Seems like one flaw of the credit market is that to get credit people have to check your credit but you are less able to get credit if people are checking your credit
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I don’t think this is true. You can build credit by paying off your credit card in full every month. If you started carrying a balance, I think it would actually go up because it would make your utilization higher.
Yes, that's right. But you have to continually accrue debt, even though you pay it off. I have to use a credit card. If I have monthly payments just deducted from my bank account, unless they are loan payments, they don't count.
Sure, I suppose it depends on your definition of debt. Technically your monthly balance is debt, but I think it’s more useful to only call it debt if it’s accruing interest.
Either way, point taken on the credit system being silly.
Right? And it doesn't matter if you have decades of zero late or missed payments on loans of all kinds. The minute you pay it all off, down it goes. Our system demands that you be in debt at all times throughout your life.
It all makes sense when you realize your score is just how profitable it is to loan you money. If you just pay it off instead of paying interest, your score should go down, because you're less profitable for lenders. And that's ok, because _their_ profit isn't something _you_ are trying to maximize.
But a low score has a punitive effect on people. And paying it off punishes you even if you've paid all the interest over the full length of the loan--it doesn't just punish you if you pay it off early. No matter how much of a fortune lenders have made off of me, my score goes down if my debt is $0.
You don’t have to have debt per se to have a good credit score. If you use your credit card for gas, for instance, & you pay it off each month, the on-time monthly payments are good for your credit. You don’t need to have debt or carry a balance.
Mostly I just wanted to mention the bit in @shteyngart.bsky.social's Super Sad True Love Story that readers embedded in every lamppost would show everyone's credit score as they walked by. We'll get there.
The worst is you need credit in order to be assessed for being given credit. You can only get credit by having already proved yourself creditworthy by having credit that you have honored. Simple, right?
And the reasons I don’t have a perfect score are always: 1) not enough accounts paid as agreed and 2) too many accounts paid as agreed. At the same time.
Kinda why you look at your FICO score at your bank or credit card company and work to get your ratios correct, and if you need to increase your credit, take out $1K loans and pay them back immediately, costs you a little over $100 but do that a few times and your credit will rock
Whole thing is a scam and bullshit. For some reason, paying off debt is penalized. Holding a balance, even less than a billing cycle, penalized. It’s ridiculous.
Unfortunately your credit score isn’t a direct indicator of your financial health, it’s an indicator of how much interest you can pay on a reliable schedule
827. That was the highest mine ever got to, and you are right, I didn't need it, so I stopped worrying about the little things that might lower my credit score. Still, I pay my bills on time. Always. And I keep my oldest card active. That's the key! (Typos forgiven.)
If you can discipline yourself to charge regularly but minimally on that first credit card you’re offered, and you pay off the little balance every month, after a year or two the offers start flooding in. It’s a game! But you can’t charge too near your limit. Credit score will go up, too.
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Either way, point taken on the credit system being silly.
If you get credit.
Mostly I just wanted to mention the bit in @shteyngart.bsky.social's Super Sad True Love Story that readers embedded in every lamppost would show everyone's credit score as they walked by. We'll get there.
But the credit inquiries? That makes ZERO sense.
It's very telling of how they plan to keep you in poverty instead of ever finding a way out.