5 ms·

> Even more notably, the benefits of improving your credit score early are immense. [citation needed] EDIT: I also particularly like the part where "financial

> Even more notably, the benefits of improving your credit score early are immense. [citation needed] EDIT: I also particularly like the part where "financial literacy" is used as a surrogate for "people who want to overleverage themselves to make the bankers money".

sndean 10y ago
> [citation needed] http://www.experian.com/blogs/ask-experian/infographic-what-are-the-different-scoring-ranges/ http://www.experian.com/blogs/ask-experian/infographic-what-... At least according to them, 15% of your credit score is based on the length of your credit history. And your credit score can impact lots of things. I'd disagree with the word "immense," but it does seem somewhat useful to have a score >800 or thereabouts, and having a credit history longer than a few years is needed to have a score like that.
the_mitsuhiko 10y ago
Depends on the country but in the US credit rating is king. I knownpeople who moved to US who are taking a loan for a car and immediately pay it off just to build a score.
- ch4s3 10y ago
  That's kind of a poor strategy. Open accounts, utilization, and average age of credit are the largest factors. Paying off a loan immediately may actually lower your score.
  - troebr 10y ago
    According to CreditKarma, getting "excellent" on the number of open accounts factor means having 21 or more open accounts. Assuming you have 4 cc, 2 student loans, 1 car loan and 1 mortgage you would still be in the "poor" category. I don't think I'll ever get out of the "very poor" category (0-5).
    - runevault 10y ago
      That's... insane to me. Right now I have 2 open accounts. 1 CC (that I pay off every month so no interest) and my Mortgage. I don't even have a car payment right now. Yet my credit rating is top like... 4%? Mind I've had that credit card for almost 2 decades at this point.
    - pilom 10y ago
      Shop around for credit cards more often. You can find deals where they will pay you $400 just for using their card for 3 months. A pair of southwest cards timed to get a companion pass can be worth close to $4000 if you do it right.
ethanbond 10y ago
Benefits of improving credit score: access to capital when shit hits the fan e.g. medical emergency? Is this disputable?
forrestthewoods 10y ago
Good credit helps you: rent an apartment, buy a car, lower your insurance rates, and buy a condo/house. Additionally, buying things with a credit card gives additional benefits such as extended warranties and protection against fraud.
- angersock 10y ago
  At least two of those aren't "buy"...they are "leverage self further". I know this sounds a bit nutty, but many of the arguments for credit seem to go: "Why do I want to take on debt?" "To build your credit score!" "And what does that do for me?" "It gives you the opportunity to take on larger debts!" "And why would I want to do that?" "...why do you hate America?" Not even joking.
  - echlebek 10y ago
    I think that the credit is built by taking on debt and then paying it down. It shows that you can produce money reliably when required to do so, and that given some rope, you won't hang yourself with it. Extrapolate that a bit and you're paying a mortgage using the same skills.
rdiddly 10y ago
I think you're onto something though - look at this article with a skeptical eye and doesn't it begin to seem an awful lot like http://paulgraham.com/submarine.html http://paulgraham.com/submarine.html ? It's that same old shitty mix of advertising and content, with the people purchasing PR services in this case being someone in the retail credit sector. Plausible enough to wonder about it, anyway. The suit is back and Millenials just aren't big enough awesome yay special winners to use our wonderful debt product. Yeah bullshit. Stick to your guns, Millenials, and never (or at least rarely) borrow to spend.

sndean 10y ago

> [citation needed] http://www.experian.com/blogs/ask-experian/infographic-what-are-the-different-scoring-ranges/ http://www.experian.com/blogs/ask-experian/infographic-what-... At least according to them, 15% of your credit score is based on the length of your credit history. And your credit score can impact lots of things. I'd disagree with the word "immense," but it does seem somewhat useful to have a score >800 or thereabouts, and having a credit history longer than a few years is needed to have a score like that.

the_mitsuhiko 10y ago

Depends on the country but in the US credit rating is king. I knownpeople who moved to US who are taking a loan for a car and immediately pay it off just to build a score.

ch4s3 10y ago
That's kind of a poor strategy. Open accounts, utilization, and average age of credit are the largest factors. Paying off a loan immediately may actually lower your score.
- troebr 10y ago
  According to CreditKarma, getting "excellent" on the number of open accounts factor means having 21 or more open accounts. Assuming you have 4 cc, 2 student loans, 1 car loan and 1 mortgage you would still be in the "poor" category. I don't think I'll ever get out of the "very poor" category (0-5).
  - runevault 10y ago
    That's... insane to me. Right now I have 2 open accounts. 1 CC (that I pay off every month so no interest) and my Mortgage. I don't even have a car payment right now. Yet my credit rating is top like... 4%? Mind I've had that credit card for almost 2 decades at this point.
  - pilom 10y ago
    Shop around for credit cards more often. You can find deals where they will pay you $400 just for using their card for 3 months. A pair of southwest cards timed to get a companion pass can be worth close to $4000 if you do it right.

ethanbond 10y ago

Benefits of improving credit score: access to capital when shit hits the fan e.g. medical emergency? Is this disputable?

forrestthewoods 10y ago

Good credit helps you: rent an apartment, buy a car, lower your insurance rates, and buy a condo/house. Additionally, buying things with a credit card gives additional benefits such as extended warranties and protection against fraud.

angersock 10y ago
At least two of those aren't "buy"...they are "leverage self further". I know this sounds a bit nutty, but many of the arguments for credit seem to go: "Why do I want to take on debt?" "To build your credit score!" "And what does that do for me?" "It gives you the opportunity to take on larger debts!" "And why would I want to do that?" "...why do you hate America?" Not even joking.
- echlebek 10y ago
  I think that the credit is built by taking on debt and then paying it down. It shows that you can produce money reliably when required to do so, and that given some rope, you won't hang yourself with it. Extrapolate that a bit and you're paying a mortgage using the same skills.

rdiddly 10y ago

I think you're onto something though - look at this article with a skeptical eye and doesn't it begin to seem an awful lot like http://paulgraham.com/submarine.html http://paulgraham.com/submarine.html ? It's that same old shitty mix of advertising and content, with the people purchasing PR services in this case being someone in the retail credit sector. Plausible enough to wonder about it, anyway. The suit is back and Millenials just aren't big enough awesome yay special winners to use our wonderful debt product. Yeah bullshit. Stick to your guns, Millenials, and never (or at least rarely) borrow to spend.