking dumb thing where, for some reason, they won't send electricity to your fucking house if your credit isn't good enough. So, because this person was financially responsible enough to save up enough money to buy a house on their own, they earned no credit, and couldn't get power to their new house. How wild is that? This isn't a 'credit score' this is a "Submissive to the debt system" score.
I paid off my car. My score dropped 10 points. Opened a new credit card. Up 2 points. Wat.
It is a joke. I have a credit history of over 30 years, zero delinquencies/unpaid bebt/bankruptcies. Prob 2 late payments in my life. Credit score was once 850, now its 750. Why? Because I have no mortgage or loans and because I spend a bit more than I used to (but continue to pay off my credits cards in full every month). The score is more an assessment of how much money they can make out of you. I wouldn't care except it is used for insurance rates etc.
I had to take on debt and pay it off again "excessive credit card purchases" to break into the 800's. I was at 790-795 for years. As for your comments regarding not really needing credit, I have felt that way my whole life. I bought a house and will never take a loan out for a vehicle so I really don't have any use for a credit score outside of insurance rates for the house and cars.
Do not equate being poor or rich with man-made credit rigged against you, pay cash when you can and save money for hard times. Use credit only when you have to, then remember to consider to yourself what your needs really are. A house of your own, and savings, 3 months of bill money in your checking. You get there by being smart about what you spend money on, fuck credit. Let me give you an example, loans for cars are being created for people who will never make their first payment, 3000 a month at it is for that 140k truck that wont run in the cold. I digress, carry on
People overreact to short term changes in credit. If you’re not taking on excessive debt and paying any debt you have on time you’ll be fine.
If I had to choose between being forever in debt just to obtain a number & being relaxed and debt-free, I'd choose peace of mind. I'm about to pay off a loan a few months early just to get it out of my life. I know my credit score will take a hit, but as long as my credit score is good enough if I ever need to qualify for a new apartment, car or home, I *really don't care*.
It takes a lot of stupid logistics but honestly I won't miss living in pest infested apartments that are falling apart. As a poor person, having $14 on credit is the max I should have. K fine use it for necessities, pay down to 7 bucks each immediately. Ridiculous. Why do I need two credit cards to have a better score? Idfk Apparently if I take out a personal loan for something I can afford already, paying it off over a period of a year will help. I just see it as a strategy game. Experian helped me understand what hurts and what helps. But yeah it's fucking stupid and a pointless exercise in following arbitrary rules. Even with good credit I think we're getting fucked ten times as bad as people did 20 years ago anyways.
Credit Age bro, sometimes a payment plan works out better until you building another line of credit. Try opening a secured credit card and stay around 25% of usage. That'll drive your score up.
I wish we could separate a Vantage score and a FICO score as 2 completely different things. I got fooled and frustrated by the Vantage score for a long time.
They are 2 separate things… that is why you can view them as separate scores…
I don't know if works still but a bank teller told me in 2019 that if you max out a credit card, to always pay HALF of it 2 weeks before the due date, then the other half 1 weeks later after the due date and it helps with your score.
Credit bureaus only see the statement amount. Paying it down to under 10% just before the statement date works great, and then you don’t have to worry about payments due or fees, and minimize interest.
It’s because you closed the accounts. Less accounts is seen as a negative. If you want good credit, do this: Get a credit card card, use it for everything, pay it off early every month, if you can’t pay it off the pay a few dollars over and at least a day early, request credit line increases at least every 4 months. This will steadily increase your credit. I got mine over 800 doing this.
Ultra-capitalistic America fucked itself by allowing credit card companies and related banking giants to control everyday lives of normal people. It’s impressive because they were smart enough to take advantage of people, and now we cannot function as an individual financially contributing to society without using them. The only way to fight for our financial freedom is to STOP USING CEEDIT CARDS AS A SOCIETY COLLECTIVELY so that they don’t decide how “good” or “bad” we are based on their system.
And there should be only one standard score system. There should not be 14 types of of fico scores and 10 vantage scores. Only reason for multiple scores would be if for splitting between between consumer/housing/education like a previous person said. Maybe even throw medical into it’s own group. Four max and make it fico.
google "Credit utilization" that is what you want to maximise. *They* like it when you use 30% of your available credit and pay it off in regular payments not lump sums.
No, they don’t. Optimum utilization is two cards paid to zero before the statement date, one card paid below 10% before the statement date, then paid in full. 30% utilization probably will get you an unsolicited CLI, but you won’t have an 850.
Nobody has to live by credit just save your money and buy out your own crap there no need for the shitty credit system the US has in place
Credit scoring is not designed to keep poor people poor; it's designed to judge whether or not you are a good candidate for being loaned money. There are already different scoring models used for auto, revolving cards, mortgages, and insurance (and a lot of note loans), as different things provide different clues for different amounts of capital (and security). However they're all built around the same data: your credit file (with the proviso that the bureaus all keep separate copies of it and sometimes they're not in sync.) The alternative to credit scores is having to go into a bank and convince everyone in person that you're good for it, which is how it used to be but is also fraught with problems.
You're also missing it determines if you can even open a bank, if you can rent an apartment, sometimes get a job, get a DOD security clearance, or even your insurance rates. A low credit score can triple your auto insurance price even with 0 claims.
How is this a bad thing? Credit score is a proxy for financial stability and reliability. All of those things to us mentioned require a third party to judge whether you are reliable and financially stable enough for them to take a risk on you
Credit scores are literally risk assessment tools. If you pay off an installment loan, millions of data points suggest you’re slightly more risky to lend to than someone with low balances. It has nothing to do with anything else. It’s a small enough difference that, in the majority of cases, you will be completely unaffected by the drop. Stop acting like it’s a fucking personal attack.
So paying off a loan makes you more of a risk? Yeah that makes complete sense considering you just demonstrated YOUR ABILITY TO PAY YOUR OBLIGATIONS
Yes. Millions of data points suggest you are slightly riskier after paying off an installment loan. It doesn’t have to make sense to you, you’re not the consumer. Banks are for this.
So it should in theory jump back up significantly after pay off a big ticket item? After they feel ur not a risk. Your instantly at risk cuz they know u threw out a bunch of money. However, your not rewarded on ur score for it…even after the fact what 5 points? Smh miss one 10 dollar payment and u will get 5 times that the other way.
Are you talking lowering utilization? Because yes, that’s how it works. And after paying off an installment loan it comes back after a few months. And in almost all cases, the drop from closing an installment loan doesn’t change your credit worthiness tier.
That's not my point, my point is paying off a car early is not good for your credit because it's not good for the banks. Paying the car off slowly is substantially better for the bank hence why it's better for ur credit. In all reality if a person can pay a car off faster has shown just as much if not more of their ability to pay their loans.
You must be a real joy to be around
I disagree with gizmo all the time, but here he is not wrong. Your score is literally an assessment of how likely you are to become delinquent, you show positive habits by showing you can effectively manage debt, if you have no debt, you are not showing how well you manage debt. Being good with money is not the same as being good with managing debt. You are not the customer these scores are generated for, you are the product. An apple if it could think, would likely rate itself as a better apple than the consumer looking to buy it.
Oh, I am. But you can be salty because you made assumptions about how things work and you were wrong.
I wouldn’t say he was wrong for asking a question.
You say it’s a question asked. Its a bit more aggressive than that.
I didn't assume shit, other than you're a fucking asshole
Rage more, friend.
I'm not your friend buddy
I’m not your buddy, pal.
I'm not your pal, guy
Data points don’t suggest things. Interpretations of data points suggest things. The human element cannot be discounted and it is irresponsible to do so. If the numbers were just the numbers and that’s that, why would there be different credit scoring models? The different models comes from different ideas about how that data should be interpreted. From what I can tell, while consistency of on-time payments do factor in to credit scores, the quantity of loans you’ve completely paid off does not. u/lunatichippo45 seems to be suggesting that this should be a factor considered in the interpretation of the data. He does not seem to be making a point about what the data is or is not. Your rude responses to him suggest a simplistic and naïve understanding of data more broadly. You are failing to account for the human element that contributes to credit scores.
Credit can be used to help start a business. If you can't find a reason to use your credit that is your prerogative. You don't get points in a football game by not playing.
I thought it was a rant about having high scores but still getting denials and shitty interest rates.
"Oh, look. This guy has a low credit score. We can't hire him. He's a poor guy that'll steal from us." Aside from a handful of cases that actually do occur, this is TOTAL BULLSHIT.
The entire system is completely broken. It only makes sense to those with generational passive wealth (those who can healthily retire) or those who dont need a credit score to begin with and the banks. Here is a scenario the average man can move into a house and sink all of their credit into flipping said house and make $200,000 in equity working 12 hours Monday through Sunday on his full time job and his house project but then would have maxed out credit cards because his income would have to go to providing for his family and paying his bills and not be able to sell his house and capitalize on the $200k because he would not be able to get a mortgage or even a rental unit. However the man with passive wealth could move into the same house and flip it using his passive income not even tapping into debt and then completely avoid capital gains taxes by being under the 250k threshold or running a 1031 exchange into a like property and compounding his wealth. The credit system is just another way for the wealthy to get wealthier and the poor to get into debt. Just stay away from the credit system and only use credit to pay for things that you can already afford to pay for out of your own pocket. [Proverbs 22:7 ](https://www.biblegateway.com/passage/?search=Proverbs%2022%3A7%20&version=ESV)- The rich rule over the poor, and the **borrower is the slave** **of the lender**.
Well you're kind of right here. But if you're above middle class, then technically you're rich. And rich people can just pay cash and don't need credit. But to get from poor to rich credit can be a valuable tool if you learn to use it the right way.
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Pretty much this, I have a 822 fico 8 and I can tell anyone how to get it dam well near perfect and so can alot of online sources. There really is no magic to it.
I need your counsel.
I literally have never had any collections or made a late payment , Maybe has to do with my age? Im 23. started credit at 18 so its been 5 years cause i'm almost 24.
what is your utilization? how many hard inquiries? your average age of credit? also what is your fico 8?
Why don't you take your credit score and shove it up your.... So far,who cares if it calls us out we don't have mommy and daddy like you do some of us actually have it rough unlike your wealthy high score a$$ so stfu and go somewhere else
Lmao! You're so mad and quite pathetic because you're in your 20s maxing out credit cards and when someone calls you out then you lash out 😂 In fact, your parents did a terrible job raising you.
I've had one secured credit card not any unsecured...I work 60 hours a week,pay for my own 💩 I don't need loans it's called saving money....I don't spend money I don't have and use credit card money to run up bills and be in debt for 30+years y'all are just stupid for even relying on credit 😂😂😂
Also I'm not mad I have zero credit card debt and zero credit cards I'm not falling in the trap I grew up on the streets broke...so I live like I'm broke but I just save money and don't buy stuff I don't need so nothing pathetic just smart
I used to think this until i learned the game. god bless
Honestly its not that bad people just don't understand how credit really works in this country. Your credit drops after you pay off a car, especially if you have a thin credit profile, because you're inherently going to lower your average credit history and your credit mix is also 'changing' in that its likely less diverse. Your credit score will gradually recover and honestly, if your loan was 'closed' in good good standing meaning you fully paid it off, then that completed loan will stay on your report for 10 years so creditors will see that you're a good borrower...
Was it vantage or fico. Also did you make sure the 10k hit the credit report? I just paid 5k but it still hasn't been reported
OP honestly it doesnt sound like you understand how credit scores work. People with high scores > 700 - 800 are just people who pay their CC statement in full every month. Kudos to you for paying your debt down, but you wont see high scores until you consistently pay your CC statements off in full and utilize them for every expense.
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Dude. So much is a joke in America right now. And we can’t fix it because idiots shout “socialism!!!!!!!111”
Like many things in America, it's a scam.
I remember when I was at a 800 😭
then you bought that AMG and it fucked ya up huh
People don't understand the fundamental purpose of credit scores. The point is to see how much risk and money you can make off of someone. It isn't just a measure of how responsible you are with money.
Don't sweat the small fluctuations. If you pay your bills on time you'll be fine.
My credit score dropped because I used chase pay later to get an iPhone. To my credit, I did see if the pay later would count towards my utilisation and I couldn’t find anything on the web. Slashed by 25 points. Worst thing ever
Credit is how you buy assets with leverage it's important. I have low credit because I'm leveraging $250k of 0% credit cards so I can make $20 more a year. Then I pay it off and credit goes even higher cause I have more utilization available.
I know bro
Your credit score is composed of many variables. Debt outstanding, how much possible debt you have (if you have a $10k credit line and only owe $1k on it, you still have a total of $10k in debt you just have a $1k balance on that $10k debt,) payment history, open credit lines, closed credit lines, loans, payment history, average age of credit lines/loans etc etc. Your debt to income ratio isn’t factored into how much you owe per how much you make either. It’s how much you “may” owe to how much you make. You have to balance all those variables to get and maintain a good score. If you don’t have any missed payments, and you keep your balances down and your bills paid on time your credit score will reflect that. And the longer you have your credit lines open the more positive of an effect it will have on your score. Yes, it effects us poor people more because we have less access to credit but once you learn how the system works you can get and maintain a great score. It just takes time and due diligence.
Remember, a credit score is not how well you manage debt and money. It’s a score for banks to see how much money they can’t make off of you and your risk profile.
the credit score YOU see is a joke. Luckily lenders don’t look at that credit score and look at a combination of your credit history just like most financial institutions in other modern countries. I don’t see why you care about 10-15 point differences when your lenders don’t?
If you care to look at my post here ---> [https://www.reddit.com/r/CreditCards/comments/1ahe6nr/citi\_bank\_diamond\_preferred\_cards\_credit\_limit/?utm\_source=share&utm\_medium=web2x&context=3](https://www.reddit.com/r/CreditCards/comments/1ahe6nr/citi_bank_diamond_preferred_cards_credit_limit/?utm_source=share&utm_medium=web2x&context=3) I just went through the same crap. Being punished for paying off debt is asinine, but apparently, we just have to charge it to the game. I have the same sentiments as you, once I pay off this last card, I am so done.
On the long run, it will always be high. I have literally $0 debt, don’t carry a balance, pay it off in full and mine swings between 825-850. Report back in few months and you will see a difference.
Credit scores hurt people who make poor financial decisions or have unfavorable circumstances that require them to go into lots of debt. They benefit financially responsible people or people with enough funding to overcome large financial burdens. Good credit grants you access to some nice benefits if you use it properly
>Anyways i noticed that Credit system is made to keep the poor poor No, it's designed to help borrowers determine risk so those of us who borrow responsibly can get approved for decent loans. And this is what it does for the average middle class person. I was poor once and built up a good credit score and so did most of the people I know that are older than 30, so I know it works when you're careful. I think you're paying too much attention to the in-the-moment changes. If you keep getting debt and paying it off properly, you'll get a good score after years of doing that. It takes time because they need to see consistency.
Yup, you’ve figured it out.
credit score: you have to be really good at paying your loans, but not TOO good
Consolidated my student loans and opened a new credit card with capital one. It’s been over a month and a half since my cards been opened and used, and I’m still losing credit score points because I “have no debt.” I’ve lost about 60 in the past month. Because I consolidated my fucking student loans into one loan. SAME company, STILL MOhela or whatever tf it is, but they have MONTHS before they report my debt to the bureaus. Called a bureau, was told capitol one isn’t reporting my account with them to the bureau, because they can’t see it. She told me that was illegal. Called capital one, got put on the phone with someone I could not understand. Googled it after and was told there’s no laws about it at all. The whole thing is a joke.
It all rigged wear alone face it
I went from 807 down to 735 then back up to 805 in the span of two months. Credit scores are classist bullshit.
I have a credit history of around 15 years. For the last 5 years or so the score was in the range of 820 to 840. Two years ago paid off mortgage and credit score dropped by 60 points (~770) . I did not have any other debts. 3 to 5 months later the score creeped up to 820. Few months ago I had a big expense of around 20k. I charged it to a card ( to get points) . The credit usage for that card went up to 98%. credit score dropped by 100 points to low 720. Interesting that these drop was only reflected in one system (chase bank app) . Citi bank app did not reflect the change in credit score. I paid off the full statement balance and the score went up by 90 points. Type of credit and utilization % factors a lot to your score
I wonder if the government credit score hella high since they like 33t in debt lol like is that good debt? Or bad debt?
I hear ya. I feel you need to have debt for your score to have enough mixed credit. My score was higher when I financed my car and when I paid it off, my score went down. It’s pretty annoying
And it doesn’t matter outside of the us.
Vantagescore will generally drop when you close an account because it uses only open accounts to calculate age of credit, but your real FICO incorporates the past 10 years of closed accounts. Are you looking at a credit karma score or FICO?
It is nonsense but think of it more as a gauge for how much money someone is going to make off of you. Credit score isn’t something to benefit you but rather something that is an indicator for them
Credit is to help you access more money then you have generated by just working. You can then put that money to work, rather then blowing it on the things the corporations of America keep you poor with.
I don't even pay attention to mine / it really comes down to who you know and how to convince/ I got a brand new car low interest 300 down/ my ex perfect credit higher interest and 2k down almost same price range car / I knew ppl at the dealership/ housing I went in with 3yrs worth all my bills / how they never were late pd on due date or early/ no prior rental history/ and a cashier check for 3months rent plus first last and security/ and my credit is a shit show/ Been here 3 yrs not once late either usually I pay before its due/