7 ms·

You might not care about your credit rating but your credit rating, unfortunately, cares about you. Do you want to rent an apartment in the United States? You

You might not care about your credit rating but your credit rating, unfortunately, cares about you. Do you want to rent an apartment in the United States? You will, in many geographical markets, expect to have credit pulled as a matter of course. This is partly to determine ability to pay and partly to determine whether you are socially established; "I have mountains of money, why would I need credit?" is something which is often said by people who operate meth labs. Do you want to work in a job which requires a background investigation? Expect a credit pull. Do you want certain varieties of insurance policies? Expect this list to get longer as time goes on, because "credit" encodes a lot of things which are stupefyingly useful in predicting outcomes in advance. Like any bit of code which is stupefyingly useful, get_fico_score() is going to find its way in all sorts of places you'd never naively expect to see it. Additionally, if someone comes to the mistaken conclusion that you owe them money, the harassment which likely accompanies that is a nuisance even if the dings to your credit score are not.

brndnmtthws 9y ago
I have rented several apartments over the years (mostly in and around San Francisco) and have never once had my credit history checked by any of the rentees. I have a car which I own completely (no loan) and I pay the absolute minimum amount of insurance required in California, which amounts to about $264/year. I'm not saying credit doesn't matter, but the more you can do to limit your attack surface, the less likely you are to be harmed. The absolute best way to protect yourself is to not need to play along in the credit rat race. I keep a security freeze on my credit reports, and never lose sleep. I can safely publish my SSN without giving one single fuck.
- harryh 9y ago
  I can safely publish my SSN without giving one single fuck. You should do so right here.
  - brndnmtthws 9y ago
    can and should are orthogonal.
    - hvvvggg 9y ago
      idiot
    - kinkrtyavimoodh 9y ago
      So looks like some fucks are being given after all.
  - ams6110 9y ago
    The CEO of the so-called credit monitoring services (can't recall which one) did that. Had his SSN published on billboards and other advertising. Used to be pretty common to have SSN pre-printed on personal checks, also. It wasn't until the rise of online fraud that SSN became such a sensitive piece of information.
    - harryh 9y ago
      Really? That's awesome. Respect to that guy. EDIT: Though it looks like it didn't necessarily turn out so great for him. https://www.wired.com/2010/05/lifelock-identity-theft/ https://www.wired.com/2010/05/lifelock-identity-theft/
altotrees 9y ago
This is spot on. I didn't care about my credit score for a long time...until I did. An autopay error from one bank account to another resulted in a late payment and a 50 point drop. Coincidentally, I also needed to rent an apartment and apply for a small car loan. Both of these things were made much more difficult, even with just a 50 point ding. The score recovered quickly and I learned my lesson. It was somewhat eye opening for me. One thing I do wish: after tons of research and discussion with "experts" it seems pretty difficult for the average American to predict a rise in their credit score once it takes a hit. Sure, paying bills on time and carrying low or no balances help, but at the same time, paying off a loan can either help or hurt you, being added as an authorized user to a partner's card can be beneficial or not even acknowledged. I wish the algorithm for determining this was a bit more transparent, i.e. What are the mechanisms at work behind that credit report? Not some vague "your score may have fallen because of..." Or "doing this might help your credit..." I feel like the lack of transparency makes people fear credit to a degree.
- bga 9y ago
  I suppose the information is hidden to prevent gaming the system. As someone mentioned in another thread, they took out a loan for $1000, sat on it and just paid it off. Credit score goes up with zero risk for just the cost of interest. If the algorithm were exposed, it would be easier to game.
  - yebyen 9y ago
    If the things they were tracking are reliable indicators of "credit-worthiness" then it would not matter if you "game the system" or not. It's like that story about robbing the bank. First, we get jobs at the bank. Then we go in and work the jobs every day... (spoiler: we never actually rob the bank, because we get cushy jobs with benefits, and retirement plans. That's brilliant!) Anyone with a good credit score can decide to burn their credit at any time. Loss prevention can also step in and cancel your cards at any time if they decide that you've gone off the deep end. They probably won't... but they could.
    - 9y ago
tptacek 9y ago
This was a really excellent post, the best I've seen you write up this material, and among your top 5 posts ever. Having said that, I'm tentatively going to disagree. I made a conscious, somewhat coerced choice in my early 20s never to rely on revolving credit. A combination of random course-of-business (of course resolved) delinquencies and no history of revolving credit resulted in my having relatively poor credit. Compounding this, my disinvestment from my own credit score has led to a new dispute resolution strategy for e.g. medical billing mistakes, which is "ignore mistakes and disputes forever" --- you can imagine the resulting impact on my credit score. The net effect on my life has been minimal. It was comically difficult for me to obtain an actual bona fide credit card (which I wanted in order to broaden my choice of car rental agencies --- a problem that has become less important over time as more and more rental agencies accept debit cards). A few weeks after I got the first wire transfer from the sale of Matasano, calling Chase with a checking account balance that could fairly be called "moronic", I had to argue for about 30 minutes for them to issue me a credit card with an extremely minimal monthly balance. That's about the extent of my problems. Every landlord I've rented from has pulled my credit. My credit has always been bad. But my landlord references were spotless, and that's what landlords seemed to care about. It's more than likely that if I was in a different career, and particularly if that career was in a lower-paying sector where workers have less leverage, my credit score would be a real concern in finding a job. But in this industry, my general response to being declined for a job as an adverse decision relating to my credit score would be to do to the reputation of the hiring firm on Twitter approximately what the lawyers at the Bank of Bigness believe their regulators will do over an FCRA violation. I would almost certainly have a hard time getting a loan for a car. But then, see "revolving credit". Don't get a loan for a car. I had one once in my 20s and remember it being a pretty miserable experience. Until very recently, every other car I'd driven since was (a) worse than that car and (b) on balance a more pleasant experience for not coming with a Significant Monthly Bill. Obviously, in this industry, you will eventually reach a point in your career and your personal financial maturity where "obtaining what you believe to be a car commensurate with your status" will stop being an interesting problem. Which, I think, leaves us with home ownership. I don't have a good answer here. I bought my house in 2005, weeks after starting Matasano, a company which for all the intents and purposes of my mortgage lender did not exist. Suffice it to say I was not able to push that lender around with the contents of my bank account, which were in 2005 also "moronic", but in the other direction. I probably got a worse rate. And it was 2005, so it's possible that my only effective qualification for buying a house was "50.0001% likelihood of currently having a pulse". My tl;dr here though is, at least in my case: if you don't use credit cards ever, your credit score doesn't much matter, and as it turns out credit cards don't much matter either.
brownbat 9y ago
> "I have mountains of money, why would I need credit?" is something which is often said by people who operate meth labs. Eh, this can get overstated on all those guides to hack your score. My wife and I are both, to put it mildly, debt averse. When it came time to buy a house the lenders cared far more about debt to income ratio than scores, which we never built up through artificial debt, but turned out fine anyway. Lenders deal with enough people that they quickly realized we were the sort of weirdos who would pay early and competed for our business. I suppose they could have wondered if we would be so confused by how debt works that we'd just skip random payments because we are bad at monthly responsibilities. Somehow they ruled that out by talking to us and looking at information about our lives. Makes sense, that's basically their job. Otherwise they're leaving money on the table. So sure, definitely watch for errors. Don't take something on then default. But otherwise a light history is not going to sink you, at least not on its own.
SilasX 9y ago
Yeah, lack of a credit history hurt me when applying for apartment rentals. What's worse, back then the annualcreditreport.com assured me that my FICO was ~720 even though lenders and apartments would treat me as toxic purely on the basis of lacking a history! (Not a problem since I built up history using a credit card but pretty kafkaesque.)

brndnmtthws 9y ago

I have rented several apartments over the years (mostly in and around San Francisco) and have never once had my credit history checked by any of the rentees. I have a car which I own completely (no loan) and I pay the absolute minimum amount of insurance required in California, which amounts to about $264/year. I'm not saying credit doesn't matter, but the more you can do to limit your attack surface, the less likely you are to be harmed. The absolute best way to protect yourself is to not need to play along in the credit rat race. I keep a security freeze on my credit reports, and never lose sleep. I can safely publish my SSN without giving one single fuck.

harryh 9y ago
I can safely publish my SSN without giving one single fuck. You should do so right here.
- brndnmtthws 9y ago
  can and should are orthogonal.
  - hvvvggg 9y ago
    idiot
  - kinkrtyavimoodh 9y ago
    So looks like some fucks are being given after all.
- ams6110 9y ago
  The CEO of the so-called credit monitoring services (can't recall which one) did that. Had his SSN published on billboards and other advertising. Used to be pretty common to have SSN pre-printed on personal checks, also. It wasn't until the rise of online fraud that SSN became such a sensitive piece of information.
  - harryh 9y ago
    Really? That's awesome. Respect to that guy. EDIT: Though it looks like it didn't necessarily turn out so great for him. https://www.wired.com/2010/05/lifelock-identity-theft/ https://www.wired.com/2010/05/lifelock-identity-theft/

altotrees 9y ago

This is spot on. I didn't care about my credit score for a long time...until I did. An autopay error from one bank account to another resulted in a late payment and a 50 point drop. Coincidentally, I also needed to rent an apartment and apply for a small car loan. Both of these things were made much more difficult, even with just a 50 point ding. The score recovered quickly and I learned my lesson. It was somewhat eye opening for me. One thing I do wish: after tons of research and discussion with "experts" it seems pretty difficult for the average American to predict a rise in their credit score once it takes a hit. Sure, paying bills on time and carrying low or no balances help, but at the same time, paying off a loan can either help or hurt you, being added as an authorized user to a partner's card can be beneficial or not even acknowledged. I wish the algorithm for determining this was a bit more transparent, i.e. What are the mechanisms at work behind that credit report? Not some vague "your score may have fallen because of..." Or "doing this might help your credit..." I feel like the lack of transparency makes people fear credit to a degree.

bga 9y ago
I suppose the information is hidden to prevent gaming the system. As someone mentioned in another thread, they took out a loan for $1000, sat on it and just paid it off. Credit score goes up with zero risk for just the cost of interest. If the algorithm were exposed, it would be easier to game.
- yebyen 9y ago
  If the things they were tracking are reliable indicators of "credit-worthiness" then it would not matter if you "game the system" or not. It's like that story about robbing the bank. First, we get jobs at the bank. Then we go in and work the jobs every day... (spoiler: we never actually rob the bank, because we get cushy jobs with benefits, and retirement plans. That's brilliant!) Anyone with a good credit score can decide to burn their credit at any time. Loss prevention can also step in and cancel your cards at any time if they decide that you've gone off the deep end. They probably won't... but they could.
  - 9y ago

tptacek 9y ago

This was a really excellent post, the best I've seen you write up this material, and among your top 5 posts ever. Having said that, I'm tentatively going to disagree. I made a conscious, somewhat coerced choice in my early 20s never to rely on revolving credit. A combination of random course-of-business (of course resolved) delinquencies and no history of revolving credit resulted in my having relatively poor credit. Compounding this, my disinvestment from my own credit score has led to a new dispute resolution strategy for e.g. medical billing mistakes, which is "ignore mistakes and disputes forever" --- you can imagine the resulting impact on my credit score. The net effect on my life has been minimal. It was comically difficult for me to obtain an actual bona fide credit card (which I wanted in order to broaden my choice of car rental agencies --- a problem that has become less important over time as more and more rental agencies accept debit cards). A few weeks after I got the first wire transfer from the sale of Matasano, calling Chase with a checking account balance that could fairly be called "moronic", I had to argue for about 30 minutes for them to issue me a credit card with an extremely minimal monthly balance. That's about the extent of my problems. Every landlord I've rented from has pulled my credit. My credit has always been bad. But my landlord references were spotless, and that's what landlords seemed to care about. It's more than likely that if I was in a different career, and particularly if that career was in a lower-paying sector where workers have less leverage, my credit score would be a real concern in finding a job. But in this industry, my general response to being declined for a job as an adverse decision relating to my credit score would be to do to the reputation of the hiring firm on Twitter approximately what the lawyers at the Bank of Bigness believe their regulators will do over an FCRA violation. I would almost certainly have a hard time getting a loan for a car. But then, see "revolving credit". Don't get a loan for a car. I had one once in my 20s and remember it being a pretty miserable experience. Until very recently, every other car I'd driven since was (a) worse than that car and (b) on balance a more pleasant experience for not coming with a Significant Monthly Bill. Obviously, in this industry, you will eventually reach a point in your career and your personal financial maturity where "obtaining what you believe to be a car commensurate with your status" will stop being an interesting problem. Which, I think, leaves us with home ownership. I don't have a good answer here. I bought my house in 2005, weeks after starting Matasano, a company which for all the intents and purposes of my mortgage lender did not exist. Suffice it to say I was not able to push that lender around with the contents of my bank account, which were in 2005 also "moronic", but in the other direction. I probably got a worse rate. And it was 2005, so it's possible that my only effective qualification for buying a house was "50.0001% likelihood of currently having a pulse". My tl;dr here though is, at least in my case: if you don't use credit cards ever, your credit score doesn't much matter, and as it turns out credit cards don't much matter either.

brownbat 9y ago

> "I have mountains of money, why would I need credit?" is something which is often said by people who operate meth labs. Eh, this can get overstated on all those guides to hack your score. My wife and I are both, to put it mildly, debt averse. When it came time to buy a house the lenders cared far more about debt to income ratio than scores, which we never built up through artificial debt, but turned out fine anyway. Lenders deal with enough people that they quickly realized we were the sort of weirdos who would pay early and competed for our business. I suppose they could have wondered if we would be so confused by how debt works that we'd just skip random payments because we are bad at monthly responsibilities. Somehow they ruled that out by talking to us and looking at information about our lives. Makes sense, that's basically their job. Otherwise they're leaving money on the table. So sure, definitely watch for errors. Don't take something on then default. But otherwise a light history is not going to sink you, at least not on its own.

SilasX 9y ago

Yeah, lack of a credit history hurt me when applying for apartment rentals. What's worse, back then the annualcreditreport.com assured me that my FICO was ~720 even though lenders and apartments would treat me as toxic purely on the basis of lacking a history! (Not a problem since I built up history using a credit card but pretty kafkaesque.)